Earlier in 2023, firsttuesday asked readers whether they are or their clients had ever experienced appraisal discrimination.

Most said no — but a sizeable 10% said yes, often more than once.

Nationally, 12.5% of homes in Black neighborhoods and 9.4% of homes in Latino neighborhoods receive appraised values lower than the purchase price — compared to just 7.4% in white neighborhoods, according to a Freddie Mac study.

But is a broad national study applicable to appraisals conducted in California? The truth is, we don’t know — there’s simply not enough separate information available to prove whether or not appraisals in California are biased on a systemic scale. And without this information, little can be done by the state to rectify discriminatory appraisal practices.

To attempt to fill the information gap, California has enacted a new law authorizing the BREA to collect demographic data from appraisers. [Calif. Business and Professions Code §11347]

The Bureau of Real Estate Appraisers (BREA), as well as the California Architects Board, are now authorized to request that a licensee identify their race, ethnicity, sexual orientation, gender, or gender identity when an initial license is issued or when already licensed at the time of license renewal.

The BREA may not require a licensee to provide the information as a condition of licensure or license renewal.

The BREA may publish the aggregate demographic data they collect on the BREA website. Further, beginning January 1, 2025, the BREA will submit compiled demographic data they collect to the California Department of Consumer Affairs, which will post the information on the department’s website.

The BREA is to maintain confidentiality of all information collected.

Related article:

Below value appraisals are uncommon — but they are more likely in minority neighborhoods


Implicit bias: tough to overcome, but CA keeps working on it

The passage of appraiser demographic identity collection follows a strong trend of California lawmakers attempting to reel in discrimination in the real estate market, with emphasis on insidious implicit bias. Blatant bias was tamped down decades ago, but is making somewhat of a ground swell return in some parts of the country, and California is being subjected to a share of that return.

In 2021, the BREA’s consumer complaint form was updated to include checkboxes for their demographic information and whether the consumer believes their parcel was appraised below market value. [Calif. Bus & Prof C §11310.3(b)]

The BREA will study this demographic information and provide a report of their findings to the state legislature before July 1, 2024. [Bus & Prof §11310.3(e)]

The BREA also implemented appraiser continuing education (CE) requirements for:

  • one hour of instruction in cultural competency required every four years; and
  • two hours of elimination of bias training.

A separate law took effect in 2023 requiring Department of Real Estate (DRE) licensees to complete implicit bias training with their regular CE and as part of the Real Estate Practice course required to obtain a license. [Bus & Prof §§10153.2(a); 10170.5(a)]

To submit a formal complaint about suspected discriminatory appraisal practices, visit the BREA’s website and download the complaint form.