Requests Update from HUD Secretary on Efforts to Address Appraisal Bias, Discriminatory Tenant Screening Practices

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WASHINGTON — Today, in a House Financial Services Committee hearing, Congresswoman Ayanna Pressley (MA-07) highlighted the growing housing crisis and how appraisal bias and discriminatory tenant screening practices exacerbate the racial wealth and homeownership gaps, especially for Black communities. In her line of questioning, Rep. Pressley asked Secretary Fudge what efforts the Department of Housing and Urban Development (HUD) is taking to address issues of appraisal bias and housing discrimination.

Earlier this year, Rep. Pressley, along with Congresswoman Rashida Tlaib (MI-12), introduced the Housing FIRST Act, legislation to help people who are formerly incarcerated and those with criminal histories access safe and stable housing.

Footage of Rep. Pressley’s exchange with HUD Secretary Marcia Fudge can be found here and a transcript is below.

Transcript: Rep. Ayanna Pressley Highlights Harmful Impact of Housing Discrimination on Black Homeownership, Racial Wealth Gap

U.S. House of Representatives
January 11, 2023

REP. PRESSLEY: Thank you, Mr. Chair. Good afternoon, Madam Secretary.

I’m so grateful that you’re here. Grateful for what you do, you and your team, each and every day. But I’m grateful you’re here today to set the record straight, to ensure that there is no erasure of the contributions of HUD during these consequential times, and no mischaracterization or undermining of your commitments.

I thank you and your team in particular for your accessibility, your responsiveness, your partnership, especially on the impact of the HOTMA regulations on our constituents, and again, I’m just grateful you’re at the helm.

SEC. FUDGE: Thank you.

REP. PRESSLEY: I represent the Massachusetts 7^th Congressional district. This is a district that is incredibly unequal, where in a three-mile radius from Cambridge to Roxbury – the Blackest part of my district – the life expectancy drops by 30 years, median household income by $50,000.

There was a Color of Wealth report done by the Federal Reserve of Boston that counted Black wealth at $8, compared to the wealth of white households at $247,500.

I believe that has everything – that gap – to do with housing. Everything starts at home. It is a critical determinant of health, social and economic mobility, and certainly, given the disparities, and the crisis has in many ways contributed to the racial wealth gap.

And so I just want to pick up there because we’ve enumerated the many ways that this housing crisis is showing up and growing. And it certainly has a disparate impact on Black families. Black homeownership rates are at 41.7%. That’s 30 points lower than white households.

And so I wonder, Secretary Fudge, in 2024, even when Black people do own their homes, we are subjected to discriminatory home appraisals, where our homes are valued less than they would be if owned by a white family.  

Can you update us on the work you have been leading at HUD to protect homeowners from discriminatory home appraisals, and anything you can share on diversifying the profession, which is 90% white and two-thirds male? 

SEC. FUDGE: Thank you for the question, Congresswoman. We have a project that helps talk about valuation equity. We know that there is a great deal of redlining still going on in this country. We know that models are based upon redlining. And so when our appraisals go out, they already go out with a bias because the program is designed with a bias.

So what we have been doing is negotiating with and meeting with the appraisal subcommittee, and those to talk about how we bring more fairness into the process. And I would say on their behalf, they have been listening. They are trying to work with us, because you cannot say to me that there is no bias in a field that is 90-95% all white males.

When they go into our communities, they have no idea what our communities are worth. And so what we do is we devalue properties in communities that are Black and brown. And you can just look at it. I mean, it’s a fact. But we increase value and communities that are non-people of color. So we are making progress.

We are also, in our Fair Housing Office, we are starting to bring legal action against those that we find to be discriminatory. And we are in the process of suing quite a few people.

REP. PRESSLEY: Thank you, Madam Secretary. And I want to get one more issue on the record here. And that is addressing the prison-to-homelessness pipeline.

In my district, we’ve had folks – returning citizens – 30% of that population released to shelter because of the discrimination. In a survey of over 700 formerly incarcerated people, eight out of 10 respondents said they were ineligible for or denied housing because of their criminal record.

Now, this is fueled in part by tenant screening reports, which often include inaccurate information that lead to housing denial.

Secretary Fudge, what steps has HUD taken to remove barriers to housing for people with criminal records? And I should add that I do have a bill to address this. I call it the Housing FIRST Act. But I would love to hear what HUD is doing.

SEC. FUDGE: We have a rule that is saying to everyone that it is housing discrimination to only use a person’s criminal background as a decision point as to whether they should stay in public housing. There is no rule that prevents them. So we’re working to make sure that we change it. I’m very, very happy and proud of the work that we’re doing in that regard.

REP. PRESSLEY: Thank you. It’s really critical, also to breaking the cycles of recidivism so it’s a matter of fairness but also that prison-to-homelessness pipeline does contribute to recidivism.

Thank you, Madam Secretary. Thank you, Mr. Chair. 

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