Appraisal Institute Seeks to Expand Diversity, Combat Alleged Bias in Valuation
September 10, 2020 08:00 AM
CHICAGO (Sept. 10, 2020) – As our nation continues reflecting on important matters of racial justice, the nation’s largest professional association of real estate appraisers today reiterated its efforts to expand opportunities for aspiring appraisers and help combat alleged bias in valuation.
The Appraisal Institute has several existing programs concentrating on this issue, including the Appraiser Diversity Pipeline Initiative with Fannie Mae and the National Urban League, along with the Minorities and Women Course Scholarship Program from the Appraisal Institute Education and Relief Foundation.
“These initiatives are dedicated to promoting greater diversity within the real estate appraisal profession through direct outreach to interested individuals and financial assistance covering entry-level education and other support mechanisms,” said Appraisal Institute President Jefferson L. Sherman, MAI, AI-GRS.
“The Appraisal Institute always has valued its role as an organization that embraces diversity,” Sherman added. He noted that the organization’s member-comprised Diversity Panel is discussing new steps that the Appraisal Institute can take toward an even stronger commitment to diversity and inclusion. This group is tasked with several initiatives, and one being considered pertains to further development of continuing education.
Additionally, the Appraisal Institute has a newly formed Women’s Initiative Committee, whose discussions have centered on scholarship and mentorship opportunities in the profession. Also, recent conversations with leadership at The Appraisal Foundation have presented an opportunity for the Appraisal Institute to partner with TAF on getting more historically black colleges and universities involved in the undergraduate and graduate review program that the Appraiser Qualifications Board has established. Regarding alleged bias in valuation, “professional appraisers have a huge stake in ensuring that bias does not enter into appraisals, because at the end of the day, we sell credibility. Frankly, bias is our adversary regardless of what form it takes,” Sherman said.
Sherman noted that, “appraisers are not market participants, and they do not ‘create’ value. Value is not a ‘fact’ to be found, but an opinion that should be credible and well-supported. These opinions should not use subjective terminology, unsupported assumptions, or interjections of opinion, or draw unsupported conclusions from subjective observations, among other things. These requirements are ingrained in a bevy of existing anti-bias and independence requirements that appraisers and lenders have to follow and observe,” Sherman said.
Sherman further noted that, “appraisers adhere to a strict set of rules at the federal and state levels, with racial or any discrimination strictly prohibited and subject to penalty. The appraiser’s role is unbiased and serves to protect consumers and financial institutions.” He added, “credible, reliable opinions of value are fundamental to economic security for lenders, buyers, sellers and property owners, together with other stakeholders in property tax, income tax and eminent domain. Our work must remain impartial, objective and independent.”
In its Aug. 20 letter to The Appraisal Foundation, the Appraisal Institute cited its belief that existing requirements can be reinforced and enhanced starting with the AQB “Real Property Appraiser Qualification Criteria.” The letter said that while the current “Criteria” clearly allows educational programming on bias and discrimination under allowances for “Ethics,” the Appraisal Institute believes the creditable topics list could be expanded with additional examples directly relating to bias and discrimination, as this would help stimulate additional education ideas amongst appraisal education developers and providers on this important topic.
Further, the Appraisal Institute is exploring additional actions to reaffirm existing requirements including further research, guidance and education on matters relating to real estate market trends, bias and independence.
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The Appraisal Institute is a global professional association of real estate appraisers, with over 17,000 professionals in almost 50 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.