As graduation season approaches, one of AI’s goals is to attract new individuals into the valuation profession and Appraisal Institute. Learn more about how we are accomplishing that initiative, and other timely updates, from the past month.
AI Awards Scholarships to Aspiring Appraisers
I am excited that the Appraisal Institute is continuing its collaboration with Fannie Mae and the National Urban League and that we’ve awarded another round of scholarships through the Appraiser Diversity Initiative. The scholarships are supported by the Appraisal Institute Education and Relief Foundation, and the recipients are:
- Wade Anderson-Harvey, Louisiana;
- Bendrick Cade-Lawrenceville, Georgia;
- Helen De La Cruz Flagg-San Jose, California;
- Byron Dinning-Evergreen Park, Illinois;
- Angie Griffin-Windermere, Florida;
- Durrell Eskridge-Mount Holly, North Carolina;
- Natasha R. Johnson-Shreveport, Louisiana;
- Thuy Pham-Gretna, Louisiana;
- Kris Shaver-Richmond, California; and
- Sheree Venson Nelson-Harvey, Louisiana.
The Appraisal Institute Education and Relief Foundation has committed $150,000 over three years to the Appraiser Diversity Initiative. The scholarships cover the three entry level courses required of appraisers and winners are matched with advisers who help them through the education and credentialing process.
Find more information about the Appraiser Diversity Initiative here.
AI Continues Diversity, Equity and Inclusion Efforts
The last year has put a greater spotlight on issues of diversity, equity and inclusion. I know you all have either heard about or read the media coverage that has come out, and we understand that these stories raise questions about fairness and equity in real estate and appraisal today.
Associations and companies across America have been taking a hard look at what they’re doing, and many have determined they need to do more. There also is increasing and ongoing scrutiny and inquiry by media, policymakers, consumer advocates and others about what organizations are doing and if it is enough. This includes the Appraisal Institute, which has experienced greater scrutiny over this time as well. Certain areas, such as real estate, are especially under a microscope because of their historic and far-reaching impact.
It is widely accepted by scholars, policy leaders and others that America’s legacy of redlining, risky subprime loans in mortgage lending and segregation – to name a few challenges – has led to inequities in home ownership for people of color. This is one reason why today, 44% of Black households own a home compared with 75% for white households.
Meanwhile, studies and stories continue to come out that raise questions about fairness and equity in real estate and appraisal today. In the news, stories are being reported where people of color feel like their race played a role in how their property was appraised. Realtors, bankers, appraisers, congressional committees and government agencies, to name a few, are all being called on to take a harder look and consider solutions.
In short, the future of the profession is at stake. Everything is on the table right now as legislators and regulators at the state and federal level look at why there is such a gap and solutions for more people of color to own a home. We want to be at that table and part of those discussions. We have an opportunity to educate people about what we do as appraisers and demonstrate an open mind to how we might look at what we do differently. Appraisers also understand the greater real estate ecosystem and can help people look at things from a wider perspective.
Nationally, and across all professions, younger professionals are watching how organizations are reacting. No generations, specifically Generations Y and Z, have cared more about diversity, equity and inclusion and make choices about what they do and what they consume based on it. In appraisal, they will very much be watching how longtime appraisers react and how we act as an organization. Consumers and consumer advocates are watching to see how different professions and organizations step up and will continue to hold us accountable. This is a defining moment in history that we need to be part of or get left behind. Importantly, greater DE&I efforts are something we can be proud of as a profession.
As an organization, we believe that even one story of someone who feels they were treated differently because of their race is upsetting, because that goes against everything we as appraisers stand for. As you know well and we tell others, appraisers take a lot of pride in being an objective source of real estate value information. We look at the numbers and facts and mirror what the market tells us.
One question that policymakers and scholars are asking is whether there are alternative approaches to valuing property that could maintain objectivity while not inadvertently introducing new problems for the very consumers for whom we’re trying to ensure fairness. Care should be taken in proposing changes to appraisal methodology, as approaches to value are grounded in economic principles that have been tested through time and economic crises. Further, approaches to value such as the sales comparison (or market approach) are observed across the world – not just in the United States. Establishing rules of thumb or arbitrary adjustment processes likely would have profound unintended consequences, including creating housing “bubbles.”
We also know unconscious bias is human and exists in various forms, and no profession is immune from that. We may not know the details of or exactly what happened in any one given situation being pointed out where someone feels they were treated unfairly. We also do not know all the circumstances in how appraisals may have been ordered by lenders or appraisal management companies, how appeals may have been handled, or what instructions were given to subsequent appraisers. Regardless of that, as an organization we must educate ourselves about potential bias, just as professions across America are doing.
At the same time, of course, appraisal is one piece of a larger ecosystem to look at when it comes to housing issues. We don’t think there is any one solution to a problem rooted in hundreds of years of history. Appraisal is one piece of a larger set of issues to look at when it comes to housing issues. Appraisal groups are working alongside consumer groups, real estate brokers and agents, banks, government agencies, think tanks and others to explore where housing inequities may stem from and what combination of solutions should be considered.
Diversity, equity and inclusion efforts are a priority for the Appraisal Institute. There are a number of things that we are doing to be a part of the solution, including:
- We are participating in the Brookings Institution challenge to address systemic racism in the housing market, sitting side by side with those in the greater real estate world and people who are very much outside of the profession.
- We are working with members of Congress like House Financial Services Committee Chairwoman Maxine Waters on how to bolster fair housing programs and develop solutions to mortgage credit problems.
- We are reinforcing ethics, education and training so appraisers stay up to date with information and be better equipped to do their best work.
- We are developing a 5-hour seminar on valuation bias that will delve into explicit bias (discrimination), implicit (or unconscious) bias, and systemic biases (historical redlining, restrictive covenants and other biases in the market) confronting appraisers. This seminar is envisioned as satisfying expected continuing education requirements for appraisers.
- We are updating our Code of Professional Ethics with enhanced ethics requirements relating to protected classes and new requirements relating to personal characteristics in appraisal.
- We have adopted a new Guide Note that illustrates acceptable and unacceptable use of personal characteristics in valuation practice.
- We are hosting additional seminars with expert speakers and researchers such as The Appraisal Foundation and Brookings Institution.
- We are working with The Appraisal Foundation to enhance standards and qualification requirements related to unconscious bias.
- We are continuously educating ourselves and looking at our processes and approaches.
- We have a project team that is going to review research and reports about diversity, equity and inclusion in appraisal as they come out. Whether or not we agree with someone’s research methodology, we want to better understand what we might learn or glean from other people’s work.
- We are also recruiting more appraisers of color and women. Right now, although we work in every community in America, we could do a better job as an organization to reflect the diverse faces of the communities in which we serve.
- We also know that representation is a leading force for diversity, equity and inclusion in every profession. As I mentioned earlier, our efforts include participating in the Appraiser Diversity Initiative with Fannie Mae and National Urban League; and the Minorities and Women Course Scholarship Program from the AI Education and Relief Foundation.
We recognize that recruiting for greater diversity will make us stronger and more representative of the communities we work in and contribute to greater cultural awareness. This is not an AI problem; the profession has a lot of work to do to achieve greater racial, ethnic and cultural diversity among appraisers in general. We want to continue to ensure consumers know their rights.
We believe that overwhelmingly, there are more good people in this world than bad, including in the valuation profession – and that today, more than ever, people are committed to listening, learning and changing. That said, it is widely accepted that unconscious bias is real and no profession is immune from that. If anyone believes they have experienced discrimination or bias in an appraisal, we encourage them to report it to the appropriate fair housing agency or state appraiser regulatory agency.
Know that questions being raised about appraisal is much more than about any individual appraiser, or our profession. This is a topic that can be difficult or uncomfortable to grapple with; even so, it is still important to pursue these steps. This is about a group of people disproportionately being left behind in homeownership and wealth generation. The more people who can experience economic opportunity, the better off they will be and the better off all our communities will be. Care must be taken to avoid unintended consequences from policy changes, such placing consumers in “upside down” mortgages or fueling housing bubbles.
Participate in the AI unconscious bias training when it’s offered. You’ll hear more from us when it’s ready. In the meantime, know that all of us carry unconscious bias in many ways and in many forms, even if we don’t intend to. What’s important is to recognize bias and know how to interrupt it when it happens.
Please keep asking questions, being curious and participating. If you don’t understand why AI is doing something it’s doing, please ask. If you have ideas for how we can be doing things better or different, let us know. If you see an opportunity to be part of a discussion about how to advance diversity, equity and inclusion in appraisal, housing or otherwise, take it.
AI Board of Directors Adopts 45-Day Notice Items During May Meeting
The Appraisal Institute Board of Directors voted to adopt two 45-Day Notice items during its May 6 meeting In Orlando, Florida. The 45-Day Notice items address proposed amendments to Regulations Nos. 1, 2 and 3 regarding the college degree requirement, and proposed amendments to the Code of Professional Ethics and Explanatory Comments to the Code of Professional Ethics.
The 45-Day Notice was distributed to Designated Members, Candidates, Practicing Affiliates and Affiliates on March 22.
Learn about other actions the Board took at its meeting.
National Nominating Committee Nominates Steven Stiloski as 2022 AI Vice President
I’m pleased to share that Steven G. Stiloski, MAI, of Hartford, Wisconsin, was nominated for 2022 Appraisal Institute vice president by the AI National Nominating Committee at its May 5 meeting in Orlando, Florida.
National Nominating Committee Chair Jefferson L. Sherman, MAI, AI-GRS, submitted the committee’s nomination to the AI Board of Directors at its May 6 meeting. Board members may file petitions for additional nominees in accordance with the Appraisal Institute Bylaws. The AI Board of Directors is expected to elect the 2022 vice president at its Aug. 12-13 meeting.
The 2022 vice president will serve as the Appraisal Institute’s 2023 president-elect, 2024 president and 2025 immediate past president, in addition to chairing the Finance Committee in 2022 and the National Nominating Committee in 2025.
Learn more about Steven G. Stiloski, MAI.
Other News Around the Appraisal Institute
And here’s some other important news from the Appraisal Institute:
- Registration is open for the 2021 Annual Conference! I encourage you to register for this amazing event. This year’s conference will be held Aug. 9 -10, at the JW Marriott Orlando Grande Lakes. We are looking forward to seeing everyone this summer!
- AI posted two new videos to its YouTube channel during the past month. One includes information about AI’s 2021 Annual Conference, and the other gives information about AI’s awards.
- The Appraisal Institute continues to expand its social media activities. Be sure to follow AI on Facebook, Twitter, Linked In, YouTube, and its blog, Opinions of Value.