A Black Appraisal Tax: Million Dollar Mansions In Mostly Black Prince George’s County Aren’t Going Up

A Black Appraisal Tax: Million Dollar Mansions In Mostly Black Prince George’s County Aren’t Going Up

Prince George’s County

Photo Credit:KatarzynaBialasiewicz

Bias in home appraisals has been devaluing Black-owned homes for decades, and the Black appraisal tax is levied in the country’s wealthiest Black communities. Incorrect appraisals even affect Black homeowners in affluent, Black-dominated Prince George’s County, Maryland.

While home values soared during the pandemic, Black homeowners missed out on the boom as their communities are routinely undervalued – even when they are among the wealthiest.

Bordering Eastern Washington, D.C., Prince George’s County is the largest and the most affluent majority-Black county in the U.S. It’s 63 percent Black and the median household income is nearly $85,000 annually — almost double the U.S. median income of $44,225. In February 2022, home prices were up 18.9 percent compared to last year, selling for a median price of $390,000.

But Black homes in predominantly Black neighborhoods, whether affluent communities like Prince George’s or lower-income areas, get lower valuations than they should.

This can impact the upward mobility of a community as homesellers in Black neighborhoods can’t get the actual value of their homes, and buyers want homes that are correctly valued. Also, for homeowners to get financing, the house needs to be close to the appraised value.

The Brookings Institution found that Black neighborhoods were associated with much lower property values overall. Homes in Black neighborhoods are valued at 23 percent less on average than those in comparable white neighborhoods — despite having similar neighborhood and property characteristics and amenities.

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A 2021 study from Freddie Mac found that 12.5 percent of appraisals for home purchases in Black neighborhoods came in below the contract price, compared with 7.4 percent of appraisals in white neighborhoods.

Kym and Steve Taylor was shocked when their six-bedroom home in Prince George’s County was appraised for half a million dollars less than the $1.15 million they were expecting in 2021. Their home has nearly 10,000 square feet, nine bathrooms, a wine cellar, and a custom-designed floating spiral staircase. They bought the for $1.45 million in 2015. The new appraisal was $300,000 less than what they had paid six years earlier.

The Taylors own a home health-care agency and they wanted to use the equity in their home as collateral to buy another company.

What happened to the Taylors happens to countless other Black homeowners.

The devaluation of Black communities adds up to about $156 billion in lost equity, said Andre Perry, a senior fellow at Brookings and author of “Know Your Price: Valuing Black Lives and Property in America’s Black Cities.”

“This is the money that can be used to lift yourself up that proverbial economic ladder,” said Perry, who also lives in Prince George’s County. “That is what’s being extracted from our communities.”

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The Biden administration is promising to make sure Black homeowners get fair appraisals. On March 23, the White House unveiled the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) Action Plan, led by Housing and Urban Development Secretary Marcia L. Fudge and Domestic Policy Council Director Susan Rice.

There has to be interest in an area to boost up home prices. If there are buyers, demand, and multiple bidders, the valuation should go up.

Are Black millionaires looking to move into predominately Black neighborhoods like Prince George’s Country?

Because of the Black appraisal tax, some Black families are faced with the dilemma of moving into predominantly Black tony neighborhoods or buying homes elsewhere.

Public relations executive Jacqulyn Priestly and her banker husband built a home in Prince George’s County after considering other D.C.-area neighborhoods. “At the end of the day, even though we knew we’d gain equity faster if we lived almost anywhere else, we couldn’t put a price tag on the sense of community,” said Priestly, 42.

In 2021, the couple started a grass roots network called Fair and Unbiased Appraisal Advocates to empower other Black homeowners to understand their rights, appeal unfair appraisals, and file complaints with the state.

“There is a cascading effect to low appraisals, creating a stagnation that looms over Black people at every socioeconomic level,” Priestly said. “It can stifle the ability to create generational wealth. You’re saying Black people can only go so far.”

Photo Credit:KatarzynaBialasiewicz https://www.istockphoto.com/portfolio/KatarzynaBialasiewicz?mediatype=photography