African American Carlette Duffy holding back tears.
– It hurts my soul when I realize that I, as I was born to be, lower the value of my apartment.
The wounds from the events of a couple of years ago are still open.
Duffy doesn’t say it directly, but the message is clear. He feels that he has been discriminated against in the housing market based on his skin color. Duffy claims the value of her home was grossly undervalued because she is black.
That’s a tough claim, but not one made out of thin air.
The incident began three years ago in Indianapolis, Indiana. Duffy wanted to buy his dead mother’s apartment near his own home.
– I wanted to give the apartment to my daughter, so that the beginning of her life would be easier.
Without the bank loan, the mother’s house would not be bought. He decided to refinance his house, which is a common way in the US to get extra money for other investments.
In practice, it happens like this: If the value of your own house has increased, you can take out a new loan against it, pay off the old mortgage and use the remaining money however you like.
Duffy was hoping to get the same value for her house as her sister who lives next door, whose home had just been appraised at about $200,000.
In that case, Duffy could have received a $160,000 loan from the bank. With that, he could have paid off the remaining $90,000 from the previous loan.
70,000 would have been left to buy the mother’s house.
The rating was disappointing
According to American practice, Duffy commissioned a professional to estimate the value of the house. Based on the assessment, the bank would decide how big of a loan it would give Duffy.
– I was mildly shocked when I got the estimate and it was $125,000. It wouldn’t make it possible to buy the mother’s house in any way.
Suspecting something was wrong, Duffy ordered a new evaluation from another company. The estimate was even lower.
Depressed, he was about to abandon the purchase completely, until he heard about a practice called whitewashing.
– Whitewashing practically means making your home look like a white-skinned person or family lives there, Duffy says.
He decided to give it a try.
Hide hair products and high heels
Duffy ordered a new estimate and left blank the section asking about the customer’s race. He announced by email that the apartment would be presented by his “brother”. On the phone, he could have been exposed as black.
A colleague’s Caucasian man agreed to play the brother.
After that, it was time to make the house “whiter”.
Duffy hid the African American artefacts – masks, paintings and a carved wooden giraffe. Hair products favored by black women were given way and even the highest heels were put out of sight.
He bought an exercise ball and an exercise mat for the guest room and turned the space into his own small yoga room.
– Yes, yoga is such a white woman’s thing, Duffy says and laughs.
Whitewashing was not easy mentally.
Duffy shows photos of his daughter and mother.
– My beautiful daughter and my beautiful mother. They had to be hidden as if I was ashamed of them.
Whitewashing doubled the value of the apartment
After the whitewashing, the fake brother presenting the house Hank Daunhauer stepped into his own role.
– My task was to let the Appraiser in, introduce the brother and answer any questions.
The plan worked. Duffy’s home doubled in value to $259,000.
– I was crazy with happiness, Duffy recalls.
Great joy was soon mixed with sadness.
– All my life I have been told that I have no value. Now I found out that I actually have a value less than zero. The value of the apartment doubled while I stayed away.
The Duffy case is the tip of the iceberg
Over the past couple of years, several similar cases have been revealed in the United States.
In California, the whitewashing of a couple’s apartment led to a half million dollar increase in value. In Florida, on the other hand, the family received $135,000 more after laundering. Similar cases have also come to light in Ohio and Baltimore.
– The cases that got big headlines are only the tip of the iceberg, says an assistant professor working at the University of Illinois Junia Howell by e-mail.
Howell and Associate Professor Elisabeth Korver Last fall, Washington University in St. Louis conducted a study based on tens of millions of housing evaluations published by the federal government.
Researchers estimate that white homes are valued at twice the value of comparable homes in neighborhoods of people of color.
The TV company ABC’s data analysis showed, on the other hand, that when a family living in a black neighborhood applies for refinancing from a bank, it is almost five times more likely than a white family that the apartment will be assessed below market value.
– The biggest injustices are so deeply rooted that they cannot be solved by changing the interior or using substitutes, says Howell.
97 percent of reviewers are white
The causes of the discrimination problem in the housing market can be traced back to the 1930s, when the federal government wanted to help people by guaranteeing them mortgages.
Officials demarcated black areas on maps in red. No loan guarantees were given to those areas.
– Over the years, investments were made in white neighborhoods, while no loans were given for investments in black neighborhoods. This is still reflected in the values of the apartments, he says Jillian White.
White is a former home appraiser. Today, he works as an advisor in matters concerning discrimination in the housing market.
Another problem is the profession of evaluators, says White. About 97 percent of them are white.
– These publicized cases are an example of the prejudices of individual evaluators.
A think tank Brookings states in its report that appraisers’ biases explain 20 percent of the undervaluation of African-American homes.
Jillian White believes that the undervaluation of black housing has major social consequences.
– Most Americans have their wealth tied up in their homes, and if they can’t access that wealth, it can have multi-generational effects.
Even Duffy could not have supported his daughter by giving her her mother’s house, against which the daughter can now take out a loan for her own needs.
– If he wants to start a company or pay for his own daughter’s university education, he now has the opportunity to do so.
In the United States, the undervaluation of black housing values leads to a $162 billion loss of wealth, according to Brookings.
The front organization is planning reforms
For this article, requested an interview from the Appraisal Institute. It didn’t happen, but in a written statement submitted to , the organization said that “every case in which a consumer feels that they have been discriminated against based on their skin color is shocking”.
The Appraisal Institute plans to make reforms aimed at making it easier for minorities to enter the appraisal profession.