A black Bay Area couple has settled a lawsuit with the appraisal company who valued their home at just $945,000, when it was really worth $1.5 million, a fact the couple only learned when they got a white friend to pose as its owner.
The undisclosed settlement victory for Paul and Tenisha Tate Austin includes compensation from Janette Miller, the appraiser, and her business, Miller and Perotti Real Estate Appraisers, who had two different employees appraise the Marin City home within a few weeks of each other in 2020.
In addition to the money, Miller must agree to watch a documentary about the Austin family’s case titled Our America: Lowballed. She will also attend training on the prevention of housing discrimination.
Fair Housing Advocates of Northern California were also named in the lawsuit at co-plaintiffs. The group’s executive director, Caroline Peattie, told the San Jose Mercury News that the decision to settle was made due to the toll a long trial can take on a family.
‘Obviously we felt we had a strong case or else we wouldn’t have pursued it in the first place. Filing a lawsuit on the strength of the evidence is one thing and how a judge will rule is a separate question. You’re never assured of a particular outcome. I think everybody involved with the case was ready to move on,’ Peattie said.
Tenisha Tate-Austin and her husband Paul Austin said that they were ‘glad’ that the lawsuit was behind them
The couple sued appraiser Janette Miller, pictured, her firm Miller and Perotti Real Estate Appraisers, Inc over the low-ball figure the couple first received
Paul Austin said in a statement that the family was ‘glad’ to put the lawsuit behind them and described the experience of being lowballed to such a degree as ‘overwhelming,’ according to the Mercury News.
While his wife, Tenisha Tate-Austin, said: ‘The ongoing undervaluation of homes in Black neighborhoods perpetuates the wealth gap between Black and white families.
‘We hope by bringing attention to our case and this lawsuit settlement, we can help change the way the appraisal industry operates, and we can start to see a different trend,’ she continued.
The Austin family bought their home in 2016 for $550,000.
Paul and Tenisha couple said the first estate agent who appraised the house was an older white woman – Miller – who used coded phrases like ‘Marin City is a distinct area’ when she valued the property which they believe was race-related, according to an interview they did with ABC San Francisco in 2021.
When the couple’s white friend, Jan, pictured, posed as the owner of their home which went up in value to $1,482,000 – almost $500,000 more
The couple complained to their lender describing as ‘a slap in the face’ before the pair were finally approved for a second appraisal.
This time, the pair decided to run an experiment to see if their suspicions were right and got a white friend to pose as the owner.
They hid photographs and art work and replace it with their friend’s photos.
‘We had a conversation with one of our white friends, and she said. ‘No problem. I’ll be Tenisha. I’ll bring over some pictures of my family’. She made our home look like it belonged to her.’
‘There are implications to our ability to create generational wealth or passing things on if our houses appraise for 50 percent less,’ Tenisha added.
The couple carried out $400,000 of significant renovations in the five years since buying the home including a brand new floor which added 1,000 sq feet of space, a fireplace, new appliances and an outdoor deck.
But when it came to listing the property they found it had increased in the home’s value by just 10 per cent.
The couple bought their home in 2016 for around $890,000 but was valued at only $995,000 despite spending $400,000 on renovations
The couple carried out significant renovations in the five years since they had purchased the home including a brand new floor which added 1,000 sq feet of space, a fireplace, new appliances and an outdoor deck
The couple then had a white friend post as the owner and hid photographs and art work, replacing it with their friend’s photo
Following a second appraisal, they were shocked to find the home’s value increased by a further $500,000
The Austin family bought their home in 2016 for $550,000
‘I read the appraisal, I looked at the number I was like, ‘This is unbelievable,”’ Paul said to the ABC affiliate
Paul believed the low figure was as a result of the color of their skin.
‘I read the appraisal, I looked at the number I was like, ‘This is unbelievable.”‘ Paul said to the ABC affiliate.
‘We did our homework,’ Austin told the Reparations Task Force in a panel on the racial wealth gap in October, as reported by the San Francisco Chronicle.
‘We believe the white lady wanted to devalue our property because we are in a black neighborhood, and the home belonged to a black family.
‘My stomach hurt, my head hurt, just because of what we went through,’ Austin said. ‘I don’t wish that on anybody.
‘I want to see a change. I don’t want to see my children have to deal with this,’ he added.
Marin City, where the Austins live, is a historically black community.
‘There are definitely things about this complaint that are uniquely strong,’ said an attorney for the couple, Julia Howard-Gibbon, to the Chronicle. ‘They erased themselves from the home, essentially.’
Attorneys for the Austins note: ‘Marin City has a long history of undervaluation based on stereotypes, redlining, discriminatory appraisal standards, and actual or perceived racial demographics.’
Jessica Lautz, from the National Association of Realtors’ vice president of demographics and behavioral insights, said the couple’s case was not unusual.
‘We know discrimination is in nearly every aspect of that home buying process,’ she said. ‘We need to be addressing it as an industry.’
Black home ownership is far less across the country with only 44 percent of black Americans owning their home in 2021 compared to 74 percent for white Americans according to areal estate firm Redfin.
In the state of California, only 34 percent of black Californians own a home, according to the National Association of Realtors.