The Department of Housing and Urban Development (HUD) notified the leading authority in US property appraisals on Monday that it no longer needs to abide by a potentially unlawful Biden-era deal that “forced racial preferencing” on the industry — the latest move by the Trump administration to stamp out diversity, equity and inclusion (DEI) initiatives.
Under former President Joe Biden, HUD used disparate impact theory — the idea that a neutral policy has a disproportionately negative effect on underrepresented minorities — to impose race-based policies on the Appraisal Foundation, a nonprofit entity authorized by Congress to set qualifications for property appraisers.
“Property appraisals are an integral component of helping Americans realize the dream of homeownership,” HUD Secretary Scott Turner said in a statement. “But the Biden Administration weaponized the Fair Housing Act to inject DEI into the appraisal industry, focusing on illegal race preferences rather than ensuring every American has equal access to quality, affordable housing.
“Today, HUD is ending the politicalization of property appraisals to restore fairness and equality to civil rights enforcement and housing.”
There was never any evidence of actual racial discrimination in the appraisal industry, according to the Trump administration, only a disparate impact analysis that found appraisers were more likely to be white than black.
“Based on its obsession with disparate impact theory, the Biden Administration’s FHEO [Office of Fair Housing and Equal Opportunity] expended finite enforcement resources poring over data from the Bureau of Labor Statistics to determine the racial composition of persons in the appraisal industry,” current FHEO Assistant Secretary Craig Trainor wrote in a letter, obtained by The Post, notifying TAF of the scrapping of the agreement.
“When it discovered the high ‘percentage of [w]hite persons in the [appraisal] occupation,’ FHEO deemed this a problem to which it would provide a coercive government solution,” Trainor continued.
Using disparate impact theory, the Biden administration reasoned that the apprenticeship model historically used to train new appraisers “perpetuates racial homogeneity in the appraisal profession.”
The Biden administration, however, issued “no findings or any other credible determination” that intentional racial discrimination was taking place within the industry.
The Appraisal Foundation argued that its qualification criteria did not violate federal civil rights laws and “protected the economy and maintained public trust in the appraisal industry by ensuring minimal qualifications to ‘competently conduct appraisals,’” Trainor noted.
“For most American homeowners, their largest financial asset is their home,” the assistant secretary wrote. “The necessity of having competent appraisers assess the value of their property should not ordinarily generate controversy.
“Nevertheless, the Department and TAF entered into a conciliation agreement.”
The conciliation agreement resulted in the Appraisal Foundation pledging to fund initiatives “that prioritizes serving aspiring appraisers who are people of color”; create a “Special Committee” to promote diversity and a “Council to Advance Residential Equity”; and implement “outside DEI consultant’s recommendations.”
The 2024 deal ended the government-initiated investigation into the group, which was launched despite no federal civil rights complaint being filed.
The Trump administration terminated the deal, effective immediately, after Trainor determined the conditions were “untethered” from the Fair Housing Act and did not “advance fair housing protections or the interests of the United States.”
The Appraisal Foundation did not immediately respond to The Post’s request for comment.
“Rather than focus on real people with real fair housing issues, President Biden’s HUD focused on the racial composition of the appraisal industry,” Trainor said in a statement. “Weaponizing disparate impact theory, the ideological enforcers in Biden’s Office of Fair Housing and Equal Opportunity forced racial preferencing into the appraisal qualification protocols.
“That is not only overreach, but it does not serve the American people. HUD is back in the business of promoting excellence and ensuring equal treatment before the law.”
