Marin couple, fair housing group sue North Bay appraiser for alleged racial discrimination

A regional fair housing advocacy group filed a civil lawsuit in federal court Thursday claiming discrimination after a Marin couple received real estate appraisals almost 50% apart because of their race, the complaint alleges.

The Fair Housing Advocates of Northern California filed the suit in U.S. District Court in San Francisco on behalf of Paul and Tenisha Tate-Austin.

According to the action, the Marin City couple renovated their home bought for $550,000 in December 2016. During a refinance in 2020, the Austins got a valuation for $995,000 by Janette Miller of Miller & Perotti appraisers. The San Rafael firm was hired by AMC Links LLC to inspect the home owned by the Black couple.

Miller, her firm and the Lehi, Utah company are all named defendants. Neither Miller or AMC Links returned calls seeking comment.

Suspecting the appraisal was low, the Austins ordered a second appraisal three weeks later by a different firm. The suit states they staged the home, deleting any evidence of their African American culture, such as pictures and art, and tapped their white friend to greet the appraiser. The estimate came in at $1.48 million, which is about what the median home value is for a single-family home in Marin County.

“Few of these cases happen, but this has been going on for years,” Fair Housing Supervising Attorney Julia Howard-Gibbon told the Business Journal. “Appraisers seem to think they need to stick to the composition of neighborhoods.”

Howard-Gibbon contends the appraisal should have included “comps,” as in comparable houses to gauge adequate worth, from outside the city to get a wider view of what homes go for in Marin County.

The attorney believes the appraiser was solely influenced by who owned the house and the minority representation in the unincorporated area of the county.

According to a recent demographic report issued in July 2019 by the U.S. Census, Marin County’s population is comprised of 85.3% white; 2.8% Black; 16.3% Latino; and 6.6% Asian residents.

The plaintiffs, which include the advocacy group, seek unspecified damages.

“As a result of the unlawful housing practices of defendants as alleged herein, plaintiffs Tenisha Tate-Austin and Paul Austin suffered damages, including loss of financing opportunity in connection with their dwelling, economic losses, emotional distress with attendant physical injuries, and violation of their civil rights,” the legal complaint reads. “In addition, defendants’ discriminatory housing practices result in lower property values in Marin City generally, to the detriment of plaintiffs.”

The lawsuit states the defendants’ actions violated the California Fair Employment and Housing Act, which stipulates the following violations: “Making, printing or publishing notices or statements with respect to the sale of a housing accommodation that indicates a preference, limitation or discrimination based on race.”

“We believe that Ms. Miller valued our house at a lower rate because of our race and because of the current and historical racial demographics of where our house is located,” Paul Austin said in a statement. “The sales comps that the appraiser chose to use were unsuitable and were guaranteed to lower the value of our house.”

The advocacy group cites circumstances in which appraisers choose comparisons of other home sales located substantially closer to the property receiving an appraisal if within a Black or Latino census tract, Executive Director Caroline Peattie pointed out.

“We believe that this is exactly what happened with the Austins’ appraisal,” she said, further explaining that using comparisons of other property sales located exclusively or primarily in Marin City results in a skewed and race-based valuation of the property. This bias occurs when the selection of comps from areas historically devalued by discrimination perpetuates and exacerbates the undervaluation of Black-owned homes in Black neighborhoods, the complaint adds.

North Bay real estate agents across three counties have heard a few instances of this type of legal challenge, which includes a noteworthy one in Long Island, N.Y., that placed the National Association of Realtors on notice. Labeled “Long Island Divided,” Newsday reported in November 2019 it conducted an undercover operation lasting three years that resulted in 86 tests showing bias in the red-hot real estate industry.

“It is something that all in the real estate community is grappling with — this issue of diversity, this issue of fairness,” said Carol Lexa, a Compass Healdsburg real estate broker and the past president of the North Bay Association of Realtors.

In 2020, the national association also laid out new guidelines to guard against presumed discrimination against minorities.

“This is something we’re all taking very seriously,” Lexa said.

Marin City, situated southeast of Mill Valley and northwest of Sausalito, was populated in the 1940s by those who migrated to work in the Sausalito shipyards. The Austins’ 20 Pacheco St. address is in Sausalito.