Property is Power!When ZIP Codes Dictate Worth Appraisal Gaps in Black Neighborhoods

November 12, 2025

The article examines how homes in predominantly Black neighborhoods are systematically undervalued compared to similar properties in white neighborhoods, with an average disparity of $48,000 per home resulting in over $156 billion in cumulative losses nationwide. This devaluation stems from historical redlining policies during the New Deal era that designated Black neighborhoods as "hazardous," creating biased valuation frameworks that persist today through comparable sales methods that embed racial prejudice. The undervaluation perpetuates the racial wealth gap by limiting Black homeowners' ability to refinance, invest in improvements, or build intergenerational wealth, while also causing psychological harm by signaling that Black communities are worth less.

Who is affected

Black homeowners in majority-Black neighborhoods
Black families attempting to build and transfer intergenerational wealth
Entire Black communities experiencing economic marginalization and disinvestment
Future generations of Black families seeking to purchase property
Black neighborhoods and their residents who face psychological impacts from systematic devaluation

What action is being taken

No explicit ongoing actions are currently described in the article. The article discusses historical practices and proposes future solutions but does not describe actions currently being implemented.

Why it matters

The systematic undervaluation of Black-owned homes perpetuates the racial wealth gap, with Black families holding only one-fifth of the median wealth of white families even after controlling for education and income. This disparity extends beyond immediate financial loss—it prevents Black homeowners from leveraging equity for business opportunities, education funding, or home improvements, effectively blocking upward mobility across generations. The issue represents both an economic injustice totaling over $156 billion in cumulative losses and a moral indictment, as it demonstrates how racial bias continues to shape market valuations and reflects broader societal devaluation of Black communities and lives.

What's next

1. Federal agencies and professional associations must enforce stronger oversight and transparency through random audits, algorithmic bias testing, and community participation in valuation standards
2. Increase the number of Black appraisers through training and certification programs at HBCUs and through community pipelines
3. Local governments should implement tax credits, equity-based lending programs, and fair-appraisal initiatives to incentivize reinvestment in undervalued communities
4. Community development financial institutions and mission-driven lenders should provide alternative financing options
5. Black homeowners should be educated about their rights to request reconsideration of value, submit comparable properties, and file fair housing complaints

Read full article from source: Michigan Chronicle