Black couple selling home got higher valuation when they asked white friend to pretend it was theirs

A Black couple in California has sued a real estate firm alleging their home was undervalued by nearly $500,000 (£377,877) because of their race.

Paul and Tenisha Austin, residents of Marin County near San Francisco, alleged in a lawsuit that their real estate appraiser Janette Miller, her company Miller and Perotti Real Estate Appraisals and national appraisal company AMC Links LLC, through which Ms Miller was contacted, racially discriminated against the couple while valuing their house.

The couple filed a housing discrimination lawsuit in the Northern District of California on Thursday.

The couple said their home was purchased in 2016 at $550,000 (£415,665).

Over the last four years, the couple made significant renovations, including adding a new floor which added 1,000 square feet of space to their home. They also added a new deck as well as new appliances and a fireplace. The renovations were estimated to have cost $400,000 (£302,298).

In their complaint, the couple said that in 2020 they sought to refinance their mortgage and wanted to revalue their house.

Ms Miller and her company were hired through AMC Links LLC, who later appraised the house at $995,000 (£751,966).

The couple then asked a white friend to pose as the house owner and erased all evidence of their racial identity and replaced it with artwork and photographs of their friend’s family.

“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,” Ms Austin told ABC7 in February.

The couple’s legal complaint said that when a different appraiser came and inspected the Austins’ home, the appraiser arrived at a value of $1,482,500 (£1,120,391), a nearly 50 per cent increase in the home’s value.

The complaint noted that Marin County has a long history of stereotyping as well as redlining — a practice of racial discrimination whereby banks and other institutions treat households in areas populated by ethnic minorities as being a greater financial risk.

“Likewise appraisers, including defendants, have continued to use race-based criteria in assessing property value, including limiting comparisons to houses within areas of similar racial demographics and valuing predominantly white areas more highly than other areas,” said the complaint.

Marin County’s population was 85.3 per cent white, 2.8 per cent Black, 6.6 per cent Asian and 16.3 per cent Latino as of July 2019, according to the US Census. The county’s Black residents are overwhelmingly concentrated in two census tracts, one of which is located in Marin City, said the complaint.

“We believe the white lady wanted to devalue our property because we are in a black neighbourhood, and the home belonged to a black family,” Mr Austin told the San Francisco Chronicle.

“My stomach hurt, my head hurt, just because of what we went through. I don’t wish that on anybody,” he added.

Real estate firm Redfin found that in 2020, only 44 per cent of Black Americans owned homes compared to 74 per cent for white Americans.

The couple’s lawsuit alleges that the federal Fair Housing Act was violated as they had been denied housing opportunities on the basis of race. The lawsuit also demands a trial by jury.

“I want to see a change. I don’t want to see my children have to deal with this,” Mr Austin added.