It is no secret that home ownership is a proven pathway to building wealth in the United States. But in a competitive housing market with some of the most expensive homes in the country, it is tough for Black Bay Area residents to buy a home to start the process.
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"It was work, but it was exciting," said Paul Austin, a homeowner in Marin City.
He and his wife Tenisha Tate Austin feel like they captured a slice of the American dream when they purchased their first home together in 2016.
The couple secured an original Marin City pole home, but faced a number of challenges in obtaining the property.
"As soon as like a house came on the market, you go in, you put your bid in, and then you get outbid by like, $100,000 or more, rather quickly," Austin said. "That can be a little bit depressing."
The Austins bought the home off-market from another Black family, who were hoping to make homeownership a reality for a young black couple.
After moving in to their home, which was originally built in the 1960s, the Austins staged major renovations.
The couple added an entire floor and more than another 1,000 square feet of space.
They didn't stop there, building a deck, new floors, a fireplace, and adding new appliances.
Then, the Austins got the home appraised.
"I read the appraisal, I looked at the number I was like, 'This is unbelievable'," said Tate Austin.
The family tells ABC7 that their appraiser was an older white woman.
The Austins are convinced race was a factor in her estimate.
The appraisal contains what the family believes was coded language, like "Marin City is a distinct area."
The home appraised for $989,000, or just $100,000 more than what the Austins got it appraised for prior to their renovations, despite $400,000 in costs.
"It was a slap in the face," said Austin.
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The family immediately called their lender and pushed back. After a month of escalating their complaints, The Austins were approved for a second appraisal.
When the day came for inspection, they got creative with the process.
"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,'" Austin said. "She made our home look like it belonged to her."
The home appraised for $1,482,000, or roughly $500,000 more than it appraised for just weeks prior.
The change was equal to a nearly 50% increase in value.
The Austins were outraged. They believe this is another ugly result of larger, systemic issues in the United States.
"There are implications to our ability to create generational wealth or passing things on if our houses appraise for 50% less than its value," said Tate Austin.
"We know discrimination is in nearly every aspect of that home buying process," said Jessica Lautz, National Association of Realtors vice president of demographics and behavioral insights. "We need to be addressing it as an industry."
Discrimination in the housing market comes in many forms, and has a long history in our country and in the Bay Area.
The phenomenon has led to alarmingly low rates of Black Americans owning their own home.
Black home ownership lags across the country with only 44% of Black Americans owning their home in 2020, according to Redfin. Compare that to 74% for white Americans.
In California, just 34% of Black Californians own a home, according to the National Association of Realtors.
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In the Bay Area, those numbers are even lower. Just 33% of Black San Francisco residents own a home, compared to 61% of white San Franciscans, according to Redfin.
The numbers are similar in San Jose with a Black home ownership rate of 31% and a white home ownership rate of 65%.
"There are still problems in the housing industry of Black people being steered away from white neighborhoods," said Daryl Fairweather, chief economist at Redfin. "Even though that is technically illegal, or black people not having the same access to mortgages that white people have."
According to the National Association of Realtors, Black applicants are rejected for mortgage loans at rates three times higher than that of white applicants.
Burdensome debt, as a result of the wealth gap perpetuated by systemic racism, is another factor that is suppressing Black home ownership.
"African Americans have nearly double the amount of student loan debt than we see for white homebuyers," said Lautz, "That's just one of the many hurdles that African American homebuyers are really strapped with and holds back their buying power."
The Great Recession and now the COVID-19 pandemic have only made things worse.
Lautz stresses that closing the home ownership gap is essential to closing the wealth gap in our country. In order for this to become a reality, equity in housing and access to affordable homes must be the central focus.
"If we are aware that implicit bias exists in other systems, police, school, why wouldn't they also exist in the housing market? And then what can we do to you know, fix that?" said Austin.
The Biden Administration has proposed a couple of plans that could increase home ownership in the Black community.
President Biden has proposed a tax credit of up to $15,000 to help first-time home buyers with down payments and a $100 billion fund to build and upgrade affordable housing for buyers and renters.