Dave Bunton
President, The Appraisal Foundation
Abstract: Over the last three years, the appraisal profession has been having serious conversations about valuation bias and the threat it poses to public trust. At The Appraisal Foundation, public trust is our mission, and even one instance of appraisal bias or discrimination hurts the trust that the public places in appraisers. This article presents the efforts of our boards to ensure that the standards and qualifications that real property appraisers must adhere to are strong and leave no room for an appraiser to discriminate.
As a result of these conversations, The Appraisal Standards Board (ASB) has quickly turned their focus to the Ethics Rule. After hearing from stakeholders that this rule needed a second look, the ASB started a comprehensive review of the Ethics Rule. This process included bringing in a leading fair housing law firm, Relman Colfax, to assist in the analysis. Relman Colfax’s years of experience and expertise in fair housing guided the board as they worked to propose and eventually adopt an updated Ethics Rule.
Over the course of five exposure drafts, the ASB heard from stakeholders across the profession including appraisers, users of appraisal services, consumers, and regulators. Gathering and considering all this feedback strengthened what the ASB adopted as the new version of the Ethics Rule. The extensive process also helped lead to several other changes to USPAP, and the adoption of a new edition of the Uniform Standards of Professional Appraisal Practice (USPAP), which goes into effect on January 1, 2024. As the new Ethics Rule has gone into effect, the ASB continues to gather public feedback to see if any additional guidance is needed to better equip appraisers to understand their nondiscrimination requirements stated in the Ethics Rule.
As the ASB was carrying out their work on the appraisal standards, the Appraiser Qualifications Board (AQB) was also busy determining the best way to address fair housing education requirements for appraisers. In September 2022, the AQB held a forum about valuation bias and fair housing education, to hear directly from stakeholders if the criteria requirements related to fair housing education should be modified. After hearing from regulators, appraiser membership organizations, and fair housing groups, it was clear that there was resounding support for a new requirement for appraisers to have a standalone valuation bias and fair housing laws and regulation course be a part of their education requirements.
This forum led to two exposure drafts from the AQB proposing adding fair housing and valuation bias education as a standalone course, and that is a required component of both a real property appraiser’s qualifying and continuing education. As the ASB did, the AQB consulted with Relman Colfax throughout this process and gathered feedback from a wide range of stakeholders. The AQB adopted a new edition of the Real Property Appraiser Qualification Criteria in 2023, and it will go into effect on January 1, 2026. As with all editions of the Criteria, states can begin implementing these new requirements now if they should choose.
The Board of Trustees has also taken action, establishing the Council to Advance Residential Equity (CARE) to complement the Foundation’s other two advisory councils. CARE is made up of nonprofit organizations with a mission of fair housing, civil rights and consumer advocacy. The first ten organizations to join the council held their inaugural in person meetings in 2023 and look forward to establishing regular meetings in 2024. Like the Foundation’s other councils, CARE is charged with providing advice to the standards and qualifications boards, but from the unique lens of the consumer. We look forward to their valuable contributions to our organization.
This is just the beginning of the work The Appraisal Foundation is undertaking to build public trust in the arena of valuation bias. Even one instance of appraisal bias and discrimination is one too many, and we will continue to listen to stakeholders to ensure that the appraisal profession is one that every American can place their trust in. Appraisers play a critical role in the housing industry of the greatest economy in the world, and we do not take that responsibility lightly. If you would like to get involved in our work, we welcome you to the table. Please visit our website and check out our Get Involved page to learn more about how you can work with The Appraisal Foundation to build public trust in this important profession.
David S. Bunton is President and chief operating officer of The Appraisal Foundation since 1990, responsible for overall organizational leadership. Prior to joining The Appraisal Foundation, David served as a staff member for twelve years in the U.S. House of Representatives and the United States Senate. Email david@appraisalfoundation.org