YOUNG BLACK ENTREPRENEUR MAGAZINE

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NICKEL-AND-DIME: HOW ITS NOT ADDING UP IN OUR FAVOR

By Trishunda A. Mooney

In the fall of 2021, Okeeba Jubalo and his wife felt their Atlanta home was undervalued upwards of $25,000 by the appraisal company, Georgia Appraisal Services.

The home where the Jubalo’s raised their three children sits on a large cul-de-sac lot, sizeable front, and back yard, conveniently located near the Hartsfield-Jackson Atlanta International airport, shopping and entertainment, according to Zillow.

The West Cascade homeowners of over 10 years believed, “there was no way their appraisal price should have been close to the price of the two smaller homes next door,” Jubalo said based on the difference in specifications of their property.

They had every right to believe so as low appraisals in minority communities are not an uncommon practice. Jubalo explained, “We did our research about the value of the house, the value of the neighborhood while at the same time being aware of the challenges black families have when playing the real estate game.”

Housing racial discrimination evidence has been consistently pointed out by fair-housing advocates. For example, the Black California couple who was low-balled in their initial appraisal. They later received a $500,000 difference in the appraisal price after asking a White friend to act as the homeowner. Also pointing out, a Denver couple who got a $145,000 increase on their second appraisal following the same game plan.

         When a single Black female of Indianapolis received her first appraisal at $125,000, she got an independent market analysis estimating her home valued at $187,000. Adding the omission of her race and gender from the new lender application to the above used formula, the second appraisal was more than doubled at $259,000.

Often consumers are discouraged from the home buying process when faced with any level of discrimination. In situations where the appraisal has a slight difference, research shows racial bias possibly being a factor that flies under the radar of consumers.

Fighting for fair treatment in the housing market is not a topic recently unearthed. Minorities homeowners have intently put in the work to acquire the American dream but are repeatedly stepping up to the finish line only to learn that the mark has again been moved or deviously finagled.

This information was collected for the readers who may think $25,000 is pocket change or to enlighten those who truly may not understand the longstanding effects of low appraisals in communities occupied by majority minority residents. It persuaded us to shine light on a careless, yet profound strategy currently used against today’s fight for wealth equality. It is an age-old business tactic known as nickel-and-dime.

Fighting out of the red corner you have a heavyweight champion, nickel-and-dime. It has been in the game since the early 1900s. Strengths are exhibited when it lands small but continual insignificant jabs to inflict long term pain. Fighting in the blue corner, wealth equality. Struggling to win a match it displays the stamina and promise to leverage massive disparities between the rich and poor with its powerful strikes.

 

Author of “Know Your Price: Valuing Black Lives and Property in America’s Black Cities,”Andre M. Perry, Ph.D. wrote, “The reality is that there are policies and practices in place that extract wealth from black people and black neighborhoods.”

 

When homeowners receive undervalue appraisal opinions of $5,000 here or $15,000 there, studies show how these “insignificant” blows are linked to wounding not only the homeowner but also the neighborhood, surrounding school system, healthcare, and local businesses over time.

 

Because taxes are assessed based on the value of neighboring homes, it navigates the type of education the children receive and accessible resources for the residents. The lack of readily available to minority communities potentially places individuals and families in a “vicious downward social, political and economic spiral,” Dr. Perry shared. 

 

While sitting in a Birmingham, Alabama jail cell after being imprisoned for his participation in a nonviolent demonstration against segregation, Reverend Dr. Martin Luther King, Jr. penned a letter that included the statement, “Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny,” Dr. King added, “Whatever affects one directly, affects all indirectly.”

 

A case study led by Dr. Perry reported, “homes in Black neighborhoods are underpriced by 23% about $48,000 per home, cumulatively about $156 billion in loss equity.” With the nickel-and-dimes adding up over time, imagine the quality of education afforded to minority citizens, neighborhoods experiencing a decline in the crime rate due to better policing infrastructure, significant resources available for residents to build safer and prospering communities including local businesses. This ill-played sucker punch has inevitably taken a divisive toll on growing the economy and overall unification of humanity. 

 

Putting the cumulative total in loss equity into perspective, “$156 billion would have financed more than four million black owned businesses,” Dr. Perry shared, “it would have paid for more than eight million four-year degrees based upon the average amount of a four-year diploma at a public institution.”

 

Some would argue, it is unimaginable to compare low appraisals to having police dogs turned loose on nonviolent demonstrators, fire hoses being released at full pressure onto human flesh for sitting at a lunch counter or facing hostile mobs after accepting an invitation to visit a city for work. We must take a closer look to examine how the intent of the action stems from an equivalent impulse. Calling a spade a spade, they’re both ultimately achieving the same goal of feeding the monster that is inequality.

 

Don’t count wealth equality out just yet. Winning this match, can be done. Homeowners that feel they’ve received a low appraisal, request a reconsideration of value from the lender to ensure the original appraiser addresses your specific concerns. And always get a second opinion. Lastly, much like our predecessors, do not get dissuaded with the process of throwing limitless ‘powerful strikes’ to knock out using the nickel-and-dime practice of devaluing minority communities.