INEQUITIES

debt and also your income isn’t as high as it should be. So, your entire debt-toincome ratio doesn’t allow for you to purchase a home.”

Discrimination

In a national statistical analysis of more than 2 million conventional mortgage applications for home purchases, a data-based news publication called e Markup found that lenders were 40% more likely to turn down Latino applicants for loans, 50% more likely to deny Asian/Paci c Islander applicants, 70% more likely to deny Native American applicants and 80% more likely to reject Black applicants compared with similar White applicants.

Even for families of color that may not struggle immediately with wealth and knowledge disparities, discrimination persists in the housing market.

People of color are often treated di erently in appraisals, lending practices and neighborhood options.

Stories about what that looks like in the Denver area abound. Johnson of the Black Business Initiative lived in Westminster before moving to Aurora. When she was staging her home to sell, her real estate agent gave her some advice.

“It was encouraged for me to make sure I had no family photos up,” she said.

Meanwhile, she visited homes for sale that had photos of White families.

Johnson said it was good business advice. Her Black Realtor, Delroy Gill, understood the landscape and was looking out for her.

“ at’s my Realtor trying to get me top dollar,” she said. “ e question is, why would (leaving) my photos prevent me from getting top dollar?”

Gill said the practice of taking down photos removes potential hurdles that could occur for his clients. For Black clients, race is sadly one of those hurdles that could a ect how appraisers, inspectors and potential homebuyers view the home, he said.

“We do know racism is a real thing,” he said. “And it exists in every facet of life. So therefore, when you are faced with the unknown, it’s better to make the adjustments based on how society is versus taking the risk of creating more damage on Black wealth by them receiving less funds for their homes.” e advice Gill gave Johnson was not unique. Paige Omohundro, business development manager at the Colorado Housing and Finance Authority said her team heard similar stories in recent focus groups with real estate agents, nonpro ts, lenders, housing advocates and people trying to achieve homeownership in Black and African American communities. She said these stories were shared by members of Hispanic and Latino communities as well.

Gill said that because of his precautions, discrimination rarely impacts his clients’ sales. One time, however, the preparation was not enough.

A couple of years ago, Gill was working with an interracial couple to sell their home in Parker. When the appraiser arrived, the Black husband was leaving the property.

“I own investment properties in the area, so I know the area very well,” Gill said. “And I used to live in the neighborhood. So the value that we gave to the house was very appropriate — and the appraisal came in $100,000 less (than our value).”

According to Gill, the buyers, who were White, decided to pay the extra $100,000 out of pocket because they knew the original asking price was fair.

“ e agent and the buyers thought that the price was reasonable and that the appraiser made a big mistake,” Gill said. “We tried to dispute the appraisal and failed. He said he’s not going to change it.” e study found that, based on over 12 million appraisals from Jan. 1, 2016 to Dec. 31, 2020, 8.6% of Black applicants receive an appraisal value lower than contract price, compared to 6.5% of White applicants. In the study, Freddie Mac said it would be valuable to conduct further research to understand why this gap exists. ere are e orts to change the process. According to the Urban Institute, a nonpro t research organization, 89% of all property appraisers and assessors are White while only 2 percent are Black and 5 percent are Hispanic. Addressing the lack of diversity in the profession could improve outcomes for Black and Hispanic communities, the organization said. e Appraiser Diversity Initiative, a program led by mortgage-buying companies Fannie Mae and Freddie Mac and civil rights organization the National Urban League, is teaching new potential appraisers with a diversity of identities in an e ort to close this gap.

Gill said the homebuyers noted that the low appraisal was probably due to racial discrimination.

According to a 2021 study by Freddie Mac, a government-sponsored mortgage-buying company, this experience was not rare. Black and Latino mortgage applicants get lower appraisal values than the contract price more often than White applicants, according to the study.

In a report by the National Fair Housing Alliance, however, personal stories like that of Gill’s clients make the case that the appraisal gap comes from racial or ethnic discrimination.

One of these stories, originally reported by the Washington Post, was about a mixed-race couple in Denver. An appraiser greeted by the White wife valued the house at $550,000, whereas one greeted by the Black husband valued it at $405,000. e lower value appraisal report explicitly compared the home to others in a nearby predominantly Black neighborhood, even though that’s not where the house was located.

Since 1968, housing discrimination based on race has been illegal under the Fair Housing Act. Nine years before that federal law was signed, Colorado was the rst state to pass its own fair housing laws, according to the Colorado Housing and Finance Authority.

Although it is illegal, discrimination in housing based on race or color still happens, according to the Department of Justice. e department has led cases related to lending discrimination, including a 2012 Wells Fargo case in which the bank was forced to pay a settlement for its pattern of discrimination against quali ed Black and African American and Hispanic and Latino borrowers.

Approaching inclusion in real estate from a wider perspective, a program through the Urban Land Institute Colorado works to train women and people of color in development. is program, called the Real Estate Diversity Initiative, aims to create urban landscapes that serve diverse communities.

“I think trust in community-building is key,” Executive Director Rodney Milton said. “When developers build projects, they need community support because they’re shaping the community. And who better to be equipped to strengthen a community, to build it out, to revitalize it, then the folks who are from that community?”

Welcome to Fairhaven

Housing is a source of discrimination complaints. e Colorado Civil Rights Commission Annual report found that 14% of complaints were claims about housing issues.

Chantal Sundberg, a Black Realtor who works in the metro Denver area, said she has not witnessed or experienced discrimination in her work with her clients, most of whom are Black.

“Everyone is treated equal, whether it’s borrowing or buying homes,” she said.

Sundberg witnessed the 1994 Rwandan genocide, when hundreds of thousands of members of a minority ethnic group called the Tutsi were murdered by members of the Hutu ethnic majority. In her eyes, although it might be important to talk about topics of racial discrimination, focusing on them too much can have unintended consequences.

“When we emphasize them so much, it creates more division rather than unity,” she said.

Still, discrimination is an ongoing concern for the National Association of Realtors and Brokers. Sundberg said Realtors are trained to address discrimination issues.

And to Gill, the Realtor who helped Johnson sell her home, the association’s training is not enough to help all real estate agents.

“Race is a part of it, but it’s not the indepth, you know, ‘how to understand if you’re being a racist or not,’” he said.

To address such concerns, the association released an immersive online simulation in 2020 that aims to train agents to recognize and avoid acting on their own biases.

e program is part of the association’s Fair Housing Act Plan, which leaders created to emphasize accountability and culture change. e training is meant to make housing more accessible and a ordable to people of color.

A White Colorado Community Media reporter went through the online simulation, which takes place in a ctional town called Fairhaven. e simulation puts a person in the shoes of potential homebuyers who are experiencing discrimination.

One scenario is based on a federal court case, Clinton-Brown v. Hardick. In 2020, Todd Brown and Ebony Clinton-Brown led a suit against Helene L. and John Hardick alleging violations of the Fair Housing Act and Rhode Island law.

e case claims the Hardicks noticed Clinton-Brown’s rst name and asked their real estate agent if Ebony was Black. When they learned she was, the Hardicks refused to sell their property and the agent withdrew the listing upon the Hardicks’ request, ceasing communication.

roughout the simulation, agents attempt to theoretically sell four homes within six months while coming across day-to-day happenings including the views of colleagues and encounter issues like language barriers. e simulator provides for moments of re ection