'Cybersecurity incident' shuts down London Drugs stores across Western Canada
All 79 locations of pharmacy and retail chain London Drugs were shut down Sunday after it was the victim of a “cybersecurity incident.”
Erica and Aaron Parker first had their Loveland, Ohio, home appraised in 2020. It was a competitive selling market, they had made several renovations to the home, and houses in the neighbourhood were generally selling above the asking price.
The couple expected the house to be valued at the list price of $525,000, but when the initial appraisal came back $60,000 short, the Parkers knew something wasn't right.
So they tried a different approach and also hired a different appraiser. The Parkers removed all items from the home that might signal they were Black, including artwork and family photos, and replaced them with photos and memorabilia borrowed from a White neighbour.
The White neighbour sat in for the couple when the new appraiser came, and the result was a home appraisal of nearly $92,000 more than the first.
"It was a weird feeling but we felt vindicated," Erica Parker told CNN. "We were like, 'Oh my God, we really were discriminated against.'"
Parker's account backs recent data showing that homes owned by Black people are significantly undervalued compared to White-owned homes. According to the Brookings Institute, homes in Black neighbourhoods are valued at 23% less than those in non-Black neighbourhoods despite having similar quality and amenities.
Advocates for Black homeowners say this bias contributes to the racial wealth gap because it limits the financial returns of real estate for Black families.
Some say it's a systemic issue that industry leaders blame on a lack of diversity and a methodology that gives appraisers too much discretion in deciding the value of a home.
According to the latest data from the US Bureau of Labor Statistics, 92% of property appraisers and assessors in 2022 were White and 4% were Black.
Lydia Pope, president of the National Association of Real Estate Brokers, says her organization is working to recruit more Black people into the appraisal industry. The association hosts annual summits at HBCUs to encourage students to join the field, and Pope offers workshops and training for people already working in the real estate industry who want to learn how to do appraisals.
"Our concern is that there aren't enough Black appraisers in the business," Pope says. "We just want to make a stand that we have to change the culture of appraising."
Pope calls it "disturbing" and "discouraging" that Black homeowners are having to "whitewash" their homes or conceal their race to get a higher appraisal.
She says appraisers typically assess factors such as the condition of the property, upgrades and the value of recently sold comparable properties nearby.
Jillian White, a Black appraiser who heads a consultancy that advises homeowners on disputing low appraisals, says, however, that appraisers are able to use their own discretion and opinion to make adjustments to the value of a home, and that leaves room for bias.
"I think it's systemic, implicit, explicit and structural," White says of appraisal bias. "You have all these inflection points where making different decisions can lead to a very different result. The methodology is not so hard and fast that every appraiser is going to come up with the same value."
White says the industry needs to implement more guidance and protections so that appraisers have less autonomy in the process.
Joshua Walitt, president of the National Association of Appraisers -- which condemned discrimination among professional appraisers last year -- says the methodology is not the problem. Instead, Walitt blames "bad apples" working in the profession for instances of bias.
And even if there is bias, Walitt says it should have no influence on appraisal results given that these are based on market data.
"If we follow methods and techniques which is what we focus on in education, then what it does is it pushes aside any bias that a person could have," Walitt says. "If there is bad behaviour then we need to let the investigations go through and take care of that."
Still, Walitt acknowledges that there is a need for more diversity in the industry. He says he is committed to expanding recruitment and supports programs such as Practical Applications of Real Estate Appraisal (PAREA) that make it easier for people to gain experience and join the industry.
The issue of bias in home appraisals has gained the attention of President Joe Biden's administration, which launched the Action Plan to Advance Property Appraisal and Valuation Equity (PAVE) last year to promote equity in the home appraisal process. In late March, the administration announced progress in this effort including publishing guidance so Federal Housing Administration (FHA) borrowers know how to request a "Reconsideration of Value" if they suspect bias in their appraisal.
White says she wants Black homeowners to know their options when appraisals come in low. She advises her clients to appeal the first appraisal and if that doesn't work request a second appraisal. If nothing changes, White says homeowners can file complaints with the Department of Housing and Urban Development, the state appraiser board, or the Consumer Financial Protection Bureau.
Claims of bias have also to led to successful legal challenges from some homeowners. In March, San Francisco area Black couple Paul Austin and Tenisha Tate-Austin settled a discrimination lawsuit against a real estate appraisal company after their home was undervalued by nearly $500,000. As part of the settlement, the couple is set to receive an undisclosed amount of money and the firm is required to attend housing discrimination prevention training.
"Having to erase our identity to get a better appraisal was a wrenching experience," Tate-Austin said in a statement released by her lawyers to the San Francisco Chronicle. "We hope by bringing attention to our case and this lawsuit settlement, we can help change the way the appraisal industry operates."
Erica Parker says they ultimately sold the house in Loveland for $507,500 and bought a new home in Westchester, Ohio. However, she filed a discrimination complaint with both HUD and the Ohio Department of Commerce. Neither has yet been settled, she said.
She says her experience only affirms that racism still exists in real estate.
"We want the bank and appraisal company to be held responsible for what they did and to prevent this from happening to other people of colour," Parker said.
All 79 locations of pharmacy and retail chain London Drugs were shut down Sunday after it was the victim of a “cybersecurity incident.”
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