An important revamp of the appraisal industry’s standards guidelines – including an important update to an ethics policy meant to address racial bias concerns – has been delayed by a full year.
The Appraisal Foundation’s Appraisal Standards Board announced that the current edition of the Uniform Standards of Professional Appraisal Practice, or USPAP, will stay in effect for another year, through Dec. 31, 2023. The USPAP governs all appraisers in the country.
This also means that a new ethics rule contained in the standards won’t take effect until 2024, as well.
“After careful consideration, the Appraisal Standards Board has voted to extend the current edition of USPAP through December 31, 2023,” Appraisal Standards Board Chair Michelle Czekalski Bradley said in a statement. “The ASB launched a comprehensive review of the ETHICS RULE in February and just released the resulting Third Exposure Draft in July. As USPAP matures, revisions such as this will take more time to conduct the requisite research to ensure changes continue to uphold the public trust. I am proud of the work we have done, in conjunction with the preeminent fair housing law firm Relman Colfax, to develop the proposed changes to the ETHICS RULE in the Third Exposure Draft, and the Board looks forward to receiving public comment on this proposed change.”
The delay comes as federal housing regulators and the news media are increasing their scrutiny of racial bias in home appraising. The Biden administration and the Massachusetts Board of Real Estate Appraisers have launched action plans aimed at eventually rooting out such bias, whether conscious on the part of the appraiser, caused by poor training or problems in the way the appraisal system works that cause Black-owned homes to be frequently undervalued compared to white-owned homes.
The draft ethics rule released by the Appraisal Standards Board in July includes a new nondiscrimination section that explains how existing nondiscrimination laws, like the federal Fair Housing Act, also apply to appraisers. It also tries to guide appraisers away from ways bias can creep into an appraisal, like using “assumptions, stereotypes or proxies” about people based on race, gender, sexual orientation, disability or other protected classes or the demographics of a neighborhood when writing an appraisal.