Appraisal Institute Offers Assistance to Illinois Valuation Task Force

On Dec. 20, the Appraisal Institute’s Manager of State and Industry Affairs Scott DiBiasio met with the Illinois Real Estate Valuation Task Force, offering its resources and assistance as subject matter experts and thought leaders on the subject of valuation bias.

The task force was established by the Illinois General Assembly in January 2023 “to directly address discrimination in the valuation of real estate and underwriting of loans in racially diverse or ethnic communities.” Upon completion of its work, the task force will publish and submit a report of its findings and recommendations to the governor and general assembly by Jan. 1, 2025.

Specifically, the task force is working to identify racial disparities in the valuation of real estate used to underwrite loans and the causes of those disparities and is analyzing and reviewing collateral underwriting standards; standards for appraisals and alternative evaluations (such as automated valuation models); procedures for reconsiderations of value by consumers; and guidance related to collateral underwriting challenges (such as energy-efficient housing and limited or inactive markets). Additionally, the task force is evaluating the barriers to entry for the valuation profession.

The Appraisal Institute has advised the task force that many of the subjects that they are required to review are outside of state control but also already being evaluated at the national level.

In carrying out its responsibilities, the task force is required to consult with a number of stakeholder groups, including civil rights and consumer advocates, real estate valuation organizations, appraisal management companies, experts on automated valuation models and The Appraisal Foundation.

The task force itself comprises representatives from state agencies, including the Department of Financial and Professional Regulation, Department of Commerce and Economic Opportunity, Department of Human Rights and the office of the Illinois attorney general. Additionally, it has representatives from the Neighborhood Housing Services of Chicago, the Central Illinois Board of Realtors, banks and credit unions operating in the state, practicing appraisers and real estate agents.

The next meeting is scheduled for mid-January, and the Appraisal Institute will participate in that one and all future meetings in order to advocate on behalf of the valuation profession.