ASC Holds Second Hearing on Appraisal Bias
The Appraisal Subcommittee on May 17 held its second hearing to address appraisal bias, focusing on the current regulatory framework for the valuation profession, including appraisal standards, appraiser qualifications criteria, barriers to entry to the profession and valuation practices. The ASC heard from witnesses from the Appraisal Standards Board, the Appraiser Qualifications Board, the Association of Appraiser Regulatory Officials, the Fair Housing Alliance and a practicing appraiser.
The discussion primarily concentrated on the perceived barriers to entry to the valuation profession and alternatives to the mentor-trainee model, such as the Practical Applications of Real Estate Appraisal, or PAREA, and the practicum model. ASC members were supportive of an alternative path to entry, but expressed concern about the costs associated with PAREA and requested more information.
Following the hearing, the Appraisal Institute sent a letter to the ASC about its version of PAREA, writing, “we understand that to make AI PAREA work as an effective model it is important to make it available at a reasonable price. As a nonprofit organization, we do not have the luxury of pricing programs at a loss, at least not without negative financial consequences. AI PAREA is the largest venture undertaken by the Appraisal Institute in its 90-year history. The payback period for this project is reasonable under financial and project management standards.”
AI also reiterated its offer to brief the ASC on AI PAREA and encouraged the ASC to approve grant funds for PAREA scholarships, writing, “to strengthen the effort, we request that the ASC direct states to give priority for the scholarships, grants, etc., to aspiring appraisers who are part of communities that have historically been underrepresented in the appraisal profession.”
The ASC has stated a goal of holding four such hearings, with appraisal methodology being a potential future area of focus.