Acting Governor Way Signs Bill to Combat Bias in Real Estate Appraisals

NEW JERSEY — On September 9, 2024, Acting Governor Way signed into law Assembly Bill No. 2280, a significant step forward in addressing discriminatory practices within New Jersey’s real estate market. Sponsored by Assemblywoman Yvonne Lopez (D-19), Assemblywoman Verlina Reynolds-Jackson (D-15), and Assemblywoman Tennille R. McCoy (D-14), the new law aims to eliminate bias in real estate appraisals and mandates anti-bias training for licensed appraisers.

“When buying or owning a home in New Jersey, we must strive to provide our residents with fair and equal treatment,” said Acting Governor Tahesha Way. “For far too long, systems were in place that would perpetuate racial bias. With this bill, we will ensure that personal biases don’t influence appraisers."

The law explicitly prohibits real estate appraisers from considering factors such as race, gender, sexual orientation, religion, and other protected characteristics of current or prospective property owners, as well as occupants of nearby properties, when evaluating a home’s worth. This measure comes in response to growing concerns that biased appraisals have contributed to wealth disparities and housing inequalities, particularly in minority communities.

Assemblywoman Lopez, the bill’s lead sponsor, highlighted the importance of fairness in the housing market, stating, “In the aftermath of the widespread reports of discrimination in real estate appraisals, I am glad that New Jersey has taken a step in protecting consumers and ensuring equity in the home-buying process."

In addition to codifying the prohibition of discriminatory appraisal practices, the law mandates that all licensed real estate appraisers in New Jersey complete continuing education courses focused on fair housing and appraisal bias. These courses, offered by the Appraisal Qualifications Board, will ensure that appraisers across the state are trained to recognize and avoid bias in their professional evaluations.

"Mandating anti-bias training for real estate appraisals is crucial if we want to ensure fair property valuation and move toward eradicating systemic discrimination in housing,” said Assemblywoman Verlina Reynolds-Jackson. “This bill will help individuals feel empowered and safeguarded when getting a real estate appraisal because they will know that the evaluation will be based on facts and data, not on biases or prejudices.”

The law will take effect 180 days from its signing, giving time for the real estate appraisal industry to adapt to the new regulations. The implementation of this law represents New Jersey’s commitment to eradicating discrimination in housing and ensuring that property values are assessed based solely on objective criteria.

"As a veteran realtor, I know firsthand that this bill is a significant victory for New Jersey residents looking to sell their homes, commercial properties or businesses. It ensures they receive fair appraisals that are free from bias related to race, religion, or any other protected characteristic," said Assemblywoman Tennille McCoy. "By addressing bias through continuous education and prohibiting discriminatory practices in property appraisals, we are making strides in our ongoing battle against discrimination in property appraisals, sales, and transactions."

This legislation comes amid growing national attention on housing equity and the role of real estate appraisals in perpetuating racial wealth gaps. New Jersey is among the first states to tackle this issue comprehensively through legislative action.