Issues of housing, homelessness, wealth, technology, and appraisal — these may seem unrelated, yet they are.  Public policy, albeit well-intentioned, has established a complex, convoluted, expensive, and confounding construct — a contraption that subtly affects every citizen (and non-citizen) who lives, eats, and works in our society.  Yes – appraisal is important.  Can it be repaired – or even built beneficial?

Appraisal is, or should be, the measuring stick of public policy, fairness, and happiness.  Instead, it has turned into a crude target.  A target of the very stakeholders it was intended to protect.

We note here that housing is a fundamental human need – not a luxury.  The need for shelter is equal to food, water, warmth, sleep, and body balance.

Instead of valuation being a valid tool for progress and success, it has turned into a knob to be argued, turned, and twisted.  Instead of a visual gauge for better public trust, it has become yet another weapon of personal and partisan scuffle.

It is our hope here to continue the series on “intelligence valuation,” and its role in the larger real target:  human safety, productivity, and happiness.  And also “intelligence” in the real issues of human and political importance.  Base principles of what our society, our culture, and our intent should be.

Little can be changed until it can be measured.

Today we have the means, the technology, and the reusable models.  Do we have the intent?

Intelligence appraisal matters.  Intelligence appraisal measures.  It is more than just “making a loan.”  More than getting the commission.  More than bonusing the bonus.

Every institution will resist change.  We have written of the “five frictions” preventing beneficial change.  The five frictions comprise appraisal:  process, education, expectation, regulation, and standards.  Each of these acts in concert to stop change, even where universal agreement exists as to the issues.

Only one of these five forces have potential to initiate and implement real change:

Process is embedded in multiple systems, appraisers’ habits, user systems, and the government-sponsored institutions:  FannieMae and FreddieMac.

Education is stifled by school profitability.  New material takes effort, fees, and faces a 50-state “approval” process.  “Recognized” legacy education persists, in new-appraiser licensing and testing.

Expectation is embedded in user (client) systems and requirements.  (Appraisers scope-of-work must meet the expectations of intended users.)

Regulations are by state administrative law, sometimes just via reference to publications of the non-profit Appraisal Foundation.  The multiplicity and diversity of competence, budget, and even conflicts of interest, cause inconsistency — even in the face of habit, education, and expectation.

Standards embed the above process, education, and expectation into a circular “proof” of acceptability.  My recent review of  “Standard 1,” is that there has been only one word changed in some seven years.

On the other hand, the recent (Appraisal Foundation) Advisory Opinion 41, regarding technology in appraisal, is some 13 pages long.  This “advisory” rehashes parts of that same Standard 1, as well as the “integrity” rules:  Ethics; Record Keeping; Competency; Scope of Work; and Jurisdictional Exception.

Public Policy may be the only real hope we have to face issues of trust for consumers, taxpayers, and social justice – if we enable enlightened data science, intelligence appraisal, and information integrity.

We will engage this greater topic.  We face “first principles” rather than personal beliefs.  Thank you.

We will seek to seek, identify, and build on these first principles to recovery of housing and real estate.