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I was curious about what is “critical race theory”.  I didn’t understand what it was about.

The Sunday paper article – yes, I still read the morning newspaper every morning . . . seemed to summarize CRT and the oblong political football it seems to have become.  Why critical?  Why Theory? And what does this have to do with race or appraisal?

Compulsive about how anything might relate to valuation – It caused me to investigate.  (Yes, I do that for special occasions!)  We can draw a comparison if one exists.

CRT (Critical Race Theory) is about regulations, laws and institutional settings, and even history.  And how past facts, habits, and ways of doing things becomes embedded in our society or our profession.

CAT (Critical Appraisal Theory) is about regulations, laws, institutions, history, and change resistance.  Humans and appraisers tend to resist change.  It can be fearful to find something or someone upending my years of learning, experience, habit, and success; all from a codified “proven body of knowledge.”  Both are about how or why current laws and regulations, (including appraiser licensing) have not made a difference, or worse. Stats, Graphs, and Data Science 1 starts July 23

The embedded inertia.  The justification for personal righteousness at some point becomes circular.

  • Everybody does it.
  • Our clients expect it.
  • Regulations require it.

I do it.  I teach it.  I obey.  And the old ways persist, even as the world changes.

The technology.  The complete data.  The visualization tools.  The dashboards.  Flexible, customized algorithms.  Instant delivery.  Today, we have these.  When I became an “appraiser” none of these were available to me.  None.

Today, I still am required to pick comps, make adjustments, then explain why the three inbred approaches don’t agree.

In real estate, much of our theory, licensing, and regulations were established to curtail perceived abuses.  Like red lining, predatory lending, liar loans, and deed restrictions.  Worse yet we had (have?) universal obliviousness of the fact that every element of “market value” was ignored: buyers were not prudent and knowledgeable; not well informed or well advised, nor typically motivated.  They were affected by undue stimulus, there was no reasonable exposure time, and special and creative financing was the norm.  Oh yeah, and houses were bought as a way to get rich, not for personal use.  “Highest and Best Use” was ignored.  Is this a ‘profession’ built on a lie?

CAT says an appraiser must deliver an opinion, not an analytical result.  And the opinion must be worthy.  Worthy of belief.  The goal is believability, not reliability, not usefulness, and not even real value.  Price, not value.

CAT, like CRT is a look at systemic problems.  The most damaging bias in valuation (I believe) is systemic.  Our systems, laws, education reflects years, decades of learning and teaching in methods that were appropriate to the 1930s.  The systemic problems are vertically arranged from the mortgage broker to the largest regulatory arms of our government.  And the problems are horizontally arranged, through the overburdensome regulations replete at all levels.

On a personal note – modernized appraisal education runs into systemic problems.  It is easy to get the same old same old repeated historical appraisal material approved.  Modernized methods and tools run into resistance.  “We’ve never seen that before.”  “I can’t take time to analyze a graph.”  “We have to have the form.”

To get one class approved takes about 130 different forms, in 53 jurisdictions at a cost of some $7000.  It takes almost one full-time “education administrator” to handle the renewals, changing requirements, unreturned phone calls, and mystery “evaluators” to bring modernized methods to the profession, to clients, and to benefit the public good.

Systemic wheels spinning in the mud.