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STATE LICENSING BUREAU DOUBLES-DOWN ON RACE-BASED SPOILS SYSTEM
VENTURA, Calif. (Feb. 28, 2025) – The idea that an American would need to seek his state’s permission to form an opinion about the value of something is preposterous in a free-market economy. But when it comes to forming an opinion about the value of real estate, appraiser licensing has been on the books in all 50 states since the early ‘90s.
In the Golden State, to opinionate on land value for a living requires, in most cases, a Californian to get a college education, then complete 150 classroom hours of specialized education, complete a 2,000-hour field apprenticeship, pass a state exam and pay hundreds of dollars to the state to obtain a license. Apprentices tend to work for a fee split in return for on-the-job training. They often end up earning less than minimum wage. Understandably, few candidates are attracted to the profession in its current state.
Relief from this regulatory overreach, which conveniently helps bankroll a shady Washington, D.C., publisher and a tiny captured federal
agency, is upon us, but for the wrong reason: DEI.
A state occupational licensing
body, known as the California Bureau of Real Estate Appraisers, has approved a workaround to its onerous licensing regimen,
but one based on racial spoils.
Instead of reducing the red tape across the board, the state licensing bureau has created a two-tier qualification system: the existing tier requires the well-known 2,000-hour apprenticeship and the attendant financial sacrifices by the trainee; a new, easier track involves the candidate ponying up an additional sum of money for the privilege of sitting out the 2,000-hour apprenticeship. Instead, the candidate sits in front of a computer and participates in simulated appraisals in a 3-D graphics world that reminds some of the Mushroom Kingdom from “Super Mario” and others of Hyrule from “The Legend of Zelda.”
And where does the system of racial spoils come in?
The 14-employee nonprofit publisher, known as the Appraisal Foundation, is bankrolling over a million dollars in DEI scholarships to pay for individuals with favored traits to attend the computer simulation track.
The publisher was targeted in a shakedown last year by the U.S. Department of Housing and Urban Development and a handful of crony organizations at the direction of HUD’s then Secretary Marsha Fudge, now a Washington lobbyist.
The money is being awarded to candidates based on race, skin color, sex and/or sexual orientation rather than need or merit. The money extorted from the tiny publisher, which ended 2023 with more than $9 million in cash and publicly traded securities, will pay for candidates to attend the simulator track. One of the publisher’s sponsors, another nonprofit known as the Appraisal Institute, is dispensing the DEI money.
This makes the latter both a third-party administrator of the scholarship funds and the beneficiary of those funds, since it is the only course provider in the nation offering the simulated learning experience, called the “Practical Applications of Real Estate Appraisal.” Meanwhile, the publisher is both the donor of the funds and a beneficiary of their end use, since the publisher co-owns rights to the simulator course materials.
The whole thing is then endorsed and promoted by the California Bureau of Real Estate Appraisers, a state agency whose employees received tens of thousands of dollars in all-expense-paid travel from the nonprofit publisher. The free, undisclosed trips have been written about previously in these pages.
The scofflaw state regulator enforces continually changing versions of the nonprofit’s copyrighted industry code as binding law but without exposing each new version to a required state rulemaking, which includes safeguards like cost-benefit analyses, analyses of each new version’s impact on small businesses in the state, an analysis of the effect of each new version on housing and a statewide notice-and-comment process.
The regulator’s enforcement of the unadopted code openly violates the California Constitution’s nondelegation doctrine, the state’s Administrative Procedure Act and at least one administrative regulation designed specifically to prevent this type of open-ended delegation of governing authority to private persons or organizations.
This administrative lawbreaking is no small thing as it affects trillions in real estate values.
For its part, the tiny publisher was
described in March of last year by Rohit Chopra, then head of the U.S. Consumer Financial Protection Bureau, as a pay-to-play operation. That’s putting it mildly.
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Jeremy Bagott, a licensed appraiser and former newspaperman, sends up a warning flare in his 2019
book “Dispatches from the Cosmic Cobra Breeding Farm.” He takes the reader deep inside a tiny Washington, D.C., foundation that has managed to have its copyrighted code of conduct enshrined in federal and state law. All 50 states, even the U.S. territories of Guam and the Northern Mariana Islands, now enforce it. The nonprofit, known as the Appraisal Foundation, has parlayed the arrangement into a lucrative publishing cartel. In his journey, the author uncovers a troubling trend deep in the plumbing of government.
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