One suggested solution to the problem of undervaluation in formerly redlined communities, as suggested by Doug Potts and WithAction LLC, is:

• A. A lending program that uses competitive restorative value
• B. Increasing appraisers' fees
• C. Use only the cost approach
• D. Limit appraisal scope

Answer: (A)

The main idea being tested is how to counter undervaluation in formerly redlined communities by creating financing that actively supports recovery and fair value. The best choice describes a lending program that uses competitive restorative value, which means designing loan terms and incentives that recognize the historical disinvestment in these areas and aim to spur investment and neighborhood improvement. By offering favorable rates, down payment assistance, or other supports, such a program makes financing more accessible and encourages investments that can lift property values toward their true potential. This approach also helps align incentives so that appraisers and lenders consider broader value in the community, not just narrow market comps that may undervalue properties in these neighborhoods.

Increasing appraisers' fees would not address the bias itself and could worsen affordability, while using only the cost approach ignores how market demand and potential community uplift contribute to value. Limiting appraisal scope can suppress necessary context and metrics, preventing a fair assessment.