Are we paying too much attention to restrictive covenants?

Relying on racial deed clauses of the past to direct where we focus today's efforts to redress segregation may be steering us wrong.

In a previous post, I explained why civil rights activists can miss important targets of reform if they rely too much on redlining maps, drawn in the 1930s by a federal agency, the Home Owners Loan Corporation. These maps not only suggested to government officials, but also to private banks, insurance companies, and real estate agencies, which neighborhoods should be denied conventional mortgages and other housing opportunities.

Now, I’ll turn to the other visually striking evidence of segregation’s origins - property deed language prohibiting sale or rental to any but members of the “Caucasian race” (with a usual exception for domestic servants). Usually termed “restrictive covenants,” the language was deemed legal and enforceable in 1926 by the Supreme Court. It ruled that if a white homeowner were to sell or rent a home with such a deed to an African American, neighbors could go to court to have the black occupant evicted. There were hundreds of such evictions during the next two decades, and thousands more black families did not attempt to move to white neighborhoods where the covenants existed.

Excerpted from the 1930 deed of a Charlottesville, VA subdivision

Then in 1948 the Supreme Court reversed itself (in Just Action we have a lot to say about the Supreme Court’s role; for a copy of the book, go here) and prohibited courts from ordering such evictions. Some states continued to permit nearby homeowners to sue white sellers for prohibitively high damages, even if those neighbors could not obtain eviction orders, but in 1953 the Supreme Court banned those tactics as well. Though unenforceable, the Court never deemed the covenants themselves to be illegal (although some lower courts did eventually prohibit new ones from being recorded).

The Minneapolis suburb where George Floyd lived, St. Louis Park, is blanketed with such deeds and African Americans remain underrepresented in the neighborhoods where the covenants are found and from which federal agencies and the real estate industry excluded non-whites. The St. Louis Park government has called attention to its segregated history and sponsored a program that permits homeowners to renounce their restrictive covenants. Eliminating symbols, however, does not create housing opportunities. These areas should be opened to include black households. The city has enacted a loan program that subsidizes down payments for homebuyers who are in the first generation of their families to own a home. The interest rate is zero, and the loan is forgiven after the owner remains in the house for 20 years. Because the African American homeownership rate is only half the white one, black households are over-represented in the eligible population. Yet few succeed in taking advantage of the assistance because even with subsidized down payments, single family homes in St. Louis Park are still too expensive for most eligible African American families. They were not too costly when black families were excluded from the city, so down payment assistance itself is not an adequate remedy.

There are many suburbs, demographically similar to St. Louis Park, without restrictive covenants. The real estate industry and federal agencies were quite capable of creating and maintaining all-white neighborhoods without such deed language.

After 1948, and certainly after 1953, few developers continued to place such unenforceable clauses in subdivision deeds. Even without them, realtors, banks, insurance companies and the federal government made sure that new communities banned African Americans. Suburbanization of the country mostly took place after 1948. For a home built during in the 1950s and ’60s, the existence of a covenant would not be a reliable guide to whether African Americans were permitted to occupy it.

As The Color of Law describes, until at least 1962 the federal government continued to enforce segregation by financing developers who were committed to refuse sales to African Americans. In that year, President John F. Kennedy issued an executive order prohibiting federal agencies from requiring segregation. It was not well-enforced. The FHA and VA continued to insure homes that were sold by realtors who refused to market to non-whites. When these federal agencies foreclosed on properties, they employed racially discriminatory real estate agencies to re-sell them. To forbid such practices, the government would have had to require non-discrimination practices by its realtors; it did not impose that mandate.

In 1968, the Fair Housing Act prohibited discrimination by realtors and others in the private sector. Just Action describes how that prohibition has been honored as much in the breach as in the observance. State agencies have failed to require a serious commitment to non-discrimination in real estate licensing policies. They even fail to ensure that the courses real estate brokers and agents must take to obtain and retain their licenses have strong non-discrimination instruction.

In short, whether a house is covered by a restrictive covenant is a useful educational tool, but the absence of such deed language is a poor guide for determining whether the property was built for whites only.

---