States grapple with racist language in real estate deeds

Some states let homeowners erase language. One state wants to erase its effects.

By: - November 19, 2023 11:11 am
In some real estate deeds, U.S. homeowners are finding language forbidding the sale of their home and land to non-whites

In some real estate deeds, U.S. homeowners are finding language forbidding the sale of their home and land to non-whites. While no longer enforceable, racist language in real estate deeds are forcing homeowners to grapple with a history of discriminatory housing policy. (Jessica Hill/The Associated Press)

Lisa Boccetti is horrified by the restrictive covenant that is in the deed to her 1950s ranch house in Raleigh, North Carolina: It states that the land cannot be sold or occupied by Black people.

The property “shall not be sold to negroes or to any person or persons of negro blood, and said premises shall not be occupied by negroes or persons of negro blood, except domestic servants and their families, employed by the occupants of the premises,” the original deed states.

She and her husband, Bob Williams, would like to remove the offensive language, which hasn’t been legally binding for more than half a century, but North Carolina doesn’t have a process to do so. In 2021, two state senators filed legislation to give homeowners a way to erase such covenants, but the bill was sent to a committee and died.

“It’s infuriating, because unless your state has a process in place through legislation to remove or repudiate the contract, there’s nothing you can do to make it go away,” Boccetti said.

In recent years, more than a dozen states have passed laws repudiating historical, racially restrictive covenants embedded in property deeds that prohibited the sale of those homes to Black residents or, depending on the community, to immigrants from certain countries such as Poland or Ireland, or to Jews or Asian Americans.

In some states, new laws now allow the historical wording to be removed altogether.

Lawmakers have touted the new laws, passed with bipartisan support, as a formal rebuke to segregationist housing policies and the symbolic closing of a dark chapter in American history. The U.S. Supreme Court declared the covenants unconstitutional in 1948; the federal Fair Housing Act of 1968 outlawed them.

Covenant clauses that prevented non-whites from buying or occupying land were a tool that enforced segregation in U.S. communities across the country in the early to mid-20th century, led to discrimination by banks and, researchers note, have lingering effects today.

“I emphasize all the time that efforts to discharge the language in these covenants needs to be the start of a conversation, not the end of a conversation,” said Michael Corey, a researcher for the Mapping Prejudice project at the University of Minnesota, which focuses on the causes of segregation in Minneapolis and St. Paul.

“We can’t erase history because it makes white people uncomfortable,” Corey said in an interview. “We have to understand how this history has disadvantaged minority populations from access to wealth building.”

Historians and researchers praise one state’s covenant law for looking to the future as well as the past: Washington state’s measure not only recognizes the harmful effects of past real estate discrimination but also seeks to rectify it, at least in part.

The law, which Democratic Gov. Jay Inslee signed in May, levies a fee of $100 on all real estate transactions to fund a so-called covenant homeownership account.

That account will provide down payments and closing cost loans to certain first-time homebuyers who were, or would have been, prevented from buying properties prior to April 11, 1968, when the Fair Housing Act became law.

The descendants of people who were or would have been harmed by the covenants also are eligible. All recipients must have incomes at or below 100% of an area’s median income, however. The fee is projected to generate between $75 million and $100 million annually, according to a legislative analysis.

Washington has yet to determine how much assistance qualifying homebuyers will receive, and under what conditions, but the new fund is supposed to begin disbursing money next July.

Upon House passage of the bill, sponsor state Rep. Jamila Taylor described it as a “focused and thoughtful” approach to help “right the wrongs of the past.”

“The deliberate and harmful barriers preventing Black homeownership impact intergenerational wealth and housing security,” Taylor, a Democrat, said in a statement on her legislative site. “Because this racial discrimination was targeted, the solution must also be targeted.”

The homeownership rate among Black, Hispanic, Asian and Indigenous people in Washington state is 49%, 19 percentage points lower than that of non-Hispanic white households, according to a state report released last year. Only 31% of Black households own their homes, the report said.

“History has taught us that it took generations of systemic, racist, and discriminatory policies and practices to get to where we are today,” the report states.

It cites restrictive covenants but also redlining, or the denial of loans to people residing in poor or minority neighborhoods. It also blames so-called blockbusting, in which real estate speculators preyed on white fears by introducing a Black family to a neighborhood, persuading fleeing white homeowners to sell at below-market rates, then reselling those homes at high prices to new Black families.

During the debate over the Washington state bill, at least one Republican argued that the $100 transaction fee would harm the first-time homebuyers and lower-income people the legislation was designed to help.

But James Gregory, a history professor at the University of Washington, said paying for compensation “is a central piece of what the model legislation would look like if states were actually trying to restore the harms of these covenants.”

“These covenants not only caused segregation, but it limited homeownership opportunities for generations of people,” Gregory said. “If you’re trying to undo those harms, you need to take measures to reopen those opportunities that were never available.”

Richard Rothstein, whose 2017 book, “The Color of Law: A Forgotten History of How Our Government Segregated America,” documented how federal, state and local policies explicitly created racially homogenous neighborhoods, told Stateline that merely removing racist covenants won’t address current housing disparities. He described the covenants as “the least important of these policies affecting systemic barriers in housing, especially after they lost enforcement power.”

But Rothstein, a fellow at the left-leaning Economic Policy Institute, praised the Washington bill as “a justifiable measure to restore harm done through those covenants.”

Washington’s law is the exception, however.

In Nevada, which enacted a law renouncing racist covenants earlier this year, sponsor Sen. Dallas Harris said she would have liked to emulate Washington state’s approach. Harris said the covenants “created systemic barriers to homeownership and capital” in her state, and that while she knew they had existed before she began pushing her bill, she didn’t realize how extensively they were used.

But Harris said a bill similar to Washington’s was a nonstarter in Nevada, which has a Republican governor.

“It was important for me to find a way to strike hurtful and harmful language, without making attempts to erase what the damage that these covenants caused,” she told Stateline. She said a law such as Washington’s is “the ultimate goal.”

“Taking action steps and providing actual compensation for the harm that’s done is good policy,” she said. “But it may be hard to do that in some states, financially or politically.”

In the Raleigh area where Lisa Boccetti and Bob Williams live, nearly 74% of white residents own their homes, while less than 46% of Black residents and about 47% of Hispanic residents are homeowners, according to census data.

Lisa Boccetti wants to remove the racist language embedded in the deed to her home, above. However, North Carolina currently doesn’t have a process to do so.
Lisa Boccetti wants to remove the racist language embedded in the deed to her home, above. However, North Carolina currently doesn’t have a process to do so. (Lisa Boccetti)

Boccetti and Williams, who are white, are voluntarily leading a project to pore through property record books and catalog racial covenants to create a searchable database for the Wake County Register of Deeds, where Raleigh is located.

Tammy Brunner, a Democrat and the register of deeds, told Stateline the project can help explain how today’s neighborhoods were shaped.

“We strongly believe that once we pull out all of the restrictive covenants, we will create a map of redlining in the county and we’ll find that the underserved communities were created by these covenants,” she said.

Boccetti hopes the effort helps to spur covenant legislation in the GOP-controlled legislature.

Discovering the restrictive covenant in her deed and the struggle to remove it “has been a learning experience,” she said.

“It’s allowed us to see the ways why our neighborhood has been shaped the way it is,” she said. “It’s something we must grapple with, even if it makes us uncomfortable.”

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