A Legacy of Segregation in American Housing
Racially restrictive covenants were legal clauses embedded in property deeds across the United States, primarily from the early to mid-20th century, that prohibited the sale, rental, or occupancy of property to specific racial groups, most often African Americans, but also targeting other minorities such as Asian Americans, Jewish Americans, and Native Americans. These covenants were a cornerstone of systemic racism in housing, shaping segregated neighborhoods and perpetuating racial and economic inequality. Though outlawed by the late 1960s, their legacy continues to influence housing patterns and wealth disparities today. Racially restrictive covenants emerged in the late 19th and early 20th centuries as a response to increasing racial diversity in urban areas, driven by events like the Great Migration, when millions of African Americans moved from the rural South to northern and western cities. White homeowners, real estate developers, and neighborhood associations used these covenants to maintain racial homogeneity in neighborhoods, often under the guise of protecting property values. The underlying assumption was that the presence of non-white residents would lower property values, a belief rooted in racial prejudice rather than evidence.
These covenants were typically written into property deeds by developers or added through agreements among homeowners. A common example might read: “No person of any race other than the Caucasian race shall use or occupy said property.” Such language was explicit, legally binding, and enforceable in courts until the U.S. Supreme Court intervened. Racially restrictive covenants gained traction because they were upheld by the legal system. In 1926, the U.S. Supreme Court’s decision in Corrigan v. Buckley affirmed their legality, ruling that private agreements restricting property use did not violate the Constitution. This decision emboldened developers and homeowners’ associations to implement covenants widely, particularly in rapidly growing suburbs. Real estate boards, local governments, and even federal agencies indirectly supported these covenants. The Home Owners’ Loan Corporation (HOLC) and the Federal Housing Administration (FHA), established in the 1930s, contributed to segregation through practices like redlining, which complemented covenants by marking neighborhoods with non-white residents as high-risk for mortgage lending. The FHA’s underwriting manuals explicitly recommended restrictive covenants to maintain “neighborhood stability” until the 1940s.
Enforcement was rigorous. If a homeowner violated a covenant by selling or renting to a prohibited group, neighbors or associations could sue to block the transaction or evict the occupant. Courts often upheld these suits, reinforcing racial segregation. In some cases, covenants were enforced through intimidation or violence, particularly in areas where Black families attempted to move into white neighborhoods. The widespread use of racially restrictive covenants had profound effects on American cities. They created racially segregated neighborhoods, concentrating African Americans and other minorities in underfunded, overcrowded areas while preserving white neighborhoods with better access to schools, parks, and economic opportunities. This segregation entrenched wealth disparities, as property values in white neighborhoods appreciated, while those in restricted areas stagnated or declined due to disinvestment.
Covenants also limited economic mobility for Black families. Excluded from homeownership in appreciating neighborhoods, many were forced into renting or purchasing in less desirable areas, often at inflated prices. This contributed to the racial wealth gap, as homeownership is a primary means of building generational wealth in the United States. The tide began to turn in the mid-20th century as civil rights activists and legal advocates challenged the enforceability of restrictive covenants. The NAACP played a pivotal role, bringing cases to court to expose their discriminatory impact. The landmark case was Shelley v. Kraemer (1948), in which the U.S. Supreme Court ruled that while private covenants were not unconstitutional, state enforcement of them through courts violated the Equal Protection Clause of the 14th Amendment. This decision rendered covenants unenforceable, though they remained on many deeds.
Despite Shelley v. Kraemer, covenants persisted in practice through private agreements and other discriminatory tactics, such as real estate agents refusing to show homes to Black buyers. It wasn’t until the Fair Housing Act of 1968, passed in the wake of Martin Luther King Jr.’s assassination, that racially restrictive covenants were fully outlawed, along with other forms of housing discrimination. Though legally void, racially restrictive covenants left a lasting imprint on American cities. Many neighborhoods remain racially segregated due to the patterns they established. The wealth gap persists, with studies showing that the median wealth of white families in 2022 was nearly eight times that of Black families, partly due to disparities in homeownership and property appreciation.
Efforts to address this legacy are ongoing. Some states and localities have passed laws to simplify the removal of outdated covenants from property records, though these remain symbolic since the clauses are already unenforceable. Community organizations and historians, like the Mapping Prejudice project, have worked to document the extent of covenants, revealing their role in shaping modern cities. For example, research in Minneapolis and Seattle has shown how covenants concentrated Black residents in specific neighborhoods, influencing school districts and economic opportunities. Racially restrictive covenants were a powerful tool of systemic racism, embedding segregation into the fabric of American neighborhoods. While the civil rights movement dismantled their legal power, its effects linger in persistent racial and economic disparities. Understanding this history is crucial for addressing ongoing inequities in housing and wealth, as communities strive to create a more equitable future. Efforts to confront this legacy—through policy, education, and reparative measures—remain vital to dismantling the structures of inequality built over decades.