In April, Washington became the first state in the nation to pass legislation designed to compensate victims of racially restrictive housing covenants: discriminatory instruments in effect since early in the century that barred generations of Black, Asian, Latino and Indigenous families from buying or renting property in certain areas.

Two years earlier, Washington had authorized a state-wide inventory of racist property restrictions – the Racial Restrictive Covenants Project – that identified more than 50,000 such parcels and, ultimately, created the recently passed ‘harm-based’ Covenants Homeownership Act (CHA).

Funding will come from a $100 Covenant Homeownership recording fee applied to every real estate transaction in the state, which is expected to produce about $100 million in loans – approximately 2,000-4,000 loans in the $25,000-50,000 range – each year.

The act provides compensation in the form of mortgage assistance – specifically no-interest loans to be used as down payment – for families excluded from housing opportunity in the years before passage of the Fair Housing Act in 1968. Applicants must be first-time homebuyers with incomes at or below the area median and must be Washington state residents or descendants of residents who lived there before 1968.

As far back as 1910, these blatantly restrictive covenants banned those populations – and often Jews, Middle Easterners, Mexicans and anyone else not perceived to be Caucasian – from owning or living in homes in designated ‘white-only” neighborhoods in hundreds of cities and towns across the United States.

Promoted by the American Board of Realtors and widely implemented, according to the Washington Post, these legally binding covenants spawned numerous campaigns threatening litigation against developers and individual property owners who did not ‘protect’ white neighborhoods from non-white buyers or renters.

Neither the Home Owners’ Loan Corporation (HOLC) created by former president Franklin D. Roosevelt a part of his ‘New Deal’ in the early 1930s, nor the new Federal Housing Administration (FHA) launched in 1934 – both designed to ease mortgage-lending for qualified Americans – addressed or stopped the practice of ‘redlining’ to keep ‘undesirables’ out of all-white neighborhoods.         

Even after Congress finally outlawed racial discrimination with the Fair Housing Act in 1968, and in the decades since then, countless potential non-white buyers have faced social if not legal pressure to steer clear of certain neighborhoods, robbing them of the opportunity to build wealth as quickly or easily as their white counterparts have done over the years.

While nothing can undo the damage wrought by decades of housing exclusion, the CHA is an admirable advance. If successful, it may well become a model for other states to follow.

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Sources: The Washington Post, May 10, 2023
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About Bobbi Pronin
Bobbi Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

Bobbi is not an employee of Anywhere Integrated Services or affiliated with its title companies.