As Martin Luther King Jr. Day, a national day of service, approaches, it’s important to remember the legacy set forth by Dr. King and renew this country’s commitment to making homeownership more inclusionary and ensuring all people have access to the benefits of a safe and affordable place to live.
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It may sound odd to call upon the federal government to right a historic wrong. After all, one could easily argue that it was Washington, D.C., that got us where we are today with housing bias and segregation.
You see, the Federal Housing Administration (FHA) was formed in the shadows of the Great Depression to help save struggling mortgage holders from losing their homes. But the agency’s regulation of interest rates and mortgage terms only applied to white Americans. The FHA even put in writing rules to keep racial classes separate and endorsed the inclusion of restrictive covenants that essentially enforced the segregation.
While many organizations spent years calling for change in how mortgages were offered, it wasn’t until an individual, Martin Luther King Jr. – a non-violent man of God – helped cast enough light on a dark issue in American history that led to revision. It was a week after King’s assassination in 1968 that President Lyndon Johnson signed into law the Fair Housing Act, which made it illegal to discriminate in residential sales and leasing based on race or color (among other classes).
Another 4 years passed before the Justice Department affirmed “steering” to be illegal under the same housing act. (Steering is where buyers are channeled – usually by real estate agents or mortgage lenders – either toward or away from neighborhoods based on race, religion or other classes protected under the law.) Washington state passed its own law in 1968 to invalidate race-based covenants even though they can still be found on many deeds.
Some of the numbers today are embarrassing. The National Association of Realtors® (NAR) – which embarked on a “Not in Our House” anti-discrimination campaign in 2020 – surveyed 8,212 households that purchased a home in the 12-month span ending last June, and only 7% of buyers characterized themselves as Hispanic and 5% said they were African-American (83% were white). There is a 31-percentage-point difference between white and black homeownership rates in America (73% to 42%, according to the U.S. Census Bureau) – and the gap has widened since the Great Recession (2010). Black and Hispanic families are twice as likely to rent as white families.
The truth of the matter is bias – even if subtle – and financial challenges in purchasing a home continue to affect many, and actions to repair this pattern must begin with our national leaders (despite the FHA’s abhorrent regulations at its start). The government has the power and resources to drive change and address the harm this country has laid against communities of color – especially in housing opportunity.
There is reason for hope. The $1.4 trillion federal spending bill to fund the government through September reportedly contains items of importance for people of color, including:
- An increase in fair housing funding;
- Expansion and improvement of the Low-Income Housing Tax Credit.
During his campaign, President-elect Joseph Biden proposed a series of actions that could help more first-time buyers achieve the American dream of homeownership. The actions range from providing down payment and credit assistance, boosting the supply of affordably priced homes on the market, and holding financial institutions accountable for discriminatory practices in housing.
More can be done to balance the housing-opportunity playing field. Programs such as Section 8 Housing Choice vouchers as well as Home and Community Development Block Grant programs have shown their success. (We touched on this last September in a blog post on expanding affordable housing.) Mayors across the country have argued these programs – if available – remain underfunded.
Too many people of color are being denied access to resources that can improve their chances to get on the property ladder and improve their futures. NAR and John L. Scott Real Estate are working together with state and federal lawmakers to make fair housing truly fair, including removing language in deeds that still – to this day – have racial covenants.
“We hope 2021 brings healing and peace, as well as an enhanced focus on diversity, equity and inclusion,” said John L. Scott Real Estate CEO Lennox Scott.
We will keep an eye out for updates and share them on this blog and my Facebook page.
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The King County Recorder’s Office has step-by-step instructions for preparing and recording a “Restrictive Covenant Modification Document” and online forms for both individuals and non-individuals. There is no charge to submit and record the document but there may be a fee to have the form notarized. Recording a modification document will not delete the historic record, but it provides notice in the land title records that the racially restrictive covenant is void and unenforceable.
Learn more about Seattle’s history of housing segregation, including restricted neighborhood maps, racial covenants and a narrated slideshow from the University of Washington’s Civil Rights and Labor History Project.