Racially Restrictive Covenant

What Is a Racially Restrictive Covenant?

A racially restrictive covenant is a clause in a property deed, or in an agreement among neighboring owners, that forbade selling or renting a home to people of a particular race. Some covenants also targeted religious and ethnic groups. The covenants at issue in Shelley v. Kraemer barred Black buyers. The Supreme Court noted that similar agreements had also been directed against Native Americans, Jews, and people of Chinese, Japanese, Mexican, Hawaiian, Puerto Rican, and Filipino descent, among others.

Because a covenant “runs with the land,” it was meant to bind every future owner, not just the original buyer.

How Racially Restrictive Covenants Worked

Covenants became increasingly common in the 1920s. At the time, private agreements were treated as outside the reach of constitutional protections. In Corrigan v. Buckley (1926), the Supreme Court dismissed a challenge to one such covenant in Washington, D.C. It reasoned that the constitutional amendments at issue limit government action, not private contracts. Neighbors could sue to block a sale or to remove a family that had moved in.

The federal government reinforced the practice. According to Federal Reserve History, the Federal Housing Administration’s 1938 Underwriting Manual treated racial integration as a lending risk. It recommended covenants limiting occupancy to “the race for which they are intended.”

The legal tide turned in stages:

• 1948: Shelley v. Kraemer held that judicial enforcement of racial covenants violates the Fourteenth Amendment’s equal protection guarantee.
• 1968: The Fair Housing Act outlawed racial discrimination in the sale and rental of housing. That includes any notice or statement indicating a racial preference.

The words did not disappear, though. Many deeds recorded decades ago still contain them. They cannot be enforced, but they remain in the public record. Some states have created ways to remove them. Minnesota declares such provisions void and lets an owner record a statutory form, at no cost, that discharges the covenant from the title. Washington lets an owner ask a court to strike the provision from the public record or record a modification document that strikes it.

Racially Restrictive Covenants vs. Redlining

The two practices worked together but differed in who acted. Covenants were private contracts among owners and developers. Redlining was the practice of lenders and government agencies rating neighborhoods by race and denying or limiting credit in some of them. Together they shaped where families of color could buy homes and build wealth for much of the 20th century.

In affordable housing today, a “deed restriction” usually means a lawful tool that keeps a home affordable to income-qualified buyers or renters. It uses the same legal mechanism for a very different purpose.

For the broader history, see redlining, segregation, and fair housing.