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‘Covenant Homeownership’ Bill Takes Effect, Racial Covenant Research Continues

By Bill Thorness

This month, a new law takes effect that could begin to help right the wrongs created by covenants on real estate deeds that restricted home purchases due to race.

At a public PNA meeting this spring, attendees learned how a UW research program seeks and helps remove racial restrictive covenants from homeowner deeds. At the same meeting, a bill making its way through the Washington State Legislature was discussed that would aid new homeowners whose families might have been impacted by such covenants.

The bill, passed by the Legislature and signed by Gov. Jay Inslee, takes effect on July 23.

The UW research project has received funding to continue for another year, which provides opportunities for members of the public to help. The PNA Diversity, Equity, Inclusion and Belonging Committee wanted to update the community on these developments.

House Bill 1474 will provide down payment and closing cost assistance to first-time homebuyers who had been excluded from homeownership due to a racially restrictive covenant, or descendants of people who had faced that restriction. Applicants need to have a household income at or below 100 percent of the area median income and be a current Washington resident.

The program will be funded by a $100 assessment on real estate transactions, beginning next January. The program will be studied and its effectiveness reported back to the Legislature.

Real estate covenants discriminating on the basis of race, color, religion, or national origin were outlawed by the federal Fair Housing Act in 1968, and made void by a Washington state law the following year. The language in those covenants, however, still appears in many real estate deeds, which is the reason for the UW research project, led by Professor James M. Gregory, who teaches history at UW.

“These covenants had a decisive impact on property rights and continue to affect rates of homeownership and wealth today,” commented Gregory in a Washington Post op-ed following the bill’s passage. Homeownership is often cited as the prime source of intergenerational wealth, a family’s asset that can be passed down to the next generation.

“This pioneering legislation aims to help some of those harmed by racially restrictive covenants (and their descendants) to buy homes,” Gregory wrote. “Legislators carefully crafted the new law to navigate the complicated issues facing reparations and race-based programs, potentially providing a road map for other states and localities.”

The law’s provisions will offer limited assistance for people trying to buy real estate in the hot Seattle market, however, commented Mack McCoy, Realtor with Lake & Co. at the PNA’s public meeting. “It’s going to help a few people,” he said. “Not in Seattle proper, because it only applies to people making the area median. That supports a loan of maybe $400,000-425,000.” In our market, that level of help could be applied mainly to a co-op or a one-bedroom condominium purchase, he said. But the statewide law could offer a greater effect elsewhere.

Meanwhile, to discover where those racially restrictive covenants existed, Gregory’s program at the UW continues. This public project, fueled by volunteer help (which could be you, if you have time and basic computer skills), seeks out racially restrictive language in real-estate deeds. According to project researcher Sam Cutts, who presented at the PNA’s public meeting, the work is done by accessing the deeds in online databases or in paper records, and then recording deeds with such language into the UW’s web-based database. The project has uncovered racially restrictive covenants in more than 50,000 deeds in Washington. Similar programs are underway in a dozen other cities around the U.S.

Read more about the Racial Restrictive Covenants Project — Washington State, see preliminary results and learn how you can help.