Covenants were used as a tool of segregation by private and public institutions alike. Beginning in 1927, the national realtor trade association propagated a model covenant throughout the country. The Federal Housing Administration relied upon the covenants in providing mortgage insurance until 1962.
Locally, two Pennsylvania lower court cases appear to have been ahead of the movement toward eliminating racial covenants. In 1928, an Erie County court ruled that a covenant prohibiting the sale, lease, or conveyance (transfer) of a property to persons of certain racial and ethnic groups was void. And in 1946, two years prior to Shelley v. Kraemer, a Delaware County court ruled that racial restrictions on both sales and occupancy were invalid. Future research will help us understand the extent to which these court cases slowed the spread of racial covenants in Pennsylvania.
Noteworthy Historical Events
Baltimore passed the nation's first racial zoning ordinance. The ordinance prohibited Black individuals from buying homes on majority White blocks and vice versa. The ordinance was created in response to middle class Black families moving out of crowded, predominantly Black neighborhoods into more affluent, less crowded White neighborhoods.
In Buchanan v. Warley, 245 U.S. 60 (1917), the Supreme Court ruled that municipally mandated racial zoning was unconstitutional, not because it was a violation of Black Americans' constitutional rights, but because racial zoning ordinances inhibited the rights of property owners. Despite the Court’s ruling, cities including Atlanta, Austin, Birmingham, Richmond, and West Palm Beach continued to adopt and enforce racial zoning ordinances.
In Corrigan v. Buckley, 271 U.S. 323 (1926), the Supreme Court found that a racially-restrictive covenant in Washington, D.C. was a legally-binding document that made the selling of a house to a Black family a void contract.
In conjunction with the U.S. Department of Commerce, the National Association of Real Estate Boards (NAREB) drafted a model racial covenant. Restrictions based on the NAREB model were inserted into deeds across the country. NAREB also encouraged local real estate boards to partner with homeowner associations to spread the model covenant.
"No part of said premises shall in any manner be used or occupied directly or indirectly by any negro or negroes, provided that this restriction shall not prevent the occupation, during the period of their employment, of janitors' or chauffeurs' quarters in the basement or in a barn or garage in the rear, or of servants' quarters by negro janitors, chauffeurs or house servants, respectively, actually employed as such for service in and about the premises by the rightful owner or occupant of said premises."
"No part of said premises shall be sold, given, conveyed or leased to any negro or negroes, and no permission or license to use or occupy any part thereof shall be given to any negro except house servants or janitors or chauffeurs employed thereon as aforesaid."
In Harmon v. Tyler, 273 U.S. 668 (1927), the Supreme Court again ruled that a race-based residential segregation ordinance in New Orleans, Louisiana violated the Fourteenth Amendment, relying on the authority of Buchanan v. Warley.
In Ellsworth et al. v. Stewart, 9 Erie Co. Law Journal 305 (1928), Pennsylvania's Erie County Court found that a covenant prohibiting the sale, lease or conveyance of an Erie County property to "any person of Polish, Italian, Austrian, Russian, Hungarian, Slavish or Negro descent," was void.
In Yoshida v. Gelbert Improvement Co., 58 Pa. D. & C. 321 (1946), Pennsylvania's Delaware County Court of Common Pleas ruled that racial restrictions on both sales and occupancy were as invalid as restraints upon alienation (transfer of ownership rights).
In Shelley v. Kraemer, 334 U.S. 1 (1948), the United States Supreme Court strikes down racially restrictive housing covenants. In a majority opinion, the Court held that the 14th Amendment's Equal Protection Clause prohibits racially restrictive housing covenants from being enforced.
The U.S. Solicitor General intervened to prevent the Federal Housing Administration (FHA) from continuing its practice of using racial covenants as a precondition for mortgage insurance.
The FHA continued to finance racially exclusive subdivision developments until 1962, when President Kennedy issued an executive order prohibiting the use of federal funds to support racial discrimination in housing.
President Lyndon Johnson signed the Civil Rights Act of 1968, which expanded on previous acts and prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status. Title VIII of the Act is also known as the Fair Housing Act (of 1968).
NOTE: The views expressed here do not necessarily reflect the
views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.