The Racist Roots of Home Owners Associations and Covenants
What are Home Owners Associations (HOAs)?
HOAs were created in many residential communities to “maintain a clean and cohesive atmosphere in the neighborhood”, or so they allege. In many areas in the US, when you buy a condominium, townhouse, or single-family home within “a planned development” you may encounter the HOA structure. The so-called benefits of HOAs are to spare the homeowner from some responsibilities that come with homeowner obligations, such as:
Maintaining grounds, insurance, and community utilities, as well as covering the overall finances of the building complex or community. Most HOAs will require all unit owners/home owners to pay a monthly maintenance charge and may also demand special one-time assessments to cover large community expenses.
In addition, HOAs may governing door color, limit how tall your grass can grow, whether you can plant or remove trees, which types of vehicles you can park on the street or in your driveway (bans on parking RVs are not uncommon, for example), how high fences can be, and which types of coverings you can use on street-facing windows.
On the surface, it seems that HOAs are a benefit to the community, but in reality, all of the above benefits were included along with racist language (that was specified by the US government) that has kept Black Americans from buying in certain neighborhoods to this day.
The Effects of HOAs on Black Homeownership in America
According to Jonathan Rothwell, author of “A Republic of Equals,” “There is plenty of evidence from historic records and housing policy discussions that anti-Black racism motivated some of the strategies used by homeowner associations, such as deed restrictions and covenants that explicitly discriminated against Black people by compelling other owners to avoid selling to them. HOAs perpetuate racial and economic segregation by blocking fair participation in housing markets, thus denying wealth-generating opportunities and upward mobility for many Black people and lower-income families.”
In 2020, research shows that an estimated 60% of newly built single-family homes and 80% of homes in new subdivisions are part of a homeowners association. Neighborhoods with HOAs have, on average, more white and Asian residents — as well as more wealthy residents — and fewer Black residents than non-HOA areas. Homes in HOA neighborhoods also typically sell for 4% more than similar homes outside of HOAs — a boon for homeowners, but a roadblock for many prospective buyers.
While the federal Fair Housing Act was passed in 1968, prohibiting racial discrimination in the sale and rental of homes, HOAs still find ways to exclude or discriminate against Black homeowners. A recent report found that neighborhoods with HOAs are less racially diverse, and less-regulated cities have higher HOA premiums, leading researchers to believe that residents rely on HOAs to facilitate segregation.
Rothwell stated that he believes “… HOAs are popular because they work to create and preserve privilege by excluding others. This drives up the value of properties by limiting competition and disrupting markets. People don’t necessarily seek out unfair privileges, but they are unlikely to voluntarily give them up without pressure from a stronger countervailing force.”
History of HOAs and Covenants
Racially restrictive covenants first appeared in deeds of homes in California and Massachusetts at the end of the 19th century and were then widely used throughout the U.S. in the first half of the 20th century to prohibit racial, ethnic, and religious minority groups from buying, leasing, or occupying homes. Some covenants generally barred “non-Caucasian” groups, while others would list specific races, nationalities, and even individuals with disabilities.
These covenants were frequently applied by developers before new houses were sold, often as a condition to receive a low-interest, 20-year mortgage from the Federal Housing Administration (FHA) under the New Deal, which sought to stabilize the housing market after the Great Depression. The FHA required properties to meet appraisal standards that included racial exclusivity, and it sanctioned the use of segregation practices as a way for white neighborhoods to maintain high property values.
Despite being illegal today, racially restrictive covenants unfortunately remain on many historic deeds and association governing documents because the process to remove them is difficult, time-consuming, and expensive. Without a streamlined process authorized by legislation, the amendment process can be costly and lengthy. Removing racially restrictive covenant typically requires the community to undergo an amendment process that includes engaging an attorney, following a process of notification to owners, calling a meeting, and most challenging getting a supermajority (more than 67%) of owners to participate in a vote to amend the covenant to remove the discriminatory covenant.
Sources:
An Unfortunate Legacy: A Brief History of Racially Restrictive Covenants – (caionline.org)
The Historical Memory Recovery Channel 