Mapping Segregation Project

Racial restrictive covenants are private contractual agreements that prohibit the sale, rent, lease, or occupation of property to particular groups of people. These covenants are found in the land (deed) records. In the first half of the twentieth century, real estate developers, neighborhood associations, and property owners used racial restrictive covenants to create racially homogeneous white neighborhoods and prohibit homeownership and occupancy by nonwhites with the belief that this would maintain or bolster residential property values and provide long-term profitability. Racial restrictive covenants found in Montgomery County land records listed the following groups as excluded: Asian, Armenian, Black, Chinese, Greek, Indian, Japanese, Jewish, Mongolian, Persian, Syrian, Turkish, and non-caucasian. These types of covenants became especially common for a variety of reasons including the outlawing of race-based municipal zoning, rising racial and racial/ethnic tensions in fast-growing cities, and the acceptance of marketing efforts by white property owners that neighborhood stability required racial exclusivity. In 1928, the United States Supreme Court’s ruling in Corrigan v. Buckley confirmed the legality of the practice which furthered its popularity throughout the nation. An entire generation of Black Americans and other racial, ethnic, and religious minorities suffered from these discriminatory practices before the United States Supreme Court deemed racial covenants to be unenforceable by the state in Shelley v. Kramer in 1948. Private citizens, however, were still permitted to include these covenants in deeds until the Fair Housing Act outlawed them altogether in 1968.

There are two types of racial restrictive covenants. In the first type, real estate developers and builders proactively incorporated covenants in subdivisions before the sale or occupation of the lots. Racial restrictive covenants were written into each individual conveyance or established over entire sections of subdivisions as part of Declarations of Covenants. In the second type, private homeowners and community associations reactively coordinated to set up racial restrictive covenants in existing neighborhoods to ensure the neighborhood’s racial homogeneity over time.

Redlining refers to discrimination that bases lending decisions on the location of a property and characteristics of the property and its owner. Typically, redlining refers to the practice of lenders refusing loans to Black communities and areas with perceived risks. The term originated from mapmakers who scored neighborhoods based on not only the physical conditions of its housing, but also the class, race, and ethnicity of the people. Concentrations of African Americans and other nonwhite residents, as well as signs of declining white majorities, contributed to lower ratings for neighborhoods. Mapmakers shaded or outlined these neighborhoods red to indicate where loans should be limited or denied. Federal government programs legitimized and reaffirmed this practice established by realtors, developers, etc. who sought to influence local and state affairs.

While historians’ initial research suggested that redlining originated with the federal government’s New Deal programs (such as the Home Owners’ Loan Corporation and the Federal Housing Administration), new scholarship suggests that such practices predated the creation of these agencies and the government’s redlining maps, and that redlining during the New Deal reinforced existing patterns of segregation. Nevertheless, federal recognition and acceptance of longstanding racialized practices in the real estate industry perpetuated and further disseminated the myth that people of color depreciated property values.

On June 13, 1933, President Roosevelt signed the Home Owners’ Loan Act to save the besieged real estate market during the Great Depression. The law established the Home Owners’ Loan Corporation (HOLC). The HOLC’s mission consisted of two phases. During the first phase (1933-1936), the organization focused on acquiring distressed residential mortgages from lenders and refinancing them with easier terms to free capital for reinvestment. The government acquired existing mortgages as lenders turned over their holdings for government bonds as this guaranteed a return on their investment. The agency (which stopped receiving new applications in June 1935) provided one million loans and held more than 20 percent of all mortgages on nonfarm dwellings. Recent scholarship demonstrated that the agency provided loans to different racial and ethnic groups proportional to their levels of homeownership. Race, however, clearly played a role as the agency identified the racial makeup of applicant’s neighborhoods and constrained opportunities within the existing pattern of segregation. Furthermore, the recapitalization of lenders further benefited white creditors who held the majority of mortgages on Black-owned homes.

The HOLC managed, sold, and eventually liquidated its real estate holdings (which it acquired through defaults) in its second phase (1935-1951).  It was during this time that the agency created its notorious redlining maps as it sought to collect data to protect the country’s mortgage industry. The Mortgagee Rehabilitation Division conducted surveys of over 200 cities that identified nonwhite and other neighborhoods considered to have poor investment potential. Although the HOLC maps reveal strikingly racist language and criteria used to classify neighborhoods, they were less instrumental in creating patterns of residential segregation than previously thought. This is because the HOLC had already made 90% of its loans prior to the creation of their maps. The division created the maps to understand the risks of the agency’s mortgage portfolio and guide the resale of defaulted properties. Thus, rather than creating housing segregation, the HOLC program appears to have further entrenched existing patterns of housing discrimination by keeping people in their already-segregated neighborhoods and by stabilizing the mostly white banking and finance industry. New scholarship contends that the HOLC limited distribution of its maps to the public and that the Federal Housing Administration (FHA) bore greater responsibility on federal-sponsored redlining that limited the ability of Black homeowners to accumulate wealth through housing. Both agencies, however, helped codify and expand practices of segregation.

The Mapping Inequality Project: Redlining in New Deal America has digitized all remaining HOLC maps. However, a map for Washington, D.C. and its surrounding municipalities has never been found.

President Roosevelt signed the National Housing Act, which established the Federal Housing Administration (FHA), in 1934. THE FHA had two central policy goals: 1) create an economically sound, publicly-sponsored, system of mortgage insurance; and 2) revive the depressed residential construction industry that collapsed during the Great Depression. While the Home Owners’ Loan Corporation (HOLC) lending program focused on refinancing, the FHA’s provided insurance for loans for new home construction.

The FHA had a profound impact on the nationwide exacerbation of residential racial segregation as it overwhelmingly insured loans for new construction in mostly white suburban communities. The FHA developed a risk-rating system that influenced private lenders and produced widely disseminated instructions for appraising neighborhood risk through its Underwriting Manual. Lenders adopted FHA’s guidelines to secure FHA insurance which protected against potential loss and principally guaranteed resale of the loan on the secondary mortgage market. The FHA perceived neighborhood change, specifically racial transitions, as a cause for diminished property values. The Underwriting Manual (1938) stated the following:

Areas surrounding a location are investigated to determine whether incompatible racial and social groups are present, for the purpose of making a prediction regarding the probability of the location being invaded by such groups. If a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes. A change in social or racial occupancy generally contributes to instability and a decline in values.

The Underwriting Manual also advocated for including and enforcing deed restrictions at the time of sale as an effective way of preventing a house’s—and eventually a neighborhood’s—value from declining due to a change in its racial composition. These discriminatory views were not new to the real estate industry, but had never been applied or endorsed by the federal government as no previous federal mortgage programs existed.

The FHA conducted surveys and produced their own series of evaluation maps. Between 1937 and 1942, the agency created Housing Market Analyses for select cities including the District of Columbia. The Mapping Segregation in Washington, D.C. project has geo-referenced the Residential Sub-Areas map that includes sections of Montgomery County bordering the city. The area descriptions that accompany the map explain the gradation system and utilize race as a primary component for investment security.

Several communities have undertaken efforts to document historical discriminatory practices. Of the seven profiled below, Mapping Segregation DC and Segregated Seattle are the most thorough and applicable to Montgomery County’s current efforts. Restricted covenants factor prominently in both projects, and both also include related historical information.

Mapping Inequality

Mapping Segregation DC

Mapping Prejudice

Renewing Inequality

Mapping Albermarle County and Charlottesville

Redlining Louisville

Segregated Seattle

Fishback, Price V., et al. “New Evidence of Redlining by Federal Housing Programs in the 1930s.” NBER Working Paper No. 29244 (September 2021).

Glotzer, Paige. How the Suburbs were Segregated: Developers and the Business of Exclusionary Housing, 1890-1960. New York: Columbia University Press, 2020.

Gotham, Kevin Fox. “Urban Space, Restrictive Covenants and the Origins of Racial Residential Segregation in a US City, 1900-1950.” International Journal of Urban and Regional Research 24, no. 3 (September 2000): 616-633.

Hillier, Amy E. “Redlining and the Home Owners’ Loan Corporation.” Journal of Urban History 29, no. 4 (May 2003): 394-420.

Jackson, Kenneth. Crabgrass Frontier: The Suburbanization of the United States. New York: Oxford University Press, 1985.

Jones-Correa, Michael. “The Origins and Diffusion of Racial Restrictive Covenants.” Political Science Quarterly 115, no. 4 (Winter 2000-2001): 541-568.

Light, Jennifer S. “Nationality and Neighborhood Risk at the Origins of FHA Underwriting.” Journal of Urban History 36 (September 2010): 634-671.

Michney, Todd and LaDale Winling. “New Perspectives on New Deal Housing Policy: Explicating and Mapping HOLC Loans to African Americans.” Journal of Urban History 46 (1): 150-180.

Rothstein, Richard. The Color of Law: A Forgotten History of How our Government Segregated America. New York: W.W. Norton, 2017.