California Swings for the Fences to Strike Racially Restrictive Covenants from the Public Record

• Jurisdiction: California,United States
• Author: Lexi Purich Howard
• Publication year: 2021
• Citation: Vol. 39 No. 4

California Swings for the Fences to Strike Racially Restrictive Covenants from the Public Record

Lexi Purich Howard

Lexi Purich Howard is a real estate and business attorney in private practice in Sacramento at Murphy Austin Adams Schoenfeld LLP. Previously, Lexi was a public policy advocate with a focus on real estate and the judiciary, and additionally has two and a half decades of experience in all areas of title insurance and escrow settlement with a national title insurer. Ms. Howard may be contacted by email at lhoward@murphyaustin.com.

I. INTRODUCTION

When Nathaniel Colley and Jerlean Colley tried to purchase their first home in Sacramento in 1955, they were unable to find a real estate agent to assist them with their purchase and were unable to themselves purchase the property they chose. The Colleys were African American.¹ Though racially restrictive covenants ("RRCs") were already unconstitutional and unenforceable, the effects of segregation and discrimination continued to make impossible, or nearly so, the purchase of homes by African Americans and other non-Whites. White friends of the Colleys, Leland Anderson and Virginia Anderson, purchased an undeveloped lot for them in the South Land Park Terrace neighborhood of Sacramento² and transferred the property to the Colleys,³ who then built the home where they would live for four decades.⁴

The experience of the Colleys was not unique. Many African Americans throughout California and the United States had long been prohibited from buying a home, by circumstances both de jure and de facto.⁵ This was a direct result not only of recorded RRCs, but also other factors, such as private agreements and government programs, including federally funded home financing programs. Those programs made and underwrote loans primarily in neighborhoods that were predominantly White or that otherwise intentionally excluded African Americans, limiting not only their housing opportunities but also their future economic success.⁶

Even after other federal and state legislative and judicial decisions held RRCs to be unconstitutional and unenforceable, RRCs continued their drumbeat of exclusion, sending messages to non-White,⁷ prospective homeowners that they were not welcome in predominantly White neighborhoods. Even today, homebuyers, often while purchasing a home and sometimes long after their purchase, discover that RRCs were recorded in the chain of title of the documents for their home. RRCs can be a continuing and often painful reminder of past racial exclusion, violence, injury, and injustice.

Several states, including California, have tried over the years to identify and enact solutions for the redaction and removal of RRCs from the public record. Many RRCs are embedded in documents that include other covenants, conditions, and restrictions ("CC&Rs"). Redacting or removing RRCs requires methods to identify and extract the RRCs with surgical precision from CC&Rs that may otherwise lawfully proscribe other property uses, such as historical prohibitions on the use of the residence as a laundry, a boardinghouse, or a distillery. More modern covenants or prohibitions include parking restrictions, exterior home colors, landscaping requirements, and setbacks. Typically, CC&Rs were intended, among other purposes, to maintain consistency and uniformity for the purpose of increasing the desirability, marketability, and value of the affected property.

While scholars may debate the practical enforceability challenges of provisions in CC&Rs (not including RRCs), restrictions that do not contain racial prohibitions have

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generally been found to be enforceable. The challenge in removing RRCs from the public record is complex; while removing RRCs may be a remedy, remaining CC&Rs should be retained. Removing RRCs from the public record also requires balancing practical considerations of workload and costs with public policy questions of who should be responsible for identifying RRCs, and how to effectively accomplish the contemplated RRC removal.

Responsible policymaking requires both public policy decisions and private efforts that are sustainable, equitable, and efficient, and that recognize the harms of exclusionary RRCs, programs, and practices. Over the years, the California Legislature has enacted and modified statutory structures in attempts to modify or eliminate RRCs, with limited effects. In 2021, partly as a result of increased individual and institutional introspection and discussions about race across our country and our state, the California Legislature again took up the task of eliminating RRCs from the public record, attempting to finally answer the questions of whether RRCs can and should be entirely removed from the public record, whether RRCs should remain as a historic reminder, and if efforts to eliminate RRCs can be accomplished in ways that are effective and efficient and will serve to advance equitable solutions for California. This article will discuss California's history of RRCs, its past legislative efforts to remove RRCs from the public record, and the recently enacted process for doing so.

II. RACIALLY RESTRICTIVE COVENANTS—AN AMERICAN TRADITION

"The past is a foreign country: they do things differently there."⁸

A. Racially Restrictive Covenants Defined

RRCs are recorded documents or private agreements that "have as their purpose the exclusion of persons of designated race or color from the ownership or occupancy of real property."⁹ A typical RRC states the exclusion explicitly, though some allow an exception for servants and employees of a White owner. The goal of RRCs was to prohibit occupancy and ownership by non-Whites, either by creating enforceable covenants that ran with the land that, if violated, could result in reversionary rights and evictions, or alternatively, by creating contractual rights that, if violated, could result in injunctions and awards of money damages.

B. Examples of Racially Restrictive Covenants

The first reported RRC is thought to have been in Brookline, Massachusetts in 1843, where subdivision deeds included provisions prohibiting the sale of homes to "any Negro or native of Ireland."¹⁰ RRCs were often included in purchase and sale contracts and were recorded in the public records, most often by way of deed restrictions in individual grant deeds or by the recording of blanket CC&Rs by a housing developer, affecting entire neighborhoods.

In Sacramento County, the restriction for the Colleys' home and neighborhood provided:

No persons of any race other than the White or Caucasian race shall use or occupy any structure or any lot except that this provision shall not prevent occupancy by domestic servants of a different race domiciled with an owner or tenant.¹¹

Advertisements for developments referred to homes and neighborhoods as "restricted," "highly restricted," and as "secure investments,"¹² all of which signaled to potential buyers, real estate salespersons, and lenders that exclusionary RRCs were in place.

In Fresno, a RRC recorded in November 1947 provided:

No part of said subdivision, nor any building thereon, shall be sold, conveyed or leased by Deed or otherwise, to any Negro, Chinese, Japanese, Hindu, Armenian, Malayan, Asiatic, or Native of the Turkish Empire, or any person not of the Caucasian race, or any descendent of any one or more of said persons ... provided, however, that such person may be employed as a servant by a resident upon such property.¹³

In Los Angeles, a RRC recorded in 1944 stated that:

No part of this said real property, described therein, should ever at any time be used or occupied by any person or persons not wholly of the white or Caucasian race, and also ... that this restriction should be incorporated in all papers and transfers of lots or parcels of land hereinabove referred to; provided, however, that said restrictions should not prevent the employment by the owners or tenants of said real property of domestic servants or other employees who are not wholly of the white or Caucasian race; provided, further, however, that such employees shall be permitted to occupy said real property only when actively engaged in such

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employment. That said Agreement was agreed to be a covenant running with the land. That each provision in said Agreement was for the benefit for all the lots therein described.¹⁴

These RRCs are illustrative of the numerous RRCs that are prevalent in cities across the country. A 2019 study of deeds in the City of Philadelphia revealed nearly 4,000 RRCs in deeds from 1920 to 1932 alone.¹⁵

It is important to note that despite the pervasiveness of RRCs in the public record, not all developers and property owners used or relied upon RRCs. Joseph Eichler and Ned Eichler were father and son developers of approximately 11,000 homes in Northern and Southern California and deliberately did not use RRCs in their developments. In 1958, Joseph Eichler resigned from the National Association of Home Builders when the association refused to support a nondiscrimination policy. He was said to have offered to buy back homes if anyone was unhappy with their neighbors, saying "[i]f, as you claim, this will destroy property values, I could lose millions.... You should be ashamed of yourselves for wasting your time and mine with such pettiness."¹⁶

C. Racially Restrictive Covenants in the Context of Other Exclusionary Policies

RRCs were not the only method used to systematically exclude non-Whites from purchasing and occupying residences. Other race-based practices functioned in similarly exclusionary ways. Racial zoning ordinances and financing programs funded, insured, or underwritten by the federal government are examples of such other race-based practices and are briefly discussed here for context. These exclusionary policies, and the processes created by them, were lawful at the time and were for years upheld by the courts.

In some older areas where African Americans might have been able to...