Racist home deeds targeted by new Washington bill that would give buyers financial help

OLYMPIA – Descendants of Washingtonians who would have faced racist discrimination when buying homes prior to 1968 would be eligible for financial help in buying homes, under a proposal that won approval by a state House committee this week.

A number of home deeds across Washington have had provisions barring nonwhite people from living there. In some Spokane neighborhoods, the covenants read: “No race or nationality other than the white race shall use or occupy any building on any lot.”

The 1968 federal Fair Housing Act prohibited enforcement of these covenants.

This discriminatory language can be jarring for Washington residents to read on their deeds. But for some, these covenants are more than just a reminder of racist history. The intergenerational effects of homeownership, or lack thereof, still linger today.

“In a word, I was appalled – appalled that such texts could still exist, appalled that these agreements are still pervasive by the thousands,” bill sponsor Sen. John Lovick, D-Mill Creek, said. “This hatred is written in our state’s DNA.”

Despite a case from Spokane homeowner Alex May, the state Supreme Court last April ruled these covenants must remain on home titles and deeds as part of the public record.

The bill would create the Covenant Homeownership Account, funded by an additional $100 surcharge on recording documents with county auditors, with some exceptions.

The Covenant Homeownership Program would establish a special credit program to assist people with buying a home, including providing loans for down payment and closing cost assistance. Lawmakers designed the program to acknowledge that discriminatory housing practices of Washington’s history still impact new generations of Washingtonians.

“The results of these intentional policies, practices and laws have had a multigenerational impact on our Washington communities,” bill sponsor Rep. Jamila Taylor, D-Federal Way, said. “This bill addresses the decades of direct harms inflicted by our state on Washington residents.”

Applicants to the program must have a household income at or below the median for their area, be a first-time homebuyer and be a Washington resident. Additionally, applicants must have been excluded from homeownership by a racially restrictive covenant, or a descendant of someone who fits these criteria.

“Because of homeownership and its intergenerational tie, we tied it to the descendants of those individuals who are Washington residents,” Taylor said. “It is important that these folks who have been here since before the state began get the remedies from so many harms that they have faced generation after generation.”

Racially exclusive real estate covenants barred many nonwhite families from owning houses in Washington. Testifiers repeatedly identified owning a home as the most effective way to build generational wealth. Since nonwhite people were often prevented from buying a home in many neighborhoods prior to 1968, their descendants lack this inheritance, supporters said.

“This bill (would) enable the government, who has been responsible for creating a lot of discriminatory policies, to actually remedy the problem by creating a program that will target and help folks,” said Patience Malaba, executive director of the Housing Development Consortium.

In Washington, the homeownership rate in 2019 for Black households was 31%, compared to 68% for white households, according to a report from the Washington Department of Commerce. This gap is even larger than it was in the 1960s, when housing discrimination was legal, the report said.

“Racist housing policies of the 20th century, including exclusionary language in neighborhood covenants, locked an entire generation out of homeownership,” said Denise Rodriguez, executive director of the Washington Homeownership Resource Center. “(This blocked) their ability to pass wealth down to the next generation.”

While she said she supports the intent of the program, Spokane County Auditor Vicky Dalton expressed concerns over the rising cost to record a document. In 2001, this cost was $9. The price has been consistently climbing; in 2021, it was more than $200. Surcharges currently support funding for homelessness and affordable housing efforts. If passed, this bill would add a $100 surcharge to file certain documents, which would fund the Covenant Homeownership Account.

“You actually have to come up with the cash in order to pay for (recording documents),” Dalton said. “That at times can be difficult.”

While the fee to record a document with county auditors varies by county and state, Dalton said by her observations, Washington’s are among the highest in the nation.

The added surcharge as a result of this bill would generate around $100 million per year, depending on real estate activity, bill co-sponsor Rep. Frank Chopp, D-Seattle, estimated.

Republican lawmakers echoed these concerns that the surcharge would do more harm than good.

“We’re starting off this discussion about providing more housing to folks who are disadvantaged in the past by making it more expensive for everyone,” Senate Minority Leader John Braun, R-Centralia, said. “That seems like the wrong direction.”

Housing Committee members suggested the funding should come from elsewhere, like the Legislature’s budget, due to the already relatively high costs to record a document.

“This is not just a hidden cost on some settlement statement when you buy a house,” Rep. Andrew Barkis, R-Olympia, said. “This impacts many individuals, some would say regressively, in a situation where they have to take the proper steps to record a document.”

The House of Representatives Housing Committee heard public testimony for their version of the bill on Monday and voted 8-5 in favor of passing the bill out of committee on Thursday. The Senate Housing Committee held a public hearing on their version of the bill on Wednesday and is scheduled to vote on the plan Wednesday.