A snapshot of racial discrimination in real estate

In the early half of the 20th Century, Real Estate, as an industry (reference Article 34 in the glossary), and some individual Realtors actively participated in policies and business practices that excluded individuals and families from certain neighborhoods, based exclusively on the color of their skin. 

Racially restrictive covenants, blockbusting, steering, and redlining all contributed to ensuring that neighborhoods were largely segregated based on skin color. These policies were created, enforced, or at best ignored, at every level of government and by private citizens and real estate developers alike. 

In 1968 The Fair Housing Act was passed and explicitly denounced these practices in all 50 states, making them illegal and establishing oversight with hefty fines for violations. Prior to 1968, as the suburbs were developing and since, cities passed exclusionary zoning ordinances — larger lot sizes and larger house sizes — making these areas and homes financially out of reach for many. 

This has had the effect of excluding entire segments of the population from these high-opportunity areas. In addition, the building of the interstate system wiped out entire neighborhoods, displacing its residents. Cities often chose historically black/brown neighborhoods to be the location of the interstates, compensating them pennies on the dollar of the market value of their homes. 

All of this taken together, has had the very real effect of excluding generations of families from homeownership. In our country, owning one’s home is a primary vehicle for wealth-building. The disparities in homeownership and wealth-building between whites and people of color persist today. In Minnesota, these disparities are ranked as one of the worst in the nation. 

Paradoxically, Minnesota is cited as having one of the highest rates of overall homeownership in the country. Across the state, 76 percent of white families own homes. That drops to 41 percent for families of color, and just 23 percent for black families. 

The legacy of racial discrimination in homeownership is real, but it is not hopeless. We can impact change, moving towards a future where homeownership is attainable for all wishing to achieve it.

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