State helps hundreds of homebuyers cross a racial barrier
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A state program addressing the historic harms of racially restrictive real estate covenants has helped hundreds of Washington residents become homeowners since last summer.
Why it matters: For decades, many deeds contained language barring the homes from being sold to Black, Asian, Native and Hispanic Washingtonians, fueling segregation and disparities in homeownership rates that persist to this day.
- Statewide, researchers with the University of Washington and Eastern Washington University have identified more than 80,000 properties that once had these types of restrictions in effect, including more than 40,000 in King County.
Catch up quick: Washington's Legislature passed the Covenant Homeownership Act in 2023 to try to remedy some of the fallout from those previous racist practices.
- The program provides zero-interest loans to help cover down payments and closing costs for first-time homebuyers who were impacted by housing discrimination in Washington.
- The goal "is to create the equity that would allow folks to build intergenerational wealth," state Rep. Jamila Taylor (D-Federal Way), the sponsor of the 2023 law, told a legislative committee this month.
By the numbers: As of this week, the down payment assistance program had helped buyers close on 247 homes, distributing a total of $27.5 million since last July, per numbers from the state Housing Finance Commission.
- That averages about $111,000 per loan.
- Another 54 loans are waiting to close, for a total of 301 loans either completed or in progress.
- 70% of borrowers on those loans are Black; 15% are Native American; 9% are Hispanic or Latino; 1% are Asian; and 4% are other races or not listed, per data the Housing Finance Commission shared with Axios.
The fine print: Buyers can qualify if they are Black, Latino, Indigenous, Pacific Islander, Korean, or Asian Indian, or if they have a parent, grandparent or great grandparent who was. Those groups still have much lower homeownership rates than white Washingtonians, a study completed last year found.
- Either the homebuyer or the applicable relative must have lived in Washington state before April 1968, when the federal Fair Housing Act made racially discriminatory real estate covenants illegal.
- Down payment assistance is limited to those making 100% or less of area median income, which is $147,400 in King County — although a new proposal from Taylor seeks to raise that income cap.
What they're saying: State Rep. Shaun Scott (D-Seattle), who assisted with the UW's project to identify racially restrictive covenants while a student there, said "residential segregation still casts a very long shadow" in Washington state.
- Those harms are reflected in Black Washingtonians having worse health outcomes and lower average household wealth than their white counterparts, among other disparities, Scott said.
What we're watching: Last fall, a lawsuit was filed against the head of the state Housing Finance Commission, Steve Walker, asserting the program is discriminatory because it is open only to certain racial and ethnic groups.
- The nonprofit filing the lawsuit, the Foundation Against Intolerance and Racism, says on its website that it is focused on "overcoming identity politics."
- Walker's lawyers wrote in a December court filing that the program targets groups that have experienced "lasting impacts of housing discrimination," as documented in last year's study.
- They are asking a judge to dismiss the complaint.