Property Law and Inequality: Lessons from Racially Restrictive Covenants
11 Northwestern University Law Review __ (Forthcoming 2022)
24 Pages Posted: 26 May 2022
Date Written: May 24, 2022
A longstanding justification for the institution of property is that it encourages effort and planning, enabling not only individual wealth creation but indirectly wealth in an entire society. Equal opportunity is a precondition for this happy outcome, but some have argued that past inequalities of opportunity have distorted wealth distribution in contemporary America. This article explores the possible role of property law in such a distortion, using the historical example of racially restrictive covenants in the first half of the twentieth century. I will argue that the increasing professionalization and standardization of real estate practices in that era included racial covenants to appeal to a predominately white market clientele, resulting in a curtailment of opportunities of African Americans to acquire wealth in real estate. Racial covenants have been unenforceable under Constitutional law since 1948, but I will argue that they were also a distortion of standard property law and that they undermined the principles on which property law rests. Courts might have recognized this at the outset and later, but for some reasons that this article suggests, they did not, with long lasting repercussions for racial wealth inequalities.
Keywords: property, racially restrictive covenants, real estate history, durable inequality, opportunity hoarding, real estate recording, metropolitan segregation, intergenerational wealth transfer
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