Single-Family Restrictive Covenants: The Aftermath of Shelley v Kraemer

• In Event: Housing and Land Use

Abstract

This paper examines how the landmark 1948 Supreme Court decision Shelley v. Kraemer, which ruled racial deed covenants unenforceable, influenced the subsequent adoption and intensification of non-racial restrictive covenants. Despite documentation of racial covenants' prevalence in the 20th century and their contribution to persistent segregation patterns, little research has investigated how property developers adapted their practices following this ruling. We evaluate whether the prohibition of explicit racial restrictions encouraged developers to implement more numerous and stringent non-racial deed covenants as alternative mechanisms for controlling land use and enforcing segregation. Using a difference-in-differences research design, we compare parcels with racial deed covenants in 1948 to those without, tracking how covenant practices evolved after the ruling. Our analysis draws on comprehensive historical parcel-level data from Hennepin County, Minnesota (encompassing Minneapolis and several suburbs), an area with a well-documented history of racial covenant use. We leverage a fine-tuned large language model to identify parcels with restrictive covenants and quantify their degree of stringency. This research contributes to understanding how private land agreements function as instruments of exclusion, potentially perpetuating inequality despite legal reforms intended to promote fairness. Given the persistent racial homeownership gap in the United States, our findings provide valuable insights into how ostensibly race-neutral property mechanisms may continue to influence residential patterns.

Authors

• Thomas Helgerman, tehelg@umn.edu

• Dena Lomonosov, University of Wisconsin-Madison