Seattle's Unfortunate History

Speaker 1: [0:09] Hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum, with the Awesome Nossum Group at Wilson Realty. And as always, I am joined by the wonderful Charlotte Reynolds.

Speaker 2: [0:22] Hi, friends.

Speaker 1: [0:23] Sarah Kate Davis.

Speaker 2: [0:25] Cello.

Speaker 1: [0:27] And Jason Saldarriaga.

Speaker 3: [0:29] As always.

Speaker 1: [0:32] That always makes me laugh when you say that, Jason. I know it's coming, and I still laugh every time. Um, so today's podcast is definitely different than what we normally do, but we feel like it is extremely important for us to talk about. So with all, with everything happening in the world and in America and in Seattle in this time, um, we decided that we needed to really educate ourselves and become more knowledgeable about the systemic racism that has happened in this country, and as a city, and as Seattle specifically. And we've had lots of conversations about it, and tried to figure out, you know, what can we do as real estate agents? And the first thing that we kinda figured out was, you know, let's understand what impact real estate and our profession has had and contributed to this systemic, systemic racism. And once we started digging in, we learned there was a pretty big impact that Seattle's real estate industry had, unfortunately. And I can speak for myself when I say, I mean, I knew that there was… Like, when we got our real estate license, we all heard about redlining and which is basically like they had areas that s- were supposed to not steer people to only live in specific areas. I didn't really think about it any further than, hey, don't tell people where they can and can't live. Like, that's kind of where my personal knowledge ended with that. Once we started digging into it a lot more- We realized that, uh, there's a lot more that went into that, and it's really, really unfortunate, and it really wasn't even that long ago that this was happening. So before we start really digging in, I wanna recognize, we are four white people. I am a heterosexual m- white male whose name is Christian, and I understand that I probably have a ton of white privilege, and that's not fair. And I want to acknowledge that, and we are all, as a team, doing our best to educate ourselves. A- again, I can only speak for myself. We all have our own opinions on this. Um, but w- we're trying to be better. We're trying to be the best we can be individually, and that's why, you know, we wanted to kinda share this knowledge, spread this knowledge so that we can help, uh, stop this systemic problem, and just racism in general from happening in the future. So with all that said, Charlotte, let's describe what's going on with restrictive covenants and what they are and how and when they were kinda implemented, and why.

Speaker 2: [3:30] Yeah, definitely. So over the last, you know, couple weeks researching all of this, restrictive covenants was definitely something that struck out to me as kind of a shock that this even became a thing. Um- Yeah … so what it was described as is, quote-unquote, "Agreements entered into by a group of property owners, subdivision developers, or real estate operators in a given neighborhood, binding them not to sell, lease, rent, or otherwise convey their property to specified groups because of the race, creed, or color for a definite period of time unless all parties agree to the transaction." So I know that's a mouthful. Uh, basically, it would… Uh, if there was a restrictive covenant, um, existing on the deed, the owner was legally prohibited from selling to members of the specified minority group or groups listed in that covenant. So the interesting thing about this is that they kind of became popular starting around 1917, which is when the US Supreme Court deemed city segregation ordinances illegal by violation of the 14th Amendment. So this was basically, uh, you know, a way for people to get around the, um, that law put forth by the government, and that's because, um, it's like a private dealing, um, and that's how they were able to get around that. So that's something that I found really interesting. And then, like I said, they kinda first emerged in 1917. Nationally, the first known racial restrictive covenant was written in 1924 in Seattle specifically. Um, and that had applied to three tracts of land, um, up in the Victory Heights neighborhood in North Seattle. So Like 15 minutes from where I live now.

Speaker 1: [5:24] Yeah, exactly.

Speaker 2: [5:26] So it's, yeah, it's just insane that, that this is, uh, something that was happening, like, so close to where I am. It's, you know, it's shocking really. And then with the covenants, they were deemed unenforceable in 1968, which is when, uh, they passed the Fair Housing Act. So this is finally outlawing discrimination on the basis of race, ethnicity, race or ethnicity in the sale, rental, or financing of housing. Yeah. Um, but we definitely still come across these. Um, I know that UW is, they have a huge study on it. Um, and they found nearly 500 deeds, um, on file with King County with these racial covenants included. So- Yeah … there was a lot going on. A lot of it.

Speaker 1: [6:14] Yeah. I-

Speaker 2: [6:15] Yeah.

Speaker 1: [6:15] Yeah. It's pretty crazy. Let's, let's move on 'cause I know Jason has some follow-up on this. So Jason, let's, I'll let you kinda take over from here.

Speaker 3: [6:23] Yeah. So basically, uh, like Charlotte was saying, these covenants are ingrained into the title or the deed of the property, and it carries over as you buy and sell the property over time. And some, some of these things are very important. For example, like, uh, a covenant restricting, um, what you can do with the property. You'll see a lot in certain neighborhoods, like you can't necessarily start a business, run a, uh, an agricultural business out of your, your house. Uh, you see that in certain neighborhoods or condos. But to see something that's racial, rightfully so, shocks a lot of people. I've come across this on a few deeds in the past. Just so you know, you'll see these covenants in the deeds. You'll also find them in the original surveys or the title plans. A lot of these, in Seattle at least, were done in the early 1900s, 1910, 1920, where, you know, a farmer, for example, that might have owned 40 acres in North Seattle, let's, uh, just as an example, subdivided his property into, like, 100 plots and built houses, and he might have wanted certain restrictions. Sometimes you'll see language like, "Aryans only." Sometimes you'll see stuff like, "No Blacks allowed." Y- it's, and it's just not only Blacks, also Asian Americans, and you'll see Jewish restrictions. You'll see all, all these different people targeted.

Speaker 1: [7:49] One thing too I'll add to that is they were not allowed on the property. Like, they weren't even allowed on the property unless they were servants. Like, that was one of the other parts on some of the covenants that I had seen. Like, if unless they're employed and are servants in the home, they're not allowed there.

Speaker 3: [8:06] Yep. Yep. You saw that in, like, the Windermere area and some of those- Mm-hmm deeds. So you might be wondering, how do I find out if- These racial restrictive covenants are on my title, on my property. Well, generally there's two sources. The first is the records maintained by the county auditors. They're public records. A lot of times, especially in Seattle, you can search them for free, even online, though to get a copy you'll have to pay a, a little fee to get a copy made. Um, other areas it can be really complex searching through these documents if they don't have, um, everything digitized and that sort of thing. Another more common sor- uh, source honestly is when you buy or sell your property. You pull title basically, and a company pulls all of these documents. So you can go back, potentially reach out to your, the title company that you worked with, request the documents. Potentially they might charge a fee for that as well. So those are the two main ways to, to get a copy of what is on your, your deed or title. A lot of times you'll have links, like hy- hyperlinks that show these original plat maps like I was talking about when they subdivided farms or whatnot, cr- expanded the city into outlying areas. So obviously the city realized, or, or there's uproar over time that just built, um, because people would buy property and see, wait, there's this limitation. Obviously you don't wanna see that, even if you, even if it's not enforceable.

Speaker 1: [9:40] Mm-hmm.

Speaker 3: [9:41] Um, it's still on the title. Yeah. And so the state of Washington, this is crazy, but it was last year-

Speaker 1: [9:49] Yeah

Speaker 3: [9:49] last year, 2019, that they implemented a law that allowed it, you to very, any homeowner to very easily submit this basic document that's notarized. That's the only thing you really have to do is get it notarized with your signature. Um-

Speaker 1: [10:07] Which you

Speaker 3: [10:07] can do

Speaker 1: [10:07] for free at most banks, so-

Speaker 3: [10:09] Yep … keep

Speaker 1: [10:09] that in mind.

Speaker 3: [10:10] And for free you submit it to the auditor. So they don't remove the language unfortunately, but they add a covenant modification basically. Mm-hmm. So basically it's this modification document, and it provides notice in the land title records that, um, the racially restrictive covenant is void and unenforceable. So why should we care about these? First of all, uh- I think it's pretty obvious if you're buying a property, you don't wanna see something like this on your property.

Speaker 4: [10:36] Yep.

Speaker 3: [10:37] Um, and also, you know, these, these restrictions very much impacted over time the movement and the prosperity of various groups of people because they were racially motivated in the first place, and they really restricted homeownership. Mm-hmm. Um, so anyways, we'll talk a, a little more about that in a few minutes, but-

Speaker 1: [10:57] Yep … Speaker 3: yeah. Pretty crazy. Pretty crazy that that language is indeed still in use today, and we can't really remove them. We can make them unenforceable, but we can't really remove them. Sarah Kate, let's talk about, like, banks and lending and how, how there was unfair lending practices going on.

Speaker 4: [11:18] Yeah, of course. So another way that Black people were kept out of some communities is by redlining, and that started, um, right in, I wanna say it's, like, 1930s, 1933, I think, to be more exact. But, um, I think to understand the concept better of redlining, we need to know how it came to be. Yeah. So I'll give you guys just a quick, brief little history here. Um, so when the stock market crashed in 1929, that spurred the Great Depression, and home finance was a huge factor in the economic crisis then. And a, I think about a third of all mortgages were in default then. So the Cong- uh, US Congress decided to take action and to rescue the housing sector and to restructure mortgage market.

So that created two agencies: [12:13] the Home Owners' Loan Corporation in 1933 and the Federal Housing Administration, which is also known as the FHA, in 1934. And that was their answer to correcting, uh, the mortgage market So the FHA provided government-funded insurance on mortgages origin- originated by banks. But the FHA would not insure loans for homes in neighborhoods with incompatible or undesirable racial or ethnic groups. Jesus. So basically, it would not insure loans for older homes, and that also discriminated against minority borrowers since the racial deed covenants prohibited them from moving into these newer neighborhoods. So going back to what Jason just touched on. The purpose of the Home Owners' Loan Corporation was to refinance home mortgages currently in default to prevent foreclosures, and they refinanced, I believe, nearly a million mortgages during that time. But the HOLC is basically the originator of mortgage redlining. So mortgage redlining is often used to describe different patterns of economic discrimination, and it's a practice that denies services to a whole neighborhood on the basis of race or ethnicity. Government officials used a lot of economic research and, uh, at times social science thinking, and they put resources behind these two agencies, and it's all based around exclusion. So the HOLC had maps, and those were generated, like I said, in the '30s, and they assessed creditworthiness. And the majority of the neighborhoods were African American neighborhoods. They were marked in red, was, which is where we get redlining from. Mm-hmm. And those neighborhoods that were red were designated hazardous. So a lot of real estate lenders during that time prioritized the white-owned property and emphasized financial value on neighborhoods that were mostly white and people that were white. So there's a lot of racist language and a lot of racist attitudes going on during that time. And just to gu- give you guys an example of the maps they were drawing up, they had A through D. So A neighborhoods were deemed to be the best, and they were marked green on a map. B neighborhoods were still desirable but not as nice as green, and they were marked blue C neighborhoods were defined as neighborhoods in decline, and they were marked yellow. And then the D neighborhoods were those I just spoke of that were rated hazardous and marked red on a map. And those, like I said, were often the low-income urban neighborhoods that were predominantly Black.

Speaker 1: [15:10] Mm-hmm.

Speaker 4: [15:11] Redlining was outlawed in the '60s by the Fair Housing Act, and then shortly… Well, not shortly, but in 1977, the Community Reinvestment Act made r- all redlining practices completely illegal. And that act required the Federal Reserve and other banking regulators to encourage financial institutions to help meet the credit needs of those kind of C and D communities, which they already did business in. So they were saying, "Hey, you need to reach out to the communities that you're in. You need to include low and moderate income neighborhoods, and help them with loans, and, and help them stay safe and kind of reinvest in their community."

Speaker 1: [15:56] Yeah. It's crazy that that was just 1977.

Speaker 4: [15:59] I know. It's so weird to think about that.

Speaker 1: [16:01] It's 43 years ago.

Speaker 4: [16:02] Yeah. Yeah. The maps are gone, right? But this has created a larger problem, which is what we're touching on today. So although redlining could have technically affected white and Black people that were in those lower income neighborhoods, it still just had a greater, longer lasting impact on Black people. Mm-hmm. And it impacted their generational wealth, and that's, that's what we're dealing with today. And, you know, a lot of that wealth was passed on from real estate transactions.

Speaker 1: [16:33] Yep.

Speaker 4: [16:33] And they're not able to carry that forward to the future generations. I have a crazy stat that I, that I found while doing some research, and it's a Redfin stat, I believe, and it's a typical homeowner in a previously redlined neighborhood has gained 52% less wealth than the typical homeowner in a previously greenlined neighborhood, and that translates now to about $200,000.

Speaker 1: [16:57] Wow.

Speaker 4: [16:57] Yeah. That's

Speaker 2: [16:58] crazy. Oh my

Speaker 4: [16:59] goodness. So crazy.

Speaker 2: [17:00] Yeah.

Speaker 4: [17:00] And then, uh, currently the national home ownership rate for Black people is 44%, and for white people it's 73%. Geez. And I found a ton of, um, a ton of other stats where it's talking about those A green neighborhoods, how there's a greater gap in, in big cities like, um, Miami. There's another, uh, area outside of Detroit, Jersey, and there was as low as 2% Black home ownership-

Speaker 1: [17:31] Wow … Speaker 4: in, in one of those neighborhoods, in those A neighborhoods now. So it's… You can see where it comes from and where it started, and how it's still really affecting this generation. That's, that's messed up. And it's- Yeah … it, I mean, this is why we're learning this, and this, it sucks that we're just now learning about this, but that's, that's why all the protests are happening. That's why we're all being re-educated or just educated for the first time on what is going on. And it's important for us to all, you know, educate ourselves and, and learn what has happened and what is currently going on so that we can Stop, uh, it from happening in the future and, you know, support the, these communities, 'cause it wasn't just Blacks in a lot of these cases with these covenants. It was- Mm-hmm … Jewish people, it was any, basically any non-white person.

Speaker 3: [18:30] Mm-hmm.

Speaker 1: [18:31] Right. And, um, i- it's, it's crazy to me. I mean, I'm 38. Five years before I was born, this was still a thing. That just blows my mind. That's not that long ago. So it's, it's crazy how recent it was, um, but we have more to go. So Jason, let's talk about how these restrictions shaped where Black, Black, Black people live specifically in Seattle. Let's bring this, like we've kinda got the, some baseline general knowledge of what happened, and now let's talk about how it affects Seattle.

Speaker 3: [19:05] Yeah. Uh, so dramatically, just- Yeah … to put it lightly.

Speaker 1: [19:10] Yeah.

Speaker 3: [19:11] Um, it radically shaped where Black people and, and other minorities live throughout Seattle. So UW has some maps online that show the ra- racial makeup of Seattle over the n- uh, the 20th century, and it's just very clear looking at these maps how segrega- segregated Seattle was, and quite frankly, still is today. The repercussions of this history are abundantly cl- clear. For example, Capitol Hill was one of the most aggressive in putting those deed restrictions, those racially-based deed restrictions on their properties. Pretty much, like 100% of all properties on Capitol Hill had those.

Speaker 1: [19:48] Mm-hmm.

Speaker 3: [19:48] And Black people, as a result, were basically confined to the area south of Madison, and that's the origin of, um, what we see today in the Central District being pre- dominantly Black. Over time, if you look at these maps on the UW website, you'll see that, uh, y- different minorities, Blacks, for example, they were very much confined to the Central District, what we call the Central District today. And then in the '50s or so, they started moving south into Beacon Hill, that area. Um, Asian Americans were very restricted to, uh, North Beacon Hill and the International District, and over time kind of continued, uh, going, moving south. But if you look even at the 2010 map, it is very segregated in terms of the races. North Seattle is shockingly white.

Speaker 1: [20:38] Yeah.

Speaker 3: [20:38] Shockingly white. Unfortunately, also, like the wealthier neighborhoods align with this, these maps. It's just kinda shocking. Mm-hmm. Broadmoor, Magnolia, these, these, uh, neighborhoods have- Very white populations statistically looking at these UW maps. So this is all to say the impact is very widespread, and then you touched upon this already, but it really caused a lot of Black families to miss out on one of the biggest wealth builders white Americans have, right? Yeah. Which is home ownership.

Speaker 1: [21:10] Mm-hmm.

Speaker 3: [21:10] And, uh, this definitely accounts for some of the wealth disparity between Black and white families that we see to- today, and it speaks to the systemic racism that You know, we're, we're finally, I think, starting to address

Speaker 1: [21:23] Yeah. Yeah.

Speaker 4: [21:25] Well, how crazy that the name Seattle was from a local tribal leader, yet we wouldn't let Native Americans live within the city.

Speaker 1: [21:34] Yeah.

Speaker 4: [21:34] Like, just think about that. That's so crazy. That's

Speaker 1: [21:36] ridiculous.

Speaker 4: [21:37] Yeah.

Speaker 1: [21:38] Yeah. Absolutely ridiculous. Yeah. We're gonna steal your name, but you can't live here.

Speaker 4: [21:43] Exactly. It's terrible.

Speaker 1: [21:45] Yeah. So, I mean, we kinda talked about this just now, but, uh, this definitely had an impact on the City of Seattle today, and it still has an impact today. Um, redlining has, you know, redistributed or, m- not, not redistributed, has completely blocked out some neighborhoods from gaining in, you know, building that generational wealth in, you know, development, in real estate prices, in the style and size of homes. Um, I mean, real estate has had, in my opinion, a much bigger impact than I personally ever realized, uh, in holding back th- these non-white, basically any non-white, uh, person in the City of Seattle. And Seattle, as you know, is a very progressive city, so it blew my mind that this was going on, and I feel like it's absolutely ridiculous that it did happen. Um, and the, the lack of diversity in the northern part of Seattle also blew my mind. I mean, thinking back, I guess, yeah, that did make sense. I grew up, I was born in North Seattle. I went to school in, right by Northgate for the first, until I was in, what, second grade. Then we moved to Lynnwood, also very white. Like, there's not a lot of disparity between races in any of the schools I went to as a kid, un- until I got to Lynnwood, actually, but it w- that was more Asian. Like, there's a lot of, um, a lot more diversity up there, thankfully. But in the City of Seattle itself, like, you can still see real estate prices. They're, they're starting to change in these neighborhoods, but that's also leading to another topic, which we're not gonna go over today, and that's gentrification. Um, and w- I, that's, this is just opening another door into other issues that have grown because of this. Today's conversation is literally just scratching the surface Again, I'm only speaking for myself, but this opened my eyes personally as to what was really going on and how much of an impact this had on people. I appreciate you all listening, following this journey with us, learning the history of the city. It really makes me sad, and it, it, it somewhat changed my feeling of this city that I grew up in and love. And, you know, I kinda thought it was, you know, all rainbows and unicorns all the time, but no, it wasn't. It's just like any other city, and we have our warts and our issues that's been kinda pushed down, and they're, they're being shown now, and we need to, we need to pay attention. We need to listen. We need to learn. We need to understand how people have been held back, and how we need to now lift them up and help lift them up, or just allow them to be lifted up. Like, sometimes it's just getting out of the way, letting them do what they haven't been able to do for a long time. Like, there's, there's a lot that we have, a long way that we have to go. Um, again, for me, this was, this was tough to learn, and it was hard for me to learn this about my city. So yeah, as a team, we're just gonna continue to learn. We're gonna continue to grow and learn and, and improve and get better so that we can do our best to not let anything like this happen again and, and, you know, impact other people, and educate our, our buyers about what happened and what is happening and-

Speaker 3: [25:22] No, I agree with what you're saying. You know, we are all, we're for white people. Yeah. We created this problem. I think we need to fix it. Um- Yeah … and that's something that I have really Kind of the, the view I've made in the last few weeks as I've really dug really deep into our history, just confronted this, which I think a lot of us have, so.

Speaker 1: [25:46] Yeah.

Speaker 3: [25:46] Um, so yeah, um, I, uh, I'm glad we're discussing it now, starting to acknowledge it.

Speaker 1: [25:54] Mm-hmm.

Speaker 3: [25:54] And, uh, hopefully w- through continued dialogue and people leaning in, we can, w- we can't prevent the, we can't rewrite history- Yeah … just like we can't necessarily rewrite these covenants per se, but we can fix them moving forward. Yep. So, um, so yeah.

Speaker 1: [26:13] I think you said it very well, Jason.

Speaker 4: [26:15] I agree. Just stay open- I agree stay mindful, and, you know, keep, keep educating ourselves is, is the best path forward.

Speaker 1: [26:23] Yep. All right. Well, thank you for following along with us on this journey. Um, definitely feel free to, you know, reach out to us if you wanna talk about it or have suggestions or anything. We're, we are open-minded. We want to learn. We want to get better. And, um, yeah, we're f- we're doing our best. We're gonna continue this conversation. It's not ending. Um, and we will, we will keep on learning. So thank you very much everyone for listening today, and, uh, hope you guys are all well.

Speaker 3: [26:53] Bye.

Speaker 4: [26:53] Thank, thank you. Bye. Thank you.