Well through the 1960s, restrictive covenants on real estate were used to create segregated neighborhoods in America, most notably in large cities like Chicago. These restrictive covenants were commonly accepted by many Americans until the passage of the Civil Rights Act of 1968. The Civil Rights Act included the Fair Housing Act, which addressed housing discrimination, stating that it would be illegal to enforce racially motivated restrictive covenants. The Fair Housing Act also provided a number of other protections to people seeking property to rent or purchase.
Before delving into the way in which restrictive covenants were used to enforce housing bias in America, it may help to know what a restrictive covenant is. Essentially, restrictive covenants are obligations which go with a property. Most restrictive covenants are focused on protecting property values in a neighborhood, so they include things like keeping a house well maintained. Some also focus on historic preservation, ensuring that new home owners don't cut down beloved neighborhood trees or alter historically important structures and landscaping.
On the more sinister end of things, restrictive covenants are often used by neighborhood associations, and some neighborhood associations carry such covenants to extremes. For example, homeowners may not be allowed to rent rooms in their house to non-family members, or they may be obliged to keep their cars in their garages. Some homeowners have begun to challenge such draconian restrictive covenants, arguing that they go beyond the desire to retain basic property values in a neighborhood.
The most common racially motivated restrictive covenants in the United States pertained to black Americans. These covenants restricted the sale of land to whites only, and specifically forbade the rental of such properties to blacks. In areas like California, with a large Asian population, restrictive covenants often denied the rental or sale of homes to Asians.
People argued that such restrictive covenants were necessary to protect property values because they thought that no one would like to live in a mixed neighborhood. The problem was exacerbated by a massive migration of black Americans to urban areas. Many of these people were skilled professionals who understandably wanted to buy or rent homes in nice neighborhoods, and they were rudely turned out by the restrictive covenants hastily written into property deeds. While not always as blatant as a “whites only” sign on a water fountain, racially restrictive covenants were just as insidious, and they weren't limited to the South.
Many people attempted to fight housing bias, often unsuccessfully, through the 1960s, and the passage of the Fair Housing Act created a powerful tool for activists. One result of the Fair Housing Act in some areas was “white flight,” as white Americans fled to the suburbs rather than run the chance of living next to respectable black professionals. As a result, many formerly white neighborhoods began to be occupied solely by black Americans, creating segregated communities which endure to this day.