Racist policies helped keep Rhode Island Black homeownership rate low

The impact of racially restrictive covenants and other discriminatory practices lives on today

Homes RI
5 min readFeb 15, 2024

When we think about the historic and ongoing oppression Black Americans have faced, the battle for secure, affordable housing is particularly relevant.

For decades, the U.S. government actively barred Black residents from homeownership and access to safe housing, especially in the suburbs, through a series of racist policies and practices. These policies determined where people of color could live and where they couldn’t. The effects of this deliberate racial segregation by the government still endure today.

In the 30s, the Federal Housing Administration (FHA) started helping white families obtain low down-payment loans to purchase homes in suburban neighborhoods … their ticket to middle class society.

Black families would not experience the same life-changing benefits, thanks to practices like redlining. Predominantly Black neighborhoods were outlined in red on maps — and the FHA refused to insure loans in redlined communities.

The 1940s brought a new system to prevent Black families from leaving redlined neighborhoods: racially restrictive covenants. Racially restrictive covenants were contractual agreements woven into real estate deeds across the U.S. to prevent people of color from owning or occupying property.

This practice was accelerated by the FHA in the 40s when it began subsidizing the construction of subdivisions where homes could only be sold to white families. Meanwhile, the FHA denied loans to Black families seeking homes in the suburbs and in areas that abutted white neighborhoods.

The FHA operated on the racist assumption that if Black families moved into or nearby the suburbs, the property values of the white homes they were insuring would decline and put their loans at risk.

By the late 1930s to 1940s, more than 80 percent of suburban neighborhoods had racial covenants that barred Black people from purchasing homes.

This Associated Press story published in the Pawtucket Times on Nov. 30, 1953 tells of a woman jailed for allegedly violating a racially restrictive covenant.

The landmark case of Shelley v. Kraemer

In 1945, the Shelleys, an African American family, sought to relocate to a St. Louis neighborhood that had been under a racially restrictive covenant since 1911. The property owner Louis Kraemer sued the Shelleys in an effort to enforce the covenant and prevent the Shelleys from moving in.

The Supreme Court held that enforcement of such covenants violates the Equal Protection Clause of the Fourteenth Amendment. The problem with the Shelley v. Kraemer case was that the covenant was a private agreement, not a state action. Still, the court opined that taking court action to enforce these agreements was a state action, and thus, the state was denying African Americans their constitutionally-protected right to purchase property.

Ethel Shelley reads a May 4, 1948 St. Louis Post-Dispatch story about the Supreme Court decision outlawing racial covenants. (Courtesy St. Louis Post-Dispatch)

While Shelley v. Kraemer did not end racial discrimination in housing, the court ruling would effectively eliminate the widespread practice of segregation via racially restrictive covenants. It also shaped future cases before the Superior Court with regard to the Equal Protection Clause.

Rate of Black homeownership in R.I. remains low

Racially restrictive covenants, along with a multitude of other discriminatory housing practices, would have a lasting impact on the rate of Black homeownership, which hit a 60 year low in 2019 (40.6 percent, down from 49.7 percent in 2004).

Rhode Island’s racial homeownership gap is even worse than the national average. According to a 2022 report, while 62 percent of all Rhode Islanders own their own home, only 34 percent of Black Rhode Islanders are homeowners (compared to 42% nationwide).

While initiatives like Rhode Island’s down payment assistance program have acted as a tool by which BIPOC households achieve some of the capital necessary to purchase a home; the program did not specifically target households of color.

As of November 2023, the program had provided grants to 51% minority households and 49% white households in a state that is 70% white. The grant closed to new applicants in Oct. 2023, and there’s no current proposal on the table to continue funding it.

In the meantime, Black Rhode Islanders continue to experience discriminatory practices.

According to the report, even with the same application profile, Black people are significantly more likely to be denied loans than White mortgage applicants with the same credit score. In 2020, nearly 10% of Black Rhode Island applicants were denied, whereas 6% of white applicants were denied.

There’s a lot of work to do.

REPORT: Policy Recommendations to Increase the Rate of Black Homeownership in RI

The State of Black Rhode Island report also lays out policy recommendations for increasing the rate of Black homeownership, including:

Creating financing programs for Black homebuyers with lower credit scores;

Expanding the capacity of local Community Development Networks, and;

Increasing access to programs offered through the Federal Housing Administration and Housing and Urban Development that target Black people.

“Working with organizations such as the West Elmwood Housing Development Corporation, SWAP, OMNI Development Corporation, ONE Neighborhood Builders and the Housing and Urban Development’s Home Investment Partnership Program in Rhode Island, to name a few, could increase homeownership and housing security,” the report states.

“Effective policies must address historic and current barriers to homeownership related to intentional racial exclusion and barriers to credit access. By continuing to identify and work with national and local organizations, as well as government agencies, we can help improve Black homeownership rates in our state.”

Further reading

The State of Black Rhode Island: Homeownership Report (2022)

Redlining Rhode Island: How the government enforced segregation and blocked Black homeownership

‘Redlining never really went away’: Black Rhode Islanders still face racism when buying a home — The Boston Globe

Timeline of historic housing discrimination in the U.S.

The Color of Law: A Forgotten History of How Our Government Segregated America

Just Action: How to Challenge Segregation Enacted Under the Color of Law

Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership

This post was written by Nicole Dotzenrod, Housing Network of Rhode Island communications manager.

Do you have a story you would like to uplift? Email Nicole at ndotzenrod@housingnetworkri.org to submit an idea or guest blog post.


Homes RI is a coalition of organizations working together to increase the supply of safe, healthy and affordable homes throughout Rhode Island. We believe Rhode Island can and should be a state where all residents are able to live in safe, healthy and sustainable homes in thriving communities. | homesri.org



Homes RI

Homes RI is a coalition of organizations working together to increase the supply of safe, healthy and affordable homes throughout Rhode Island | homesri.org