Racial Covenants – what’s that?


From Donald Trump pulling the ultimate political hat trick of losing the House of Representatives, the Senate and the Presidency in four years to the Derek Chauvin verdict, to the treasonous behavior of those who stormed the Capitol on January 6, 2021 to the international sea of millions who adopted the Black Lives Matter moniker, our current environment is that of a social reckoning.

Racially-restrictive deeds were a ubiquitous part of real estate transactions. Covenants were embedded in property deeds all over the country to keep people who were not white from buying or even occupying land

Here in the United States a good many of our social ills deal with race and/or class. People who have been sleep a good portion of their life have awakened. Some ponder the question of the racial disparities placed right on their doorstep. Racism is an institutional construct. In other words the system was created and in many cases codified into law.

The wealth gap presents great data for our divide. On the other hand another element to maintain the gap was racial covenants regarding home or property ownership. They were a tried and true method to keep minorities, specifically those of African descent from purchasing property. It was a little secret but it was law (until in was struck down in 1968) and since it dealt with ownership or property rights, it was part of the official title record. Even though we are in 2021 and the majority of homeowners have no idea of its existence (I mean, who has the time or experience to read a title report?). But, if you ever have the time and look, it is there and its purpose was to legally restrict who could purchase property.

Today the Los Angeles Times explored the topic in greater detail. So, I would encourage you to educate yourself of how these elements created the racial disparities that is current social discussion is attempting to correct.


LOS ANGELES TIMES – THE UGLY AND TRUE HISTORY OF RACIAL COVENANTS

California Real Estate Market Booming Even As COVID-19 Pandemic Continues


The above headline is what scares the hell out of would-be homebuyers. As real as the numbers are they are just another hurdle which must be navigated to achieve homeownership.



In December, the statewide median home price was $717,930, up 16.8% from December 2019. But the high prices are not driving buyers away.

The notion of buying a home at $700,000 is one factor which scares many potential buyers into paralysis. While financing is attractive there are hurdles which cause some to simply throw in the towel before even trying. Make no mistake, the aspiration of purchasing a home can be a daunting experience. Several important factors to consider:

  • The story projects great news for those who have succeeded in purchasing a home during this worldwide pandemic. But who has the $140,000 or even $70,000 or $35,000 required down payment stashed away?
  • Using the “average” sales price as a barometer, how many first-time, would-be buyers can afford a monthly mortgage payment of approximately $3,700?
  • Further, based on the above how many “average” people have the income to qualify for a mortgage? Using the above illustration you would need a combined annual income of approximately $115,000.

THE BOTTOM LINE

There is no need to stay discouraged. Even in the best of times acquiring a home requires planning, persistence and laser-focused attention on succeeding. While the numbers are the numbers the fascination in purchase a home is there is the “average” and then there are options. It may mean you will have to do more research. Think out of the box. Be creative. All, with the focus of getting in, somewhere!!!!!! The one constant is however you achieve it, homeownership is a coveted goal and despite the nerve-wracking numbers in the long-haul you can position yourself for financial mobility while meeting a very basic demand………securing shelter.

The last critical point is to network and align yourself with professionals who can help to minimize the myths and set you on the path to achieve, and that may not be the $700,000 home but whatever it may be, it will be yours. Why? Because not everybody sells for the same reason or has the same motivation other than to sell to the buyer who can meet their price and their timeline.

Mortgage rates climb above 4%


For the first time in eight months mortgage rates have climbed above the 4% threshold.  The news was expected as financial markets continue to post positive numbers including improved business and consumer confidence.

Lenders who fund mortgage applications typically offer rates in a range based on various factors.  Today’s report is from Freddie Mac’s primary market rate survey.  It is the industry standard used to gauge rates and the data is compiled from a sample of lenders who sell their closed mortgage loans on the secondary market.  This week’s rate is 4.04% and is based on the benchmark thirty-year mortgage.

 

While mortgage rates inched higher they stil make home ownership affordable.  At the same time consumers realize timing is everything and as overall economic conditions improve, increases may be the result.

 

Current snapshot of rates

January 18, 2018

30-Yr FRM 15-Yr FRM 5/1-Yr ARM
Average Rates 4.04% 3.49% 3.46%
Fees & Points 0.6 0.5 0.3
Margin N/A N/A 2.74

source:  Freddie Mac Rate Survey

CITY RISING:  A 2017 look at Gentrification


Special Review

 

[Los Angeles, CA] On September 13th KCET in partnership with The California Endowment hosted the premiere screening of CITY RISING.  The theme of the documentary is gentrification.  An overflow crowd of nearly 700 was on hand to see the “Director’s Cut” which was 90 minutes.  Coincidently, on the same evening KCET showed the regular 60-minute screening on their channel.

If you’re black, get back!

If you’re brown, stick around!

If you’re white, it’s all right!

from an anonymous social scientist

 

Gentrification, a working understanding

Not every white person is rich and not every black person or those of color is poor!  One legacy of the history of the United States is the construct of racism or using race as a controlling factor.  On basic quality of life issues; from economic or the ability to earn money, to health, to housing and other areas whites were granted privilege over other groups.   Even today many attempt to dismiss this very basic fact of not understanding or accepting the issue in a historical context.

 

“He who gets behind in a race must forever stay behind or run faster than the man ahead of him, that is our dilemma” – Dr. Martin Luther King, Jr. January 1961 

 

That privilege buffered by legal discrimination, including specific land covenants of who could buy land or live in certain communities which set in motion the premise of defining the American Dream as being able to afford a home.  Unfortunately, the dream dismissed the reality of certain groups being blocked based on race.

 

In addition to basic shelter, the more important benefit of home ownership is wealth accumulation or a legitimate asset which has generational benefits.  The lack of it, is one reason for the marginalization.

 

Inner cities, the target of gentrification

 

Following the great depression and leading up to the industrial revolution, cities throughout the U.S. witnessed an economic boon.  Labor was the fuel that fed the boon and many ethnic groups relocated and the result was financial uplift.  As the majority group or whites were enjoying the lions-share of the boon, they created the strategy in developing suburbs which allowed them to flee the urban core.  They were able to transfer their properties (through sale or renting) to the minority groups who remained.  Thus, the term “white flight” was coined.  More important and critical to the gentrification discussion is the reality that as whites moved out of the urban core, critical resources were stripped and went with them.   Employment stability left.  Stores left.  Services left.  Resources which are necessary for a community to thrive slowly disappeared.  The result was communities were disseminated and succumbed to blight and other negative forces.  As bad as that may appear the groups who remained didn’t die off.  Instead they created their own identity based on their culture to create a vibrancy which allowed them to thrive and redefine the space they occupied.

 

Reclamation

 

City Rising focuses on several communities in California.  They are Santa Ana, Long Beach, Sacramento, Oakland, Boyle Heights and South-Central Los Angeles.

 

One poignant part of the documentary is discussing the issue of racial covenants which made it illegal to sell property to certain groups.  Many people are ignorant to this reality and dismiss it as being made up or something which happened lifetimes ago.  The sad reality; it is current history regarding real estate ownership.  Assemblyman Hector De La Torre lives in South Gate, CA.  The discussion centered around him showing the covenant as part of the land title documentation which years earlier would have prevented him from purchasing the very home where he was being interviewed.    Even though the practice was outlawed through fair housing legislation, it remained as permanent language within the documentation.  Using his activism as a political leader he created a law which would have required title companies to remove the language from the report.  Unfortunately, even though the law passed, then Governor Arnold Schwarzenegger vetoed it and the language remained as a reminder of the discrimination meted out against certain groups.

 

The documentary does a good job in highlighting the effects of gentrification.  Even though race plays a huge role in its impact, the subtle reality is the class divide or the “haves versus the have nots.”

 

Cities that were once thought of as “dead” have sprung to life through various forms of reinvestment.  Interestingly many of the families who fled the urban core, see their offspring take on a renewed pioneering spirit to reclaim areas.  With their economic status, they are able to pick up properties, many on the cheap and with modest investment, transform what was unthinkable into havens of a new lifestyle.  Through this process and focus on redevelopment they are able to attract stores and services which provide a great opportunity, assuming one has the money to operate.

 

People can only buy your property if you agree to sell

 

Who doesn’t want to live in a “nice” neighborhood?  The problem with gentrification and this is where CITY RISING shines is as new people reclaim or move back into neighborhoods,  the issue is what happens to the current occupants?  Do they just disappear?  Do they escape in the middle of the night?  For many it’s pure economic, especially the vast majority who are renters.  Those who reclaim properties and invest in the restoration are not motivated by some benevolent gesture, but from an economic perspective so it boils down to return on investment.  The result is the rise of home prices as well as the rise of rents.  Many occupants simply become priced out and that is the ire of those who oppose gentrification.  The community they thought they knew……no longer exist, so they must rebuild their lives or try to coexist with their “new neighbors.”    Some do it very successfully, most don’t because they do not have the leverage of home ownership.

 

There is much more to this topic.  The causes and effects are worthy of examination.  This documentary does an excellent job in creating a foundation for you to move forward.

 

See the documentary HERE.