A History of Local Racial Housing Covenants and Federal Housing Policies

An assembly of literature finds that the Home Owners’ Loan Corporation (HOLC) did not engage in credit redlining, by means of withdrawing mortgage refinance support from lower rated areas and extensively directing support to higher rated areas. The HOLC does bestow higher ratings on subdivisions that include restrictive covenants. Given this, we would expect minimal overlap between HOLC mortgage loan support and properties with restrictive covenants. By analyzing subdivision land records, we identify property deeds containing racially or economically restrictive clauses that encompass nearly half of the total platted land area in El Paso, Texas, from 1900 to 1950. Moreover, we find limited overlap between HOLC mortgages and properties with these restrictive covenants, with the covenanted properties constituting only a modest fraction of all HOLC-backed mortgages in El Paso.