Washington sued over “racially conscious” home ownership program.

Foundation Against Intolerance and Racism (FAIR) filed a complaint on Tuesday against the Washington State Housing Finance Commission (WSHFC) over its Covenant Homeownership Program, which explicitly bars certain applicants from eligibility based on race. commission Quote the year 2024 Study the Covenant Home Ownership Program as empirically justifying its “race-conscious” special-purpose credit program, but unlikely to pass strict scrutiny.

The Washington State Legislature passed The law on the right of ownership of the house in May 2023 to redress “past and ongoing discrimination and its impact on access to credit and home ownership for Black, Indigenous and People of Color”. Past discrimination includes 50,000 clauses in housing deeds and homeowners associations that were used “between the 1920s and 1960s in Washington State to restrict housing based on race, religion and ethnicity.” according to the commission. Covenant Homeownership’s special purpose loan program offers select first-time homebuyers a zero-interest down payment loan and closing cost assistance to address discrimination and reduce the racial disparity in homeownership.

The program raises its revenue by collecting a $100 document registration assessment on real estate transactions, which the commission designed will “generate $75 million to $100 million each year.” The program is limited to those Washingtonians whose ancestors (or themselves) were subject to state racial discrimination in housing contracts before the federal government. Fair Housing Act since 1968.

Other qualifications for the program include making an area median income or less, being a first home buyer, and either being or having a Hispanic, Native American, Alaska Native, Native Hawaiian, Other Pacific Islander, Korean or Indian ancestor Asiatic. and lived in the state before April 1968. Limiting access to the program’s special purpose credit program in this way “facially discriminates on the basis of race,” according to the complaint.

The WSHFC acknowledges the racial demands of the program, describing it as going “beyond ‘colorblind’ or ‘race-neutral’ assistance to allow Washington to ‘directly remedy the harm caused by its discriminatory policies.’ Although the commission insists the program “does not represent an official reparations effort,” the United Nations, whose definition the committee cites, disagrees. One of the four UN reparations measures is “compensation… provided for any economically assessable damage, loss of income, loss of property, loss of economic opportunity or (or) moral damage”.

The Study the Covenant Home Ownership Programpublished by National Fair Housing Alliancea nonprofit advocacy group that fights housing discrimination, justifies the program’s racial discrimination on the grounds that “state institutions have played both active and passive roles in perpetuating housing discrimination against a range of marginalized groups.” The researchers also considered disparities in ownership rates in their recommendations for racial eligibility: 68 percent of non-Hispanic white households are homeowners, compared to just 49 percent of non-Hispanic and non-white households, and 31 percent of black households.

Japanese and Chinese Americans are ineligible for the Covenant Homeownership Program, despite the study of the program identifying discrimination against both groups: “Anti-Japanese sentiment led to the passage of the Alien Land Bill of 1921 by the Washington Legislature,” which restricted the ability of Japanese residents’ to own and lease land’; and the Chinese were excluded from land ownership by the “prohibition of ‘foreign land ownership’ in the State Constitution of 1889.”

Although the Home Ownership Act states that its purpose is to remedy past and ongoing discrimination, it excludes certain “Asian subgroups that … have homeownership rates equal to or … higher than whites.” However, the exclusion of Japanese and Chinese Americans from the program undermines the entire rationale of historical injustice, says Joshua Thompson, director of the Equality and Opportunity Program at the Pacific Legal Foundation (PLF), which is representing FAIR in its lawsuit.

Historical discrimination is rightly recognized as bad, as is current discrimination, which is unconstitutional unless it is narrowly tailored to serve a compelling government interest. Thompson explains that there are only two such interests: “If you have to classify on the basis of race for a brief moment to avoid a prison riot … and to remedy the discriminations of the past.” While this second interest seems to open the door to race-based programs like Washington’s, Thompson explains “that the person who gets the remedy is the person who was wronged.” In other words, it is unconstitutional to use race as a proxy for individual injury resulting from unlawful discrimination.

commission describe Covenant Homeownership Act as “the first programmatic use by a government agency to remove persistent structural barriers to homeownership,” but numerous policies have already been enacted at the federal, state, and local levels to reduce disparities between groups in facially discriminatory ways . Thompson says PLF has about fifty cases pending against preferential treatment of disadvantaged/minority/women businesses for public contracts, racial and gender quotas for state boards and commissions, federal contracts favoring minority-serving institutions, and preferential licensing for certain racial groups. such as marijuana dispensary licenses for black New Yorkers.

One might ask how these programs can exist if they are categorically unconstitutional. The answer is that even unconstitutional programs must be identified and challenged by someone with legal standing—by a particular person or group of people affected by exclusion from a particular program—in order for the courts to enjoin them through a permanent injunction.

Still, Thompson is optimistic that the ongoing game of legal Whac-A-Mole can be ended in the next five years not just by appellate opinions, but by changing hearts and minds. Ending race-based policies is “the moral outcome that will happen eventually,” Thompson says, but “it won’t happen without the work that needs to be done.”