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How the Civil Rights Acts of 1866 & 1964 Impacted Real Estate

Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Participants in real estate sales and leasing transactions need to be aware of the impact of federal law on these deals. In this lesson, you'll learn about how the Civil Rights Acts of 1866 and 1964 may affect these transactions.

Civil Rights Law & Real Estate

Imagine finding your dream home in the perfect neighborhood with the perfect school district for your children. Now imagine being told that the house is not available to you even though it's on the market and you are ready, willing and able to buy it. The only obstacle to your purchase is a set of restrictions placed on all property in the neighborhood limiting the sale of the real estate in it to Caucasians - and you don't happen to be a Caucasian. While this situation sounds horrible and absurd today, it was a reality for many families in the not too distant past.

Congress eventually set out to fix things by enacting legislation to ensure that people are not subject to unfair discrimination in housing based upon their race, color or nationality, among other characteristics. This process has been long and is continuing even today. In this lesson, we are going to focus on two pieces of legislation that have worked to combat housing discrimination, the Civil Rights Acts of 1866 and 1964. Let's take a look at each.

Civil Rights Act of 1866

The Civil Rights Act of 1866 (1866 Act) is pretty simple and clear, at least as far as 19th century legalese goes. The 1866 Act basically confirmed that all people born in the United States are citizens (with some exceptions) and have the same legal rights regardless of color, race or previous servitude. What does this mean for real estate transactions?

In a nutshell, the 1866 Act makes it illegal to discriminate in the selling, transferring and leasing of real property based upon a person's race or color. There are no exceptions. Importantly, in 1968 the Supreme Court held in Jones vs. Alfred H. Mayer Company that the 1866 Act prohibited both the government and private parties from discriminating. This means that no one in the United States can engage in housing discrimination based upon a person's color or race.

Civil Rights Act of 1964

Even after the Civil War, the abrogation of slavery and the Civil Rights Act of 1866, we still had problems with equal opportunity. Congress responded with the Civil Rights Act of 1964 (1964 Act), which was a broad and sweeping piece of legislation. Here, we are just going to look at Title VI of the 1964 Act.

Title VI prohibits discrimination based on race, color or national origin relating to any activities that received financial assistance from the federal government. In the world of real estate, this means that any housing project or program that receives federal funding cannot engage in housing discrimination based on race, color or national origin. Examples include subsidized rental housing projects and affordable housing developments that use federal grants or loans for funding.

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