Oregon Fair Housing - Required CE (2026-2027)

The Civil Rights Act of 1866 and Early Exclusionary Practices

As you study the history of real estate, you will find that over a century before modern fair housing laws, the Civil Rights Act of 1866 gave citizens the legal right to inherit, buy, lease, sell, hold, and convey both real and personal property. However, this early protection applied only to race.

Even with this law, enforcement did not exist in any practical way for a century. Because there were no federal regulatory agencies or clear complaint processes, buyers who faced discrimination had to fund their own federal lawsuits. This lack of enforcement created a deep division between written law and neighborhood reality. Private discrimination became standard practice across the nation.

In Oregon, these practices were openly built into the real estate system. For example, the Portland Realty Board changed its code of ethics in 1919 to ban agents from selling properties in white neighborhoods to Black or Asian buyers. Later, in the mid-1930s, the Home Owners’ Loan Corporation (HOLC) created redlining maps that labeled non-white neighborhoods, like Portland’s Albina district, as hazardous for mortgage lending. This practice cut off these communities from important investment capital.

Communities also kept minority buyers out through exclusionary zoning, steering by real estate agents, and organized refusals to sell. A major legal shift came in 1948 with the Supreme Court case Shelley v. Kraemer. The Court decided that while individuals could still write racially restrictive covenants into property deeds, state and federal courts could no longer enforce them. This meant a seller could not use the courts to stop a neighbor from selling to a Black buyer.

Unfortunately, this ruling did not stop private discrimination. It only prevented courts from backing it up. Agents could still refuse to show properties, and sellers could still reject offers based on race. While court enforcement of covenants ended, we still needed comprehensive legislative reform to address private market discrimination.

The Path to the Fair Housing Act of 1968

The civil rights movement ultimately forced significant legislative action. Congress passed the Civil Rights Act of 1964, which was a massive step forward for equality in voting, public accommodations, and employment. Specifically, Title VI of this act prohibited discrimination based on race, color, or national origin in any programs or activities that received federal financial assistance. While this rule fundamentally changed federally funded public housing, it did not cover the private housing market. Everyday real estate transactions between private buyers and sellers remained completely outside the law, leaving most of the nation’s housing unprotected.

A complete legislative framework finally arrived in 1968. Congress passed Title VIII of the Civil Rights Act of 1968, commonly known as the Fair Housing Act. This law established a federal system to prohibit discrimination in the private housing market. Only weeks after Congress passed this legislation, the Supreme Court issued a major ruling in Jones v. Alfred H. Mayer Co. In this case, a buyer sued a real estate company that refused to sell him a home in a Missouri subdivision solely because of his race. The Supreme Court confirmed that the original Civil Rights Act of 1866 bans all racial discrimination, both private and public, in the sale or rental of property. This decision officially closed the century-old loophole that had allowed private sellers to ignore the 1866 civil rights mandate.

These matching legislative and judicial rules forced real estate professionals to abandon systemic exclusionary practices. As modern licensees, we must understand this legal history to prevent repeating past patterns of housing discrimination. To see how these discriminatory methods worked in practice, we will next examine how redlining and restrictive covenants specifically shaped Oregon’s neighborhoods.

Historical Mechanisms of Housing Exclusion in Oregon

The federal rules that closed the long-standing loophole in private discrimination directly challenged deeply set local systems. In Oregon, these systems of exclusion were highly structured through government-backed redlining and private deed restrictions.

To evaluate mortgage lending risks, the Home Owners’ Loan Corporation (HOLC) created residential security maps for major cities across the country. The State Library of Oregon holds the historic Portland HOLC map, dated May 1, 1938, though some historical sources cite 1934 as the date. This map graded neighborhoods on a strict four-color scale. Grade A areas were green and marked as the safest investments. Grade D areas were outlined in red and labeled hazardous. This redlining practice systematically denied standard home loans to non-white residents in neighborhoods like Portland’s Albina district. By blocking access to mortgages, this mapping system trapped Black residents in the Albina area. It also prevented them from getting loans to improve their properties, which cut off capital investment and hurt their ability to build wealth through homeownership.

While redlining restricted financial capital, restrictive covenants restricted where people could live. A deed restriction is a specific limitation placed within a property transfer document by the seller. Restrictive covenants acted as binding rules that prohibited the sale, lease, or occupancy of property to specific racial and ethnic groups. Developers built these clauses directly into the legal setup of entire neighborhoods. Records show widespread racial restrictions in Portland neighborhoods like Laurelhurst, Mocks Crest, Sabin, and Kenton. 

For example, a documented deed in Mocks Crest stated that no part of the land could be used or occupied by Italians, Greeks, Hindus, Armenians, or Indians, unless they worked as domestic servants. This practice also reached outside Portland. Property records in Lake Oswego show similar deeds that kept Black, Chinese, and Japanese individuals from owning homes or accessing the local lake.

In 1948, the Supreme Court’s Shelley v. Kraemer decision made these private covenants unenforceable in court. However, the discriminatory language stayed in public property records for decades.