A recent study published by the Edward J. Bloustein School of Planning and Public Policy shows that although racially and economically exclusionary housing practices in El Paso, Texas, were widespread during the first half of the 20th century, the Home Owners’ Loan Corporation (HOLC) had limited overlap with the exclusionary covenanted properties.
The study, authored by Jermaine Toney, associate professor in the Bloustein School, and James Kelly, a 2020 graduate of the Master of Public Policy program, challenges the popular idea that federal housing agencies like HOLC were major factors in exclusionary housing practices. Although exclusionary practices were widespread in El Paso, this study suggests this primarily came from private agreements in property deeds — otherwise knownas restrictive covenants — rather than the HOLC mortgage lending.
Restrictive covenants are constraints on property deeds used to regulate who is allowed to buy property. These covenants were typically written by real estate developers, lenders and neighborhood housing organizations and were used for racial and economic exclusion. The main finding in the study is precisely that these covenants from private entities played a larger role in El Paso’s segregation than federal government agencies like HOLC.
According to the study, racially restrictive covenants were present on roughly 45.94 percent of platted land in El Paso, yet only 7.59 percent of all HOLC-backed mortgages were linked to covenanted properties. The 1,515 OLC-supported properties analyzed in this study suggest the HOLC was less involved in restrictive covenants.
While these restrictive covenants were prevalent in El Paso during this time, the study found that few HOLC-supported properties were tied to these properties.
“We document that there is limited overlap between HOLC mortgages and properties with race — or economic — based restrictive covenants,” the study reads. “Covenanted properties account for a modest portion of all HOLC-backed mortgages in El Paso.”