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King County Council accepts report, considers recommendations for restitutions for victims of race-based real estate practices

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Black, Indigenous, and People of Color (BIPOC) who lived in King County since 1950 lost $12 billion to $34 billion in intergenerational wealth due to race-based restrictive real estate practices. That estimate – believed to affect 386,600 residents representing approximately 129,300 households — was in a recently published study that was part of a report the King County Council commissioned in 2021.

The council acknowledged receipt of the report, The Impact of Redlining and Racist Real Estate Practices on King County Residents – Wastewater Capacity Charge Exemption Recommendations at its July 12, 2023 meeting.

In commissioning the report, the council directed county staff to explore the possibility of wastewater capacity charge exemptions or cost reductions as a form of reparations for those residents or their ancestors who were affected by racial deed restrictions, racial covenants, and redlining practices. 

The Department of Natural Resources and Parks developed the report based on research and analysis by consultants at ECONorthwest, which worked with an Interdepartmental Project Team, the University of Washington’s Seattle Civil Rights and Labor History Project, and an advisory team of university-level economists and subject matter experts.

Along with an extensive review of relevant literature, ECONorthwest also used a quantitative statistical analysis based on publicly available data sets and qualitative data collected from affected community members. The report notes data limitations within the geographical boundaries of what is now King County and a lack of adequate historical recordkeeping.

People of color and low-income residents were denied access to mortgage loans and homes in more “desirable” neighborhoods due to racist practices and policies, according to findings by researchers.

The final report highlights policies that cities and jurisdictions in the country have considered and implemented to restore justice for race-based restrictive real estate practices. The report also includes a comprehensive summary of key discriminatory homeownership practices and policies enacted or tolerated by the federal government, the State of Washington, King County, and local jurisdictions in the county that have contributed to racial homeownership disparities which prevented BIPOC households from attaining homeownership in the county.

Of the estimate of lost intergenerational wealth, between $5.4 billion and $15.8 billion is the amount lost by Black residents. The report said the lower estimates are based on inflationary adjustments while the higher estimate is based on the growth of the S&P 500.  

“Discriminatory practices and policies in government, the banking, and real estate industries continue to impede access to homeownership for BIPOC households today,” according to the report. “Such practices negatively affect credit scores mortgage access, and the general financial security of BIPOC households such that obtaining homeownership has been, and continues to be, a significant and unacceptable hurdle.

Analysts considered a wastewater capacity charge exemption or reduced rate for those impacted by race-based restrictive real estate practices, as well as policies that other jurisdictions around the country have considered and implemented to restore justice for restrictive race-based real estate practice. Among jurisdictions whose restitution examples were cited were Denver; Evanston, Illinois; Los Angeles; Tulsa and other cities in Oklahoma.

The final report for the King County Council did not recommend an exemption or a reduced rate on the wastewater capacity charge for those impacted by race-based restrictive real estate practices. Both state and federal laws prohibit rate classifications, set capacity charge rates, or wave the payment of the capacity charge based on a property owner’s race, the authors explained.

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