Since 1950, households of color in King County lost $12 billion to $34 billion because of redlining and other racially discriminatory housing practices, according to a recent report commissioned by the county.
Conducted by the consulting firm ECONorthwest, the study’s estimates reflect not just the amount lost because of a lack of homeownership among people of color, but also money that went toward rent payments that never accrued wealth, and wealth lost because of lower home value appreciations for homes owned by people of color compared with white people.
For Black households in King County, the estimated cumulative intergenerational wealth loss ranges between $5.4 billion and $15.8 billion, the study found.
The study was part of a report commissioned in 2021, when the the Metropolitan King County Council directed county staff to look into the possibility of wastewater capacity charge exemptions or cost reductions as a form of reparations for those affected by redlining and racial covenants.
For decades, those racist practices and policies generally denied people of color and low-income residents access to mortgage loans and homes in more “desirable” neighborhoods.
The wastewater capacity charge was created in 1990 to fund the expansion of the county’s wastewater treatment system. King County’s monthly capacity charge, which all property owners connected to the county’s sewer system must pay, is $72.50, and is expected to rise to $74.23 a month next year.
“We thought that it would be really interesting to see if there was a relationship that could be understood with Wastewater Treatment Division [and] with the redlining policies across King County, so that we could try to find a way to bring about some retribution,” said Councilmember Jeanne Kohl-Welles, who proposed the report, during the committee meeting Wednesday.
The county offers assistance to qualifying low-income seniors and homeowners with disabilities who struggle to pay the charge, including payment deferrals through property liens and a 50% reduction for income-restricted affordable housing units.
The final county report ultimately did not recommend proceeding with an exemptions program or cost reductions to offset the effects of past racially discriminatory housing practices because of potential legal barriers, noting it “is not an appropriate vehicle for facilitating redlining reparations.” State and federal laws prohibit capacity charge rates or the waiving of rates based on a property owner’s race.
Despite that, Kohl-Welles said details from the report will provide a foundation for future legislation to provide some form of reparations for communities of color.
“It really brings out the shameful history, absolutely shameful, all over the country but including here in King County and the state [and] very much so in the city of Seattle,” Kohl-Welles said.
Overall, the study estimated the lost wealth for the average Black household ranges from $105,000 to $306,000, and for other nonwhite households, including Hispanic, Indigenous and Asian households, ranges from $32,000 to $85,000 in 2019 dollars.
In 1950, about 35% of households of color owned their homes, compared with more than 60% of white households, the ECONorthwest study found, a reflection of explicitly racially discriminatory housing practices like racial deed restrictions and redlining.
In 1968, the federal government outlawed housing discrimination based on race through the Fair Housing Act. Homeownership among people of color in King County peaked at 49% of households of color between 1960 and 1970, but has since decreased, the study found.
The study noted that in place of explicitly racist real estate practices, other policies and trends emerged — single-family zoning, community disinvestment, mortgage discrimination, subprime lending, urban renewal, gentrification — that blocked access toward building generational wealth for people of color.
“I think this is a really critical area for us to address. We heard just the staggering numbers of billions of dollars that have been lost in wealth by people in the BIPOC community and their descendants,” Kohl-Welles said, referring to Black, Indigenous and people of color.
“I think it’s incumbent upon us to accept it,” she added, “and also to work toward some type of restitution or reparations.”