Real Estate Terms

The Civil Rights Act of 1866: How It Impacted Real Estate

When was the last time you caught up on your American history? Being aware of current fair housing laws is essential to passing the real estate exam, but it is just as important to understand where they came from in the first place.

For example, the fight for fair housing could not be possible without the enactment of the Civil Rights Act of 1866. Many argue that this act was the first step in combatting housing discrimination and ensuring equal opportunities for all.

But how could a law from 1866 bear such relevance in the real estate world today? Well, you’d be surprised – keep reading to learn more!

What Is the Civil Rights Act of 1866?

The Civil Rights Act of 1866 declared that all persons born in the United States are created equal by the law. This civil rights bill protected the rights of freed slaves, ensuring they had the full and equal benefits of the same laws as white people. African Americans could no longer face discrimination because of their race, color, or previous slavery or involuntary servitude. 

But to which personal freedoms did black citizens finally have access? Well, most notably, the Civil Rights Act of 1866 said that recently enslaved people had the right to

  • Make and enforce contracts
  • Sue and be sued
  • Give evidence in court
  • Purchase, lease, sell, hold, and convey real and personal property

The History Behind the Civil Rights Act of 1866

From 1776 until 1865, the enslavement of Africans and African Americans was legal in the United States. While the Thirteenth Amendment eventually abolished slavery, this dark period caused irreparable damage; we can still see its effects in the housing industry today.

When the Thirteenth Amendment was finally passed in 1865, race issues were not immediately fine and dandy. Black citizens were still not considered equal under federal law and could not even own property.

It wasn’t until Senator Lyman Trumbull introduced the civil rights bill in 1866 that the conversation started to shift meaningfully. Although President Andrew Johnson vetoed the bill, the Senate and the House voted to override him. Thus the Civil Rights Act of 1866 became law.

The Role of the 1866 Civil Rights Act in Real Estate

Among the many benefits of the 1866 Civil Rights Act, one of the most important was that any person born in the United States could own property regardless of color or race. This new law greatly impacted the real estate world, opening the door for conversations about fair housing and housing discrimination. 

As a result, more types of people are now able to access fair housing opportunities. While housing discrimination is still not entirely eradicated in the U.S., the issue is statistically much lower than in 1866.

Real and Personal Property: What Is the Difference?

We’ve learned that this act gave newly freed slaves the right to full and equal benefit of the law, the ability to enforce contracts, and the right to own real and personal property. But you may wonder, “What’s the difference between the last two?”

Good question! This will be important to know this for the real estate exam, so let’s dive into it!

Real Property 

Real property is all things attached to the land and all the legal rights to it. Examples of real property include

  • Buildings
  • Canals
  • Fences
  • Crops
  • Ponds
  • Reservoirs

Personal Property

Personal property refers to all things removable from the land. Examples of personal property include

  • Clothes
  • Lawnmowers
  • Couches
  • TVs
  • Furniture 

Where the Civil Rights Act of 1866 Succeeds

In many ways, the Civil Rights Act of 1866 was revolutionary. The national government finally recognized African Americans as citizens who deserved equal rights.

No longer could African Americans be forced into slavery or involuntary servitude; instead, they could create or enter into lawful employment contracts. If an injustice were to occur against a person of color, they could sue the offender in court and provide their own evidence.

But in terms of real estate specifically, the ramifications of such an act were enormous. The decision that former slaves could own property was not only a step in racial equality but equality for all types of minorities who fair housing laws would later protect. 

Where the Civil Rights Act of 1866 Fell Short

Unfortunately, the passage of this civil rights bill did not immediately ensure peace and equality for all. Sure, black citizens could finally own property in the United States, but racial discrimination and segregation were still rampant.

The laws created in the Civil Rights Act of 1866 were also not always adequately enforced, so housing discrimination was still an issue. Even when black citizens could access housing opportunities, many white citizens were less than welcoming to their new neighbors. 

To make matters worse, black citizens were also fighting against voter suppression. Their ability to vote for more stringent fair housing laws was compromised, as they were intimidated at polling places and turned away. Considering all of this, it is safe to say that African Americans received only nominal freedom due to the 1886 act.

It is also important to note that this act was primarily focused on ending discrimination against formerly enslaved people. In terms of housing, there were still other groups being discriminated against, including women and minorities with different religions.

The Civil Rights Act of 1866 was groundbreaking for its time, but it was clear that there was still a long way to go. The good news is that fair housing laws have improved drastically since 1866, as new regulations have finally come into play. 

What Other Laws Protect Against Housing Discrimination?

While the 1866 Civil Rights Act is a tough act to follow, more recent laws have been enacted to ensure fair housing and combat discrimination. Let’s take a look at two of the most significant examples below!

The Civil Rights Act of 1964

Nearly a century after the first, President Johnson signed the Civil Rights Act of 1964 into law. Like the Civil Rights Act of 1866, this bill ensured protection for people of all races and colors but added a few other categories into the mix. 

The Civil Rights Act of 1964 prohibited discrimination against the following categories:

  1. Race
  2. Color
  3. National origin
  4. Religion
  5. Sex

This was a good start for expanding fair housing law, but some improvements were still needed!

The Fair Housing Act

One of the most notable acts designed to protect fair housing is the Fair Housing Act of 1968, also known as the Civil Rights Act of 1986, or Title VIII. 

So how is it different from the others? The Fair Housing Act (FHA) is the law that prohibits discrimination in the buying, selling, renting or financing of housing. But unlike the other civil rights acts, the FHA defends seven protected classes from housing discrimination. 

The seven protected classes under the FHA are

  1. Race
  2. Color
  3. National origin
  4. Religion
  5. Sex (including sexual orientation and gender identity)
  6. Familial status
  7. Disability 

This means that no matter your race, color, sex, creed, or familial status, the FHA will have your back against housing discrimination.

What Does Housing Discrimination Look Like Today?

Housing discrimination looks a lot different today than it did in 1866. But even though circumstances have improved, it’s still a widespread problem in the United States.

According to the Department of Housing and Urban Development, an estimated four million people experience discrimination in the rental housing market annually. Racial and ethnic discrimination, in particular, has proven to be a problem that we have not yet stamped out. 

So what does housing discrimination look like now? Examples include

  • Refusing to show immigrants houses in a predominantly white neighborhood
  • Charging higher rent/fees for applicants with young children 
  • Sexually harassing tenants or applicants 
  • Renting out apartment housing that is not accessible to disabled people
  • Refusing to repair a tenant’s unit because of their sexual orientation
  • Harassing a tenant or homebuyer because of their religious beliefs 
  • Denying protected classes access to amenities, services, or repairs

While the Fair Housing Act has deemed these behaviors illegal, they still occur and often go unreported. 

How Do We Stop Housing Discrimination?

So how do we end discrimination in housing once and for all? Unfortunately, this housing market issue is a symptom of a sickness in society. We may never be able to fully ensure that all fair housing laws are being followed. 

But as a future real estate professional, you can do your part by staying knowledgeable on discrimination and following best practices. Remember to always

  • Stay up to date on state and federal housing laws
  • Use appropriate language in property listings
  • Prepare to be tested at any time
  • Ensure sellers that you work with are following fair housing laws
  • Treat all clients equally

What to Know for the Real Estate Exam

For the real estate exam, it’s essential you are aware of the Civil Rights Act of 1866. Remember, these laws are what protect consumers and create a healthy real estate economy, and as a real estate professional, you must follow them.

Are you gearing up to take the real estate exam and become a warrior for free housing? The Civil Rights Act of 1866 set an important precedent, but there is still much more to learn!

That’s why you should check out our Real Estate Flashcards! Study up on key terms and help ensure a passing grade on the exam. Good luck! 

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