Date: Mon, 21 Oct 1996 09:26:56 -0400 (EDT)
From: Susan Chase

My interest in land ownership focuses on restrictive deed covenants. In 1995, I completed a Ph.D. dissertation entitled THE PROCESS OF SUBURBANIZATION AND THE USE OF RESTRICTIVE DEED COVENANTS AS PRIVATE ZONING, WILMINGTON, DELAWARE, 1900-1941.

In regard to the project under consideration, my research might prove useful in at least two regards. First, when suburban property was marketed in the first half of the century, the developers insistently used the idea of home and home ownership as an important selling point. As early as 1902, a real estate company operating in the Wilmington area declared "In a rented house you cannot enjoy a real home." It is important to know that no one could build a house/home until the lot on which that structure was to stand had been fully paid for. Thus, to own a home meant that one first had to own land.

Second, developers who sold suburban building lots frequently encumbered those small parcels of land with restrictions by including covenants in the deeds. Of the seventy subdivisions that I sampled in my research, 83 percent had one or more restrictive covenants. The real estate interests cited the restrictions when they marketed the land, for example, advertising in that restrictions "insure a harmonizing effect" and that they would "keep up the value of your holdings in this tract."

The covenants enabled developers to shape both the physical and the social landscapes of the suburbs. On the physical side, deed provisions such as building setback lines designated how close to the streets houses could be built. Lot sizes controlled the density of construction in a particular subdivision. These provisions insured that the landowners who purchased building sites would be living in an environment distinctly different from the city with its closely set or contiguous houses set directly on the sidewalk. On the social side, undoubtedly the most important deed restrictions were those that banned sales to persons of particular races. As early as 1917, Wilmington's suburban developers included in their deeds prohibitions against sales to non-Caucasian buyers. Given the understanding of "Caucasian" at the time, this effectively banned all buyers except people of northern and western European origin. At least two developments limited sales to "members of the Aryan branch of the Caucasian race."

Suburban deed covenants were offered by real estate developers with the assurance that the restrictions would protect property values. They were accepted by buyers, willing to take ownership of their parcels of land without absolutely total power to do with the land what they wished, because they apparently believed that accepting the restrictions insured a neighborhood that would remain attractive both in terms of the houses and gardens next door and the "compatibility" of the folks who lived there.

Third, not as emotionally gripping as racial restrictions, but of some substantial interest is the story of financing home ownership prior to the advent of the New Deal in the mid1930s. Early in the century, building lot prices ranged from less than $100 to $500 or more, available at $10 down and $1 a week. Paying for a lot could take two or three years after which an owner contracted with a builder to have a house erected. Here began the financial maneuvering. Before the Federal Housing Administration came into being in 1934, most banks could lend only 50 to 60 percent of the value of a property on a first mortgage, written for up to seven years with a 6 percent interest rate. A down payment of 30 percent was usual and the balance needed for house construction was covered by a second mortgage on which the interest rate was 10 percent for a loan of one year, 15 percent for two years, and 20 percent for three, the maximum time limit for such a mortgage.

To accumulate the needed funds, families cobbled together flimsy financial structures which sufficed as long as money was plentiful and lenders were willing to renew mortgages at expiration. But when money was tight, as it was at the end of the 1920s, lenders wanted repayment, not renegotiation, and borrowers, already at their fiscal limits, lost their houses to foreclosure. The number of foreclosure sales rose as mortgages holders demanded payment from families unable to come up with the money necessary to save their investments.

All this changed, of course, when FHA-insured mortgages held out to many, although certainly not all, Americans the hope of owning land and a house thereon. [Those excluded, of course, were African-American buyers, summarily excluded by the FHA underwriting guidelines.]

Susan Mulcahey Chase
Wilmington, Delaware


This WWW page was created by Wendy Plotkin ( in 1998 and updated on 1 September 2003.




This abstract was originally posted to H-Urban (the H-Net network on urban history) earlier in 1996. Susan Chase, who received her Ph.D. from the University of Delaware in 1995, agreed to allow the abstract in a slightly revised form to this site. -- W. Plotkin, H-Urban Co-Editor