(somber electronic music) - A new survey finds Minneapolis's St. Paul is one of the worse places for black Americans to call home.

- The racial inequity in this state is horrific.

- When we think about wealth and equality in the United States today, that's directly attributable to our problems associated with housing and the denial of housing.

The inability of African-American's to acquire wealth in the same way that other groups were able to by virtue of having access to affordable housing, is one of the problems that impact those communities of color today.

- About 75% of white families own the homes that they occupy, about 25% of black families own the homes that they occupy.

That's actually the largest, in terms of percentage, gap in the country.

(somber piano music) - [Yohuru] The major impediment to civil rights for African-American's economic opportunity, are these racially restrictive covenants.

Private contracts between individuals that allow them to dictate to whom they'll sell their property.

(somber piano music) - Covenants exist across the country and Minneapolis.

The covenants were first put in in 1910.

At that point developers could start buying up large sections of farmland that adjoined the city.

- [Kevin] And when they started selling off the individual lots, that's really when the racial covenants kind of injected into the property record.

- [Penny] Racial covenants tells you who can or cannot live, lease, even occupy, certain spaces.

100% of these covenants are aimed at African-Americans.

(somber electronic music) - The FHA, they made color-coded maps of all the largest cities in the United States, and they broke cities down into four different areas.

Red is considered hazardous.

That's the worst.

Yellow is considered definitely declining, blue is considered still desirable, and green is considered the best.

So areas that were predominantly African-American, a majority, minority, or really, in a lot of cases, even if there's a few non-white people there, that's often enough to be red-lined.

The FHA refused to give an area of green-lined designation, again, this is the best designation that they'll offer, unless, and I'm quoting again, restrictive covenants are already in place.

That line's from the FHA underwriting manual.

- In a lot of ways, the practice of red-lining which didn't start until the 1930's, institutionalized and spread racial covenants all over the country, because suddenly developers got sanctioned, they direction from the Federal governments saying, this is best practices.

- Our community was red-lined.

Simple as that.

Now, as a community, we made the best of it, and we produced a great many influential people as well.

And a lot of that came from having developed a pretty powerful community.

(somber electronic piano music) Fourth Avenue was now referred to as Crack Avenue.

Up and down Fourth Avenue, throughout the neighborhood, there were tough times.

- [Kirsten] There's a very persistent myth that Northern cities never had formal segregation.

The South had Jim Crow, and look at those signs, well, racial covenants did the work of Jim Crow in the North, all over the North.

- So even though covenants are now illegal, kind of this, you know, yawning chasm of wealth and equality that emerges as a result of covenants is still very much with us today.

Identifying racial covenants however, has proved remarkably challenging.

The only way to find racial covenants are to read warranty deeds.

We're looking at about three million deeds the end up in county between 1900 and 1960, and each deed on average, runs about 3 pages.

So we're in the ballpark of 10 million or so pages of text.

So, what we're doing with Mapping Prejudice, is we're using digital tools to help us identify the deeds that do contain racially restrictive covenants.

We ask volunteers to help us transcribe them.

And those answers, I then export, and this actually gives me enough data to build a map.

- There's actually two catagories, it's business industrial that are undeveloped... - With this data set that the Mapping Prejudice team has built, we asked the question, how have racial covenants affected present day social economic outcomes.

- And the results that we find are that covenants were a way to lift the house prices by keeping people of certain races and colors out.

What we find it a causal link between covenants and the past and three present day social-economic outcomes.

We find that houses that were covenanted in the past have, on average, 15% higher house values today compared to houses that were not covenanted.

We also find that covenanted areas have lower African-American residents, and lower African-American home ownership rights compared to areas within Minneapolis that did not have covenants.

- [Kevin] I think it can make very powerful arguments about how can we reframe contemporary policy if you're more of an equity lands, to help mitigate some of this damage that's resulted from racial covenants.

- [Kirsten] And I want everyone with this map to imagine themselves in this landscape of privilege and disenfranchisement.

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