How Real-Estate Brokers Can Profit From Racial Tipping Points

Until 1956, brokers were expected to follow the code of ethics set forth by the National Association of Real Estate Boards: Don't try to sell houses in white neighborhoods to black homebuyers. Full stop.

For more than 30 years, the code read: "A realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individuals whose presence will clearly be detrimental to property values in that neighborhood."

Such an ethics code helped white homeowners to preserve their all-white neighborhoods in the face of change, especially in the North and West over the course of the Great Migration. Only in 1948, with the Supreme Court's decision in Shelly v. Kraemer, were states prohibited from enforcing these restrictive covenants.

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