In 1917, city segregation codes became illegal as a result of the Buchanan v. Warley Supreme Court case. Legal residential segregation then moved into the realm of deeds and contractual agreements. The 1926 Supreme Court case Corrigan v. Buckley explicitly allowed racially restrictive covenants to be set up among parties entering into property agreements of their own volition. After this ruling, such arrangements became popular until Shelley v. Kraemer in 1948 relegated them into the legal twilight of "unenforceability," and the Fair Housing Act of 1968 finally rendered them illegal.
During the 1930's, as the federal government became involved in helping citizens purchase or rent homes, white people had access to new homes, which quickly appreciated in value, in neighborhoods from which people of other races were frequently barred. When non-whites benefited from housing subsidies, the housing they had access to was often old, substandard and unattractive, or was available only for rent, and thus did not enable the resident to build wealth. Relevant documents include the Underwriting Manuals published by the Federal Housing Administration (choose a year, enter the Full View document, and search it for the word "racial"). and the digitized Home Owners' Loan Corporation (HOLC) maps made available by the Mapping Inequality project.
