1964 California Proposition 14

In 1948, the United States Supreme Court in Shelley v. Kraemer precluded judicial enforcement of racially restrictive housing covenants.[5] Prior to 1948, the California Real Estate Association (the eventual sponsor of Proposition 14) routinely promoted and enforced racially restrictive housing covenants to prevent family homes from ending up in the hands of minorities, particularly Negroes.[6]

Shortly following the 1948 court decision in Shelley, an item appeared in the California Real Estate magazine, a publication of the California Real Estate Association (the organization is currently named the California Association of Realtors) advocating an amendment to the United States Constitution that would overturn Shelley and constitutionally guarantee the legal enforcement of racially restrictive covenants throughout the United States.[7]

In advocating support for a federal constitutional amendment guaranteeing the legal enforcement of racially restrictive covenants, the California Real Estate Association publication stated that "millions of home owners of the Caucasian race have constructed or acquired homes in areas restricted against occupancy by Negroes. The practice of surrounding homes in such areas with the security of such restrictions has become a traditional element of value in home ownership throughout this nation."[8]

The publication further stated: "The recent decisions of the Supreme Court abovementioned have destroyed the values thus secured. The threat of occupancy by Negroes of property in such areas depreciates the value of all home properties and constitutes a direct deterrent to investment in the construction or acquisition of homes of superior quality whether large or small. The experience has been uniform that whenever and wherever Negroes have occupied homes in such areas this has not only depreciated values of the properties which they own, but has depreciated the values of all surrounding properties."[9]

In further support of the constitutional amendment, the publication stated: "Moreover, the prices of homes in such areas are well within the purchasing power of vast numbers of Negroes. These circumstances greatly aggravate the hazard to which such home owners are exposed. ... Additionally, the insistence of some Negroes upon moving into areas previously restricted exclusively to the occupancy of Caucasians will necessarily create racial tensions and antagonisms and do much harm to our national social structure."[10]

The federal constitutional amendment effort was unsuccessful, but the reasons for pursuing such an amendment provided insight into the underlying reasons for pursuing a future and similar protective state constitutional amendment in California.

Despite the court decision in Shelley, segregation in California continued. As an example, an insidious form of segregation known as blockbusting occurred in East Palo Alto. In 1954, a white resident sold his house to a black family. Almost immediately, agents of the California Real Estate Association began warning of a "Negro invasion" and even staged burglaries to panic white homeowners to sell at below-market prices. Those properties were then sold to Negroes at higher-than-market prices with real estate interests profiting from the transactions.[11]

The tipping point for the California Real Estate Association to pursue a state constitutional amendment in California was the enactment of the Rumford Fair Housing Act in 1963. In the minds of California Real Estate Association leaders, the Rumford Fair Housing Act directly threatened the financial interests of the real estate industry who came to see "the promotion, preservation, and manipulation of racial segregation as central -- rather than incidental or residual -- components of their profit generating strategies."[12]

Similar to Proposition 14, there have also been subsequent efforts by the real estate industry to promote ballot measures in California to generate more profits. Examples include the unsuccessful 2018 California Proposition 5[13] and 2020 California Proposition 19,[14] which has been criticized for not helping first-time homeowners who are disproportionately minorities[15] and for reinforcing racial inequity within California's tax system.[16]

The Rumford Fair Housing Act was passed in 1963 by the California Legislature to help end racial discrimination by property owners and landlords who refused to rent or sell their property to "colored" people.[17] It was drafted by William Byron Rumford, the first African American from Northern California to serve in the legislature. The Act provided that landlords could not deny people housing because of ethnicity, religion, sex, marital status, physical handicap, or familial status.[18] Governor Ronald Reagan opposed this and other legislative attempts to enact fair housing.[19]

In 1964, the California Real Estate Association (currently named the California Association of Realtors) sponsored an initiative constitutional amendment to counteract the effects of the Rumford Act.[20]

The initiative, numbered Proposition 14 when it was certified for the ballot, was to add an amendment (Cal. Const. art. I, § 26) to the constitution of California. This amendment would provide, in part, as follows:

Neither the State nor any subdivision or agency thereof shall deny, limit or abridge, directly or indirectly, the right of any person, who is willing or desires to sell, lease or rent any part or all of his real property, to decline to sell, lease or rent such property to such person or persons as he, in his absolute discretion, chooses.[21]

In California, housing segregation was rampant as a result of decades of racially discriminatory housing policies explicitly aimed at keeping people of color confined to urban ghettos and out of the expanding suburbs.[22] Proposition 14 attempted to re-legalize discrimination and associational privacy by landlords and property owners.

Soon after Proposition 14 was passed, the federal government cut off all housing funds to California. Many also cited the proposition as one of the causes of the Watts Riots of 1965.[37]

With the federal housing funds cut off and with the support of Governor Pat Brown, the constitutionality of the measure was challenged soon afterward. In 1966, the California Supreme Court did not consider whether Proposition 14 was unconstitutional because it violated the equal protection and due process provisions of the California Constitution; instead, it held that Proposition 14 violated the equal protection clause of the Fourteenth Amendment to the federal Constitution.[38] Gov. Brown's stance proved controversial; later in 1966, he was defeated in his bid for re-election by Ronald Reagan. However, Reagan opposed both Proposition 14 and the Rumford Act, and stated that Proposition 14 was “not a wise measure.”[39] Reagan labeled the Rumford Act as an attempt "to give one segment of our population a right at the expense of the basic rights of all our citizens."[40]

However, the case continued. The U.S. Supreme Court affirmed the California Supreme Court's decision in Reitman v. Mulkey (1967), holding that Proposition 14 was invalid because it violated the equal protection clause. The proposition was repealed by Proposition 7 in the November, 1974 election.[41]

Reitman established a significant precedent because it held that state assistance or encouragement of private discrimination violated the equal protection guarantee of the Fourteenth Amendment.