The facts: In 1945, a black family by the name of Shelley purchased a house in St. Louis, Missouri. They did not know, but an agreement -- called a restrictive covenant -- had been in a part of the deed on the property since 1911. The restrictive covenant barred black or Asian persons from owning that house. The neighbors sued to restrain the Shelleys from taking possession of the property.
The Supreme Court of the United States considered two questions. (1) Are (race-based) restrictive covenants legal under the Fourteenth Amendment of the United States Constitution? (2) Can they be enforced by a court of law?
The court held that, technically, restrictive covenants are legal because (at least in 1948) private agreements to exclude persons on the basis of race did not offend the Fourteenth Amendment. The 14th Amendment only prevents public, state-sponsored discrimination.
However, the Supreme Court held that it would be unconstitutional for a court to enforce a restrictive covenant. A court is obviously a public body, and as such, is subject to the Fourteenth Amendment.
This decision brought about common interest developments (CIDs), where residents share in the cost and maintenance of services and amenities held in common. Owners are held to the covenants, contracts, and restrictions (CC&Rs) of the community. It, however, cannot exclude based on race, ethnicity, or gender.