In 1937 the six remaining white homeowners on this block, at 1737-1747 First Street, asked the court to nullify the covenant in their deeds and in those for 80-82 S Street, around the corner. The eight houses were part of a contiguous, L-shaped “row” built by Middaugh & Shannon 30 years earlier and sold with the same racial covenant in each deed. The S Street owners wanted to retain the covenant.
Black families already lived here on First Street and along all the 100 blocks immediately west of First, but not on Bloomingdale’s unit blocks between First and North Capitol. The white owners along First Street argued that the covenant no longer served its intended purpose. They wanted the freedom to sell to whomever they pleased, and black demand for houses here, along with the corresponding decline in white demand, meant they could command higher prices from African Americans.
The parties went to court, and in Grady v. Garland (1937) the court upheld the covenants. The court noted that the presence of “colored residents” in the houses along First Street would depreciate the value of the houses on S Street, since the houses had adjoining back yards. In addition, the covenant effectively created a “barrier against the eastward movement of colored population into the restricted area—a dividing line.” By declining to hear the case, the U.S. Supreme Court likewise continued to enforce residential segregation here.