New law prevents dominant retailers from using restrictive property deeds to lock communities out of grocery stores and pharmacies.

Olympia, Washington — This week, Washington Governor Bob Ferguson signed legislation banning restrictive land covenants used by large retailers to block grocery stores and pharmacies from opening in properties they once occupied, making Washington the first state in the country to outlaw the practice statewide. These so-called “negative use” covenants are often attached when chains close or sell stores and can prevent another grocery store or pharmacy from opening at the same site for years or even decades, locking out competitors and leaving communities with an empty building where essential services once stood. The American Economic Liberties Project praised the law as a major step toward restoring competition in local retail markets and tackling one of the structural drivers of food and pharmacy deserts.

“Large retailers have been using restrictive covenants to block competition for years,” said Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “Washington just became the first state to say corporations cannot abandon a community and then prevent anyone else from stepping in to serve it. This is a simple step that restores competition and helps bring grocery stores and pharmacies back to neighborhoods that need them.”

Restrictive covenants have long been used by dominant retailers such as Walmart to protect market share by blocking competitors from opening in locations they once occupied, sometimes for decades at a time.

Washington’s new law removes that barrier, making it easier for independent grocers, regional chains, and community-based pharmacies to open stores and restore access to food and medicine in underserved neighborhoods.

“This law recognizes that food deserts are not just a planning problem. They are often the result of concentrated corporate power,” Garofalo said. “Dominant retailers are clinging to empty spaces long after they’ve left, squeezing both their competition and local communities.”

Washington cities including Seattle, Bellingham, and Kent previously enacted local restrictions on the practice following investigations by state officials. The new statewide law builds on those efforts and establishes a consistent rule across Washington. Similar bills are under consideration in other states, such as Rhode Island, California, and Arizona, where advocates hope movement will take place this year.

“State leaders across the country are looking for practical ways to restore competition and bring essential services back to underserved communities,” Garofalo said. “Washington has now shown that states can act to remove artificial barriers that keep grocery stores and pharmacies out of neighborhoods that need them. The only question that remains is who will be next.”

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; international trade arrangements that promote balanced trade and benefit workers, farmers and small businesses; and wealth is broadly distributed to support equitable political power.