Definition
Blockbusting is an unlawful and unethical real estate practice that emerged mid-20th century where real estate agents and developers induced homeowners to sell their properties at low prices by creating fear that racial minorities would soon move into the neighborhood, causing property values to decline. The practice not only perpetuates racial segregation but also exploits and destabilizes communities financially and socially.
Examples
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Historical Context: In the 1960s and 1970s, some real estate agents in American cities like Chicago, Detroit, and New York engaged in blockbusting. They targeted white neighborhoods by suggesting that an influx of African American families was imminent, which would lower property values and lead to increased crime and deteriorating schools. The agents then purchased these homes at reduced prices and sold them at a profit to African American families or other minority groups.
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Legislation Influence: The Fair Housing Act of 1968 was instrumental in combating blockbusting practices. It prohibited discrimination concerning the sale, rental, and financing of housing based on race, color, religion, sex, or national origin. Despite the law, enforcement remained a challenge, but it marked a significant step towards curbing such practices.
Frequently Asked Questions
What is the key aim of blockbusting practices?
The main objective is to buy properties at a low price by exploiting racial tensions and sell them at a higher price, often to minority families, thus gaining substantial profits.
How has legislation impacted blockbusting?
The introduction of the Fair Housing Act in 1968 significantly curbed blockbusting by outlawing discriminatory practices in housing. Continuous amendments and improved enforcement have further helped reduce occurrences of such practices.
Why is blockbusting considered a discriminatory practice?
Blockbusting relies on and exacerbates racial fears and prejudices to create financial gain, resulting in reinforcing segregation and inequality in communities.
What are the consequences of blockbusting on communities?
It often leads to rapid turnover in property ownership, destabilizes neighborhoods, reduces property values, drives out long-term residents, and fosters economic and racial segregation.
Can blockbusting occur in other forms today?
While explicit blockbusting as practiced in earlier decades is less common due to legal prohibitions, subtler forms of market manipulation and racial steering can still have similar effects.
Related Terms
- Redlining: A discriminatory practice where services (financial and others) are withheld from potential customers who reside in neighborhoods classified as ‘hazardous’ to investment, predominantly those inhabited by racial minorities.
- Steering: The practice by real estate agents of directing prospective buyers towards or away from certain neighborhoods based on race or ethnicity.
- Fair Housing Act: U.S. legislation passed in 1968 that aims to eliminate discrimination in housing practices and promote integrated communities.
Online References
- U.S. Department of Housing and Urban Development - Fair Housing Act Overview
- Encyclopedia of Chicago - Blockbusting
- National Fair Housing Alliance
Suggested Books for Further Studies
- “The Color of Law: A Forgotten History of How Our Government Segregated America” by Richard Rothstein
- “Not in My Neighborhood: How Bigotry Shaped a Great American City” by Antero Pietila
- “Crabgrass Frontier: The Suburbanization of the United States” by Kenneth T. Jackson
Fundamentals of Blockbusting: Real Estate Ethics Basics Quiz
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