What Is Blockbusting In Real Estate? (Question)

“Blockbusting” refers to the efforts of real-estate agents and real-estate speculators to trigger the turnover of white-owned property and homes to African Americans.

Contents

What is an example of blockbusting in real estate?

Examples of blockbusting include: When real estate agents alert the members of a neighborhood that it is “changing” and that they should sell their property. Making house-by-house telephone calls urging member of a neighborhood that they should sell before their property values decrease.

What does blockbusting mean in terms of real estate?

Blockbusting refers to the practice of introducing African American homeowners into previously all white neighborhoods in order to spark rapid white flight and housing price decline. Real estate speculators have historically used this technique to profit from prejudice-driven market instability.

What is blockbusting and steering in real estate?

There are various controversial acts related to real estate practices that often infringe upon rights and quickly become illegal. Explore the practices of redlining (discrimination), blockbusting (pressuring to sell cheap), and steering (pushing for race-specific neighborhoods).

What is the cause of blockbusting?

Blockbusting occurs when real estate professionals convince homeowners to sell their properties for cheap prices for fear that shifting demographics will cause them to depreciate in value. White flight and blockbusting typically happen simultaneously.

Which of the following is an example of blockbusting?

An example of blockbusting would be a real estate agent hiring a Black woman to walk her dog in an all-White neighborhood. They then place their real estate card in all the mailboxes on the block, offering to buy the house right away at a discounted price.

What is blockbusting and redlining?

blockbusting. An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of minorities into the area. redlining. The practice of a lender to refuse to lend in a specific area, often based on the minority makeup of the area.

What is a panic peddling?

Panic peddling refers to a profitable ploy by unscrupulous real estate agents who suggest to homeowners that they move before their property values decline because the neighborhood`s racial composition is changing.

What is conversion in real estate?

Definition of “Conversion in Real Estate” The legal definition of conversion is the act of using property or funds with which one has been entrusted for purposes other than those for which the property was intended to be used by those who entrusted it.

Is blockbusting legal?

First and foremost, blockbusting, also sometimes referred to as “panic selling,” is a discriminatory and illegal real estate practice. It involves convincing property owners to sell their homes based on the assumption that a new neighbor will change the socio-economic makeup of the neighborhood.

When did blockbusting occur?

Blockbusting was a real estate practice that took place in the US during the late 20th century, particularly after the end of World War II. This practice was triggered first by the 1917 Supreme Court decision in Buchanan vs. Warley, which made racially segregating residential laws illegal.

Does blockbusting still exist?

“Blockbusting” has been illegal since the Fair Housing Act of 1968. Yet racial segregation remains a “defining feature of American cities.” “Blockbusting” emerged as a result. The practice of blockbusting has been illegal since the Fair Housing Act of 1968.

Where did blockbusting take place?

The term blockbusting might have originated in Chicago, Illinois, where real estate companies and building developers used agents provocateurs. These were non-white people hired to deceive the white residents of a neighborhood into believing that black people were moving into their neighborhood.

Is profit a factor in blockbusting?

(b) In establishing a discriminatory housing practice under this section it is not necessary that there was in fact profit as long as profit was a factor for engaging in the blockbusting activity.

What is redlining in real estate?

In the United States, redlining is a discriminatory practice in which services (financial and otherwise) were withheld from potential customers who resided in neighborhoods classified as ‘hazardous’ to investment; these residents largely belonged to racial and ethnic minorities.

What Is Blockbusting in Real Estate?

It is a tactic of coercing homeowners into selling or renting their properties at a lesser price by fraudulently convincing them that the neighborhood’s socioeconomic demography is shifting as a result of new groups of people moving in and that this transition would have an impact on the value of their property. Since the passage of the Fair Housing Act in 1968, it has been unlawful to participate in blockbusting practices.

What Is Blockbusting?

First and foremost, blockbusting is a violation of the law. In other words, it is the process of encouraging homeowners to sell their properties at a reduced price by lying and claiming that the socioeconomic mix of their area is changing and heading in a direction that the homeowners may find objectionable. A real estate agent or landlord informing White homeowners that Black people are moving into the neighborhood, a Christian homeowner informing Jewish families that they are moving into the area, or whatever else, is unfortunate.

In reality, it will have no effect on the value.

How Does Blockbusting Work?

As an example of blockbusting, consider the case of a real estate agent who hires a Black lady to walk her dog in a predominantly white area. They then post their real estate card in all of the mailboxes on the street, stating that they are willing to purchase the house immediately at a reduced price. The purpose is to persuade the property owners that they are there to assist them since the value of their homes will decrease as a result of the entrance of new groups of people into the neighborhood.

When Did Blockbusting Become Illegal?

Treatment of a person differently because they are a member of a certain group of people is prohibited by law. Any action that has anything to do with housing must be conducted in an equitable manner, regardless of the group of persons involved. The Federal Fair Housing Act was adopted in 1968 in response to the problems of blockbusting and redlining in the housing market. It provides explicit protection from discrimination for seven groups of persons. People cannot be discriminated against on the basis of the following characteristics:

  • Color, disability, familial position, national origin, race, religion, and sexual orientation are all factors to consider.

Discrimination in renting, selling, and mortgage financing is prohibited by this act, which was signed into law in 2010. It is prohibited to use any of these characteristics in an attempt to persuade residents to sell their houses, a practice known as blockbusting, in accordance with the Federal Fair Housing Act. If you or someone you know feels they have been a victim of housing discrimination, they can submit a complaint with the Department of Housing and Urban Development (HUD).

You should also verify your state’s laws to make sure you are following them. The Fair Housing Act protects seven fundamental characteristics, although many states also have their own fair housing statutes that protect specific categories of persons in addition to the seven original characteristics.

Other Illegal Real Estate Practices

Additionally, according to the National Association of Realtors (NAR), there are additional prohibited real estate activities that brokers are not permitted to participate in. Real estate agents are supposed to follow specific regulations and laws that are outlined in the Code of Ethics and Standards of Practice for the industry. Some of the things they are supposed to refrain from doing are as follows:

  • In order to get a listing, agents must mislead homeowners about the market worth of their house. Providing false information to purchasers or tenants regarding savings or other benefits
  • They are taking their time in submitting proposals on their clients’ behalf
  • Breaching their client’s confidential connection without their knowledge
  • Managing the property in a manner that might jeopardize the rights, safety, and health of renters and others is strictly prohibited. They are withholding information that is relevant to their customer.

When a bank, credit union, mortgage business, or other lender refuses to lend to a homeowner because of his or her race, ethnicity, religion, sexual orientation, national origin, or marital status, it is considered redlining. Additionally, a practice known as reverse redlining occurs when lenders target certain communities when promoting high-cost or predatory mortgages to potential borrowers.

Factors That May Actually Decrease Property Value

Blockbusting is a criminal offense. The value of your home will not be diminished as a result of large groups of individuals moving into your community. In actuality, there are a number of reasons that might contribute to a drop in the value of your home. For example, failing to keep up with property care is one of the contributing factors. Overgrown landscaping will have a negative impact on the price you will be able to advertise your home for when you decide to sell. Cutting the grass will improve the appearance of your house’s curb appeal, allowing you to charge a slightly higher price because the property seems to be well-maintained.

These considerations are as follows:

  • Mortgage rates: When mortgage rates rise, consumers find themselves unable to receive as much value for their money as they formerly did. The same property that they would have been able to purchase before interest rates were raised may now become unaffordable due to the additional monthly payments they will be required to make. Because of this, you may have to cut your home’s price in order to attract the same buyer in order to sell it. Weather: If a natural catastrophe strikes the region in which your home is located, the value of your home may be drastically reduced. If a hurricane hits a region that has never seen flooding before, the result might be catastrophically high waters. Your home may now be categorized as being in a flood zone, which will make consumers more hesitant to make a purchase decision. It will be more difficult to sell your home for the highest possible price. The presence of a short sale or foreclosure in your area is another factor that might cause your home’s value to diminish. An appraiser will utilize similar properties in your community to evaluate the worth of your home while attempting to assess the value of your property. Even if the comparable properties are short sales, the appraiser will still consider them to determine the value of your house, resulting in a decrease in the value of your home.

If there are a big number of short sales or foreclosures in your community, potential buyers may be hesitant to purchase in your neighborhood. It’s possible that they’re concerned about the neighborhood’s declining quality.

Key Takeaways

  • Blockbusting is a criminal offense. It is the process of informing a homeowner that the value of their house will fall as a result of a movement in the socioeconomic demography of their area
  • If you or someone you know feels they have been a victim of housing discrimination, they can submit a complaint with the Department of Housing and Urban Development (HUD). Mortgage rates, weather and natural catastrophes, as well as short sales and foreclosures, are all real elements that might have an impact on the value of your house.

What Is Blockbusting in Real Estate? A Guide for Real Estate Investors

Real estate has traditionally been the preferred investment for people seeking to accumulate long-term wealth for their families and future generations. By subscribing to our complete real estate investment guide, you will receive assistance in navigating this asset class. The practice of blockbusting, often known as “panic selling,” is a discriminatory and unlawful real estate activity, according to the Federal Trade Commission. Real estate agents must convince homeowners to sell their properties on the basis of the expectation that a new neighbor would alter the socioeconomic mix of the community.

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Keeping this in mind, continue reading to find out more about blockbusting as well as what you can do as a real estate investor to halt the practice in its tracks.

What is blockbusting in real estate?

In real estate, blockbusting occurs when a real estate broker convinces a homeowner to sell their home for a lower price based on the assumption that the neighborhood’s socio-economic makeup is about to change and thatproperty valueswill soon decrease. It is, at its core, one of the most discriminatory real estate practices available, and fortunately, it is now prohibited in today’s industry. Understanding what constitutes a blockbuster film can be difficult at the best of times. Consider the following illustration: In the event that a black person relocates to a predominantly white neighborhood, real estate agents begin informing white homeowners that the move is an indication of racial change.

Then, the same real estate agent turns around and sells the available listing to a black buyer at an inflatedproperty value.

In the past, this practice, along with redlining, was a major contributing factor to continued segregation after the passage of the Civil Rights Act.

Unfortunately, we are still dealing with the effects of these practices today,and it is still difficult for many racial minorities to gain access to affordable housing.

Blockbusting from a historical perspective

It’s important to remember that blockbusting was a rather regular practice in the not-too-distant past, even if the example provided above appears to be a little over the top at first glance. Because the occurrence of panic selling when a buyer of a different race or national origin moved into a neighborhood was so widespread, it was given the name “white flight” after the first time it was observed. In addition, numerous areas employed restrictive covenants to keep minority purchasers out of their neighborhoods.

Due to the fact that they were private agreements, they could not be outlawed in the same way that other discriminatory acts might be prohibited.

Unbelieveable as it may seem now, the restricted covenant was a fundamental component of the Federal Housing Administration’s underwriting handbook from 1933 through 1934.

Steering happens in real estate when an agent guides people of a specific race towards certain neighborhoods or away from others, as opposed to the general public.

Legislative action to prevent blockbusting

However, a number of pieces of legislation have been implemented in the intervening years to prevent blockbusting and other discriminatory real estate activities. In instance, the Supreme Court of the United States declared in theShelly v. Kraemercase in 1948 that racially discriminatory covenants were unlawful in a legal setting. When the Civil Rights Act of 1964 was passed, Title VIII, generally known as the Federal Fair Housing Act, was enacted as part of the act’s implementation. When the Fair Housing Act was passed into law, it made it illegal to discriminate in the purchase, rental, or financing of residential property.

However, President Biden recently signed an executive order extending protections under the act to members of the LGBTQ community, which was widely criticized at the time.

What real estate investors need to know about blockbusting

As a result of those safeguards, blockbusting in the classic sense has mostly gone out of favor. Even though we now have integrated communities in some parts of the country, prejudice continues to persist in other parts of the country. The most common manifestations are unwelcome solicitations concerning a certain piece of real estate or area, as well as unregulated conclusions about a specific individual. Examples include a real estate broker making disparaging remarks about the quality of a certain school system in a particular region or recommending various houses to a customer on the basis of a presumption about their family’s financial circumstances.

Even if these tactics are less obvious than their predecessors, they are nevertheless in violation of the law.

Otherwise, you may find yourself making some of those awful unwelcome solicitations, and you may find yourself on the receiving end of a legal action as a result of your actions.

The bottom line

However, just because blockbusting does not exist in the same manner as it did in the past does not mean that real estate operations are wholly devoid of discriminatory activities. To that end, it is critical that real estate investors devote the necessary time and effort to being familiar with the Fair Housing Act and the safeguards it offers for tenants. However, it is equally critical to assess your own personal biases and to commit to offering equal opportunity housing to everyone in your network.

Blockbusting – Wikipedia

It was an unethical commercial technique in which real estate salespeople and building developers enticed white homeowners in a certain region to sell their property at a discount to the market price, known as blockbusting. This was accomplished by instilling dread in the hearts of the homeowners by informing them that members of racial minorities would soon be migrating into their communities. The blockbusters would then resell those same properties at exorbitant rates to Blackfamilies looking to advance their economic status.

Because of changes in the legislation and the real estate market throughout the 1980s, it had almost completely gone in the United States.

Background

During the Great Migration, approximately 6 million African Americans from the rural South of the United States relocated to industrial and urban centers in the Northern and Western United States in an effort to avoid the Jim Crow laws, violence, bigotry, and limited opportunities of the South during the period 1900–1970 (Great Migration). Resettlement to these areas reached its zenith during World War I and World War II, when a decrease in European immigration caused a labor shortage in northern and western cities.

  1. Because of the opposition to the loss of cheap labor in the South, northern recruiters were forced to operate in secret or face fines or incarceration.
  2. As a result of the flow of black citizens into metropolitan areas across the United States, and in part as a result of the congestion of cities, racial and socioeconomic tensions rose across the country.
  3. In the aftermath of World War I and World War II, black troops returned home and struggled to find suitable housing and employment in the locations where they had been stationed during their service.
  4. The neighborhoods in which non-whites were permitted to dwell were inferior.
  5. Several families were frequently crammed into a single living space.
  6. Beyond being denied equitable access to the housing market, blacks were forced to work in the lowest-paying and most dangerous jobs, as well as being denied membership in many labor organizations.
  7. Many white homeowners in the United States considered blacks to be a social and economic danger to their communities, as well as a challenge to the preservation of racial homogeneity.

They were extremely concerned about allowing one black family to move into their area because they took great care in their homes and frequently saw them as a life investment.

Many cities used municipal zoning regulations to keep their areas from becoming racially mixed in order to avoid this from happening in the first place.

The introduction of restrictive covenants in response to the influx of black migrants during the Great Migration was also a response to the influx of black migrants.

Racial discrimination and law both served to reinforce this idea in the need of maintaining neighborhood homogeneity.

Roosevelt in 1934, established the Federal Housing Administration, which is still in operation today (FHA).

On these maps, neighborhoods were labeled according to their quality, with A neighborhoods denoting higher-income areas and D neighborhoods denoting lower-income neighborhoods, respectively.

This strategy, known as redlining, provided white people with an economic incentive to keep black people out of their neighborhoods.

Warley that racial residence restrictions prohibiting blacks from residing in white districts were unconstitutional.

A loophole was established in this case, however, when whites used racially restricted covenants in deeds, and real estate firms used them informally to prohibit the sale of property to black Americans in white communities.

Warleyprohibition of such legal business racism in the wake of the case.

Kraemer, decided in 1948, the Supreme Court determined that the Equal Protection Clause of the 14th Amendment prohibited the states from enforcing racially discriminatory covenants in state courts under the terms of the amendment.

Following the Supreme Court’s lifting of legal prohibitions, non-whites were able to purchase residences that had previously been designated for white inhabitants alone.

Real estate agencies employed deceptive techniques to convince white homeowners that their areas were being “invaded” by non-white people, which in turn encouraged them to sell their homes at below-market rates in order to make a rapid profit on their investments.

As a result of redlining, African-Americans were frequently denied mortgages from banks and savings and loan organizations, among other institutions.

For a long time, land installment contracts were predatory arrangements in which purchasers made payments directly to sellers over a period of time in order to receive legal title to a house only after the entire purchase price had been paid.

Using the practice known as “blockbusting,” real estate companies were able to legally profit from arbitrage, which is the difference between the discounted price paid to frightened white sellers and the artificially high price paid by black buyers whose homes were frequently foreclosed on as a result of these unfair contracts.

They also gained from the fees generated by increased real estate sales, as well as from the fact that they were able to provide financing for black home buyers at rates higher than the market.

Methods

The phrase “blockbusting” is said to have originated in Chicago, Illinois, when real estate businesses and building developers employed provocateurs to disrupt construction projects. The persons in this group were non-white individuals who were recruited to trick the white residents of an area into believing that black people were migrating into their neighborhood. Due to the rapid departure of economically successful minority populations to better areas outside of the ghettos, the properties that were empty as a result of this practice were able to be filled more quickly.

On the West Side and South Side of Chicago, blockbusting was the most common type of crime.

The strategies employed were as follows:

  • Hire black women to be seen pushing baby carriages in white neighborhoods in order to instill white fear of devalued property
  • Hire black men to drive through white neighborhoods while their radios are blaring
  • Hire black youth to stage street brawls in front of white homes in order to instill white fear of an unsafe environment sales of houses to black families in middle-class white neighborhoods to provoke white flight, before the community’s property values plummet
  • Sales of white neighborhood houses to black families and the distribution of fliers offering quick cash for houses
  • Developers purchasing houses and buildings and leaving them vacant to give the appearance of an abandoned neighborhood – such as the aghettoor aslum

As a result of these actions, the surviving white inhabitants were often scared into selling their properties at a loss, which resulted in their losing their homes. Following the use of one of the aforementioned strategies, real estate salespeople would post their cards in the mailboxes of scared white inhabitants, offering to purchase their homes at a lower price on an instant basis. White property owners were targeted by these agents with the hope of persuading them that their property prices would drop due to the inflow of new minorities into their plots.

A large number of black customers were forced to pay these excessive prices as a result of a lack of affordable housing choices accessible to them.

The city of Chicago, for example, had more than 100 real estate businesses by 1962, when blockbusting had been a prevalent practice for almost fifteen years.

Reactions

In 1962, The Saturday Evening Post published an article titled “Confessions of a Block-Buster,” which explained how realtors made money by scaring white Americans into selling their homes at a loss in order to quickly relocate to racially segregated “better neighborhoods” in order to quickly resettle in those neighborhoods. Several states and cities have passed laws restricting door-to-door real estate solicitation, the posting of “FOR SALE” signs, and empowering government licensing agencies to investigate blockbusting complaints from buyers and sellers in order to revoke the real estate sales licenses of those who engage in blockbusting activities.

Because of the Fair Housing Act of 1968, federal causes of action against blockbusting were formed, including the use of unlawful real estate broker assertions that non-white individuals had or were about to move into an area, therefore devaluing the houses.

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The Supreme Court of the United States held in the case of Jones v.

Mayer Co.

It thereby made it possible for black Americans to file legal claims to rescind usurious land contracts (which included overpriced houses and higher-than-market mortgage interest rates), which was a discriminatory real estate business practice prohibited by the Civil Rights Act of 1866, and thus significantly reduced the profitability of blockbusting operations.

  1. As a consequence, it was determined that municipalities cannot ban a property owner from posting a “FOR SALE” sign in front of their home, even if doing so lowers blockbusting.
  2. v.
  3. Furthermore, during the 1980s, as proof of blockbusting operations began to go away, states and towns began to repeal legislation prohibiting blockbusting practices.
  4. As more black citizens came into regions, white residents who were escaping the “blighted” districts of inner cities sought to migrate to suburbs, which were far away from the “blighted” neighborhoods of inner cities.

This was combined with increasing taxes on inhabitants who were obliged to remain in cities in order to make up for the diminished tax base, thus worsening their already poor financial situations….

Popular culture

“The Blockbuster,” a 1971 episode of the serious-comedy television series All in the Family(1971–1979), was devoted to the practice and featured demonstrations of real estate blockbusting tactics. Andrea Hairston’s historical fantasy novel Redwood and Wildfire, published in 2011, depicts actors being hired for blockbusting projects in Chicago, as well as the sense of betrayal felt by others when they realized that some black people were making money by participating in these exploitative schemes.

See also

  • Racism, redlining, urban regeneration, and white flight are all topics covered in this course.

References

  1. James M. Rubenstein is the author of this work (2014). The Cultural Landscape: An Introduction to Human Geography is a textbook written for undergraduate students (tenth ed.). It is published by Pearson Prentice Hall (ISBN1-56639-147-4)
  2. Abcdefg Dmitri Mehlhorn is a composer and musician from Germany. Dmitri Mehlhorn’s music is influenced by the music of Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian Bach, Johann Sebastian (December 1998). “A Requiem for Blockbusting: Law, Economics, and Race-Based Real Estate Speculation” is a book written by the author of “A Requiem for Blockbusting.” abWilkerson, Isabel. Fordham Law Review, vol. 67, no. 1145–1161
  3. Cf. This article is titled “The Long-Lasting Legacy of the Great Migration.” The Smithsonian Institution’s magazine. “Africana Age – Intro”, wayback.archive-it.org, retrieved on December 9, 2020. Retrieved2020-12-09
  4. “Buchanan v. Warley,” Wikipedia, 2020-12-03, retrieved2020-12-09
  5. “Shelley v. Kraemer,” Wikipedia, 2020-12-02, retrieved2020-12-09
  6. T. J. Segrue, T. J. Segrue & Associates (2014). The Causes and Consequences of Urban Crisis Princeton University Press, Princeton, New Jersey
  7. Boston is home to the Federal Reserve Bank of Boston (2017-04-13). “Land Installment Contracts: The Newest Wave of Predatory Home Lending Endangers Communities of Color,” a report by the Center for Investigative Reporting. The Federal Reserve Bank of Boston is a financial institution that was established in 1913. Retrieved2020-12-09
  8. s^ Business, complete bio Twitter is a good place to start. Erin Eberlin was a contributing writer for The Balance. Eberlin, real estate investment
  9. Small
  10. Management
  11. Covering rental
  12. Acquisition
  13. Tenant
  14. Eberlin, real estate investment She has over 16 years of expertise in the real estate industry. Review the editorial policies of The Balance. Erin. “Can You Explain What Is Blockbusting in Real Estate?” Small Business: Finding the Right Balance abGaspaire, Brent. “Blockbusting.” Retrieved on December 9, 2020. Retrieved2020-12-09
  15. “Jones v. Alfred H. Mayer Co.”, Wikipedia, 2019-09-24, retrieved2020-12-09
  16. “Linmark Associates, Inc. v. Township of Willingboro,” Wikipedia, 2019-08-11, retrieved2020-12-09
  17. “Linmark Associates, Inc. v. Township of Willingboro,” (12th of April, 2021). “‘Them’ is not based on a true story, although there are allusions to American history throughout the film.” Decider.com. The New York Post published an article on April 14, 2021, which was retrieved.

Further reading

  • Orser, W. Edward (1994)Blockbusting in Baltimore: The Edmondson Village Story (Lexington: The University Press of Kentucky)
  • Pietila, Antero (1994)Blockbusting in Baltimore: The Edmondson Village Story (Lexington: The University Press of Kentucky)
  • Orser, W. Edward (1994)Blockbusting in Baltimore: The Edmondson Village Story (2010) Not in My Neighborhood: How Bigotry Shaped a Great American City(Chicago: Ivan R. Dee)
  • Seligman, Amanda I. Not in My Neighborhood: How Bigotry Shaped a Great American City(Chicago: Ivan R. Dee)
  • Seligman, Amanda I. (2005) Block by Block:Neighborhoods and Public Policy on Chicago’s West Side (Chicago: University of Chicago Press)
  • Ouazad, Amine (Block by Block:Neighborhoods and Public Policy on Chicago’s West Side). The Journal of Economic Theory published a paper titled Blockbusting: Brokers and the Dynamics of Segregation in the May 2015 issue of Volume 157, pages 811–841
  • Rothstein, Richard. (2017) The Color of Law: A Forgotten History of How Our Government Segregated America is a book on the history of how our government segregated America. This is the first edition.

External links

It is the practice of real estate agents persuading homeowners to sell their homes for low prices out of concern that the neighborhood’s socioeconomic demographics are changing and would result in a reduction in property values. These real estate speculators make money by taking advantage of homeowners’ racial or class prejudices and then reselling the houses at inflated prices to new buyers.

Blockbusting

  • This occurs when real estate experts persuade homeowners to sell their houses for low prices out of worry that changing demographics would cause their properties’ value to deteriorate. White flight and blockbusting are two events that frequently occur at the same time. In the context of racial minorities moving into a community, white flight refers to the evacuation of whites leaving the neighborhood in large numbers. Prior to 1962, blockbusting was a common occurrence in Chicago, and the city is still markedly divided on the basis of race. Blockbusting became less widespread after the Fair Housing Act of 1968 was passed, but African Americans continue to endure housing discrimination and possess homes that are significantly less valuable than those owned by white people.

White Flight and Blockbusting

Blockbusting and white flight have historically been used in conjunction with one another. White flight is the term used to describe the widespread evacuation of white people from areas when a Black family (or members of another ethnic group) moves into the neighborhood. Over the course of decades, segregation in residential communities resulted in whites and blacks not being able to dwell in the same neighborhoods. Because of racial prejudice, the presence of a Black family on the street served as a warning to white residents that the area was about to degrade.

In many situations, it just took one Black family to persuade white residents to swiftly sell their properties, so depressing market prices in the process.

Gentrification occurs when members of the middle or upper classes displace lower-income residents from neighborhoods by driving up rent and home values and altering the culture or ethos of a community, as opposed to gentrification occurring when members of the middle or upper classes gentrify a neighborhood.

After looking beyond the white-Black dynamic, Indiana University sociologist Samuel Kye discovered that when Hispanics, Asian Americans, or African Americans begin to settle in middle-class communities that whites tend to depart.

This suggests that race rather than socioeconomic status appears to be the most important factor in causing whites to place their houses on the market.

According to the findings of the study, 3,252 of 27,891 census tracts had a loss of at least 25 percent of their white population between 2000 and 2010, “with an average magnitude loss of 40 percent of the original white population.”

A Historic Example of Blockbusting

Blockbusting has been around since the early 1900s and reached its zenith in the decades after World War II. The practice has a long history in Chicago, which is still considered to be one of the most segregated cities in the country. The use of violence to keep the Englewood area white did not succeed, and it was eventually abandoned. The whites in the area were encouraged to sell their properties for a number of years previous to 1962, as advised by real estate salespeople in the area. On average, two to three Chicago blocks were affected by this strategy, which resulted in demographic alterations.

Property speculators who owned three adjoining properties immediately sold them to Black families as a result of the incident.

Within a short period of time, all of the white inhabitants had fled the area.

Blockbusting’s Impact

Historically, African Americans have paid a high price as a result of white flight. In fact, they were harmed by white homeowners selling their properties for low prices since speculators then sold those same homes for higher prices to them. In addition to placing homeowners of color in a dangerous position, this practice made it harder to get financing to upgrade their properties. It has been stated that landlords in communities affected by blockbusting took advantage of renters by failing to invest in improved living conditions for their new residents.

However, real estate speculators were not the only ones who benefited from the blockbusting boom.

As whites relocated to the suburbs, their tax revenues departed from metropolitan regions, causing the property market in urban areas to deteriorate even worse.

After the killing of the Rev.

Despite the fact that federal legislation has made blockbusting less obvious, housing discrimination has continued to exist. Properties in Black communities are worth much less than homes in white areas in cities such as Chicago, where racial segregation has persisted for decades.

Sources

  • Brent Gaspaire’s article “Blockbusting” is available online. BlackPast.org, 7 January 2013
  • Tom Jacobs, BlackPast.org, 7 January 2013. “White Flight Continues to Be a Reality.” Pacific Standard, 6 March 2018
  • Kye, Samuel H. Pacific Standard, 6 March 2018
  • “The Persistence of White Flight in Middle-Class Suburbia,” as the title suggests. Whet Moser’s Social Science Research was published in May 2018
  • Moser, Whet. “How White Housing Riots Shaped Chicago,” a book published by the University of Chicago Press. Chicago Magazine, April 29, 2015
  • Clare Trapasso, Chicago Magazine, April 29, 2015. “Racial Gap: Homes in Black Neighborhoods Are Worth This Much Less Than Homes in White Neighborhoods,” according to the article. Realtor.com, published on November 30, 2018

Blockbusting •

Hillcrest, Washington, D.C., December 16, 2017: 34th Street and Camden Street in Hillcrest. Photo courtesy of Eric T. Gunther (Creative Commons Attribution 3.0) Blockbusting is the practice of bringing African American homeowners into historically all-white communities in order to cause fast white flight and a drop in the value of existing housing stock and properties. Historically, real estate speculators have utilized this strategy to profit from market volatility caused by discriminatory attitudes.

  • Residents who were afraid about losing their houses sold them to these speculators for a fraction of their market worth.
  • After years of being refused entry to mostly white communities, middle class African Americans were suddenly being granted admission at artificially inflated rates established by the speculators.
  • Because of the limited home alternatives available to these buyers, many were forced to accept the inflated prices they were forced to pay.
  • Because they were already burdened by high housing payments, they frequently found it difficult to get bank loans to perform necessary repairs to their new properties.
  • These issues increased the decline in house values as well as the loss of equity.
  • More black people came into a region, and the same number of non-black people moved away, creating a need for more white-only housing in other parts of town and suburban areas as more black people moved in.
  • Furthermore, the expansion of these suburbs resulted in a steady decline in municipal tax revenues as the value of the urban housing stock declined.
  • Despite the fact that blockbusting first appeared at the beginning of the twentieth century, the practice became particularly widespread in the decades immediately after World War II.
  • Nonetheless, blockbusting and other related acts continued even after the passage of the statute was repealed.

A simple payment would go a long way toward ensuring that this is available to everyone. Give up a beverage and contribute the money you would have spent on it to us in exchange for the knowledge you have just learnt, and feel good about your contribution to making it available to everyone!

Cite this article in APA format:

B. Gaspaire’s book (2013, January 07). BlackPast.org is a ground-breaking organization.

Source of the author’s information:

Kevin Fox is a writer and actor who lives in Los Angeles. W. Edward Orser’sBlockbusting in Baltimore: The Edmondson VillageStory (Lexington, Kentucky, 1994); Amanda L. Seligman’sBlock by Block: Neighborhoods and Public Policy on Chicago’s West Side (Chicago: University of Chicago Press, 2002); and W. Edward Orser’s Race, Real Estate, and Uneven Development: The Kansas City Experience, 1900-2000 (Albany, NY: State University of New York Press, 2002). (Chicago: University of Chicago Press, 2005).

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Blockbusting

“Blockbusting” refers to the efforts ofreal-estateagents and real-estate speculators to trigger the turnover of white-owned property and homes toAfrican Americans.Often characterized as “panic peddling,” such practices frequently accompanied the expansion of black areas of residence and the entry of African Americans into neighborhoods previously denied to them. In evidence as early as 1900, blockbusting techniques included the repeated—often incessant—urging of white homeowners in areas adjacent to or near black communities to sell before it became “too late” and their property values diminished. Agents frequently hired African American subagents and other individuals to walk or drive through changing areas soliciting business and otherwise behaving in such a manner as to provoke and exaggerate white fears. Purchasing homes cheaply from nervous white occupants, the panic peddler sold dearly to African Americans who faced painfully limited choices and inflated prices in a discriminatory housing market. Often providing financing and stringent terms to a captive audience, the blockbuster could realize substantial profits.Blockbusting depended upon a high degree of residential segregation and provided the means for transferring white property into black hands at a time when mainstream real-estate and financial institutions refused to sell to blacks or facilitate their movement into all-white neighborhoods. Even as late as 1951, major newspapers continued to run separate ads for “colored” housing, thus fostering, as well as reflecting, the conditions that gave rise to such market manipulation. Especially evident in the wake of black population increases associated with the first and secondGreat Migrations,the movement into newer, outlying neighborhoods was fueled by increased demand for housing on the part of blacks, the growing ability of a rising middle class to pay for it, and the desire for a better life and escape from the more impoverished sections of the urban core. Working virtually, if not covertly, in tandem, “respectable” real-estate agents flocked to do business in transitional areas once they had been broken by the maverick blockbusters. The net result was a gold-rush effect that destabilized residential communities as it maximized racial tensions and fears.Attempts to combat blockbusting and stabilize white ethnic neighborhoods culminated in the 1971 passage of a series of ordinances that prohibited the placement of “For Sale” and related signs on residential property. The Illinois Supreme Court ultimately ruled such measures unconstitutional. Subsequent efforts to thwart panic peddling included the promotion of home-equity insurance plans. Pioneered byOak Parkin 1978 in the effort to manage suburban integration, such proposals were picked up by neighborhood groups on the Southwest and Northwest Sides in an attempt to maintain the racial status quo. A coalition of such groups known as Save Our Neighborhoods/Save Our City (SON/SOC) emerged after Harold Washington’s 1983 election to push various home-equity insurance measures, including a referendum. A source of tension and racial polarization, the referendum passed in November 1988—under new state law and over city opposition—allowing the establishment of home-equity districts in selected precincts.BibliographyBennett, Larry.Fragments of Cities: The New American Downtowns and Neighborhoods.1990.Helper, Rose.Racial Policies and Practices of Real Estate Brokers.1969.Hirsch, Arnold R.Making the Second Ghetto: Race and Housing in Chicago, 1940–1960.1983.
The Electronic Encyclopedia of Chicago © 2005 Chicago Historical Society.The Encyclopedia of Chicago © 2004 The Newberry Library. All Rights Reserved. Portions are copyrighted by other institutions and individuals.Additional information on copyright and permissions.

Blockbusting · Racial Restriction and Housing Discrimination in the Chicagoland Area · Digital Chicago

Early in the 20th century, as African Americans attempted to relocate to residential neighborhoods outside of the state-created racial zones, real-estate salespeople and real-estate speculators fueled more racial anxieties as a commercial technique in order to acquire and sell homes. It was called as “Blockbusting” at the time, and it was used to induce European American residents to sell their property and homes to African Americans for less than they were worth. In order to convince these property owners to sell their houses before it was “too late” and the property’s value had decreased as a result of the entrance of African Americans in the area, real estate brokers and speculators sometimes utilized aggressive techniques such as “panic-peddling.” In order to generate exaggerated fears among European-American homeowners about an impending racial change in their neighborhood, such agents frequently hired African Americans and other minorities to walk or drive through these “white neighborhoods” pretending to be home buyers or business solicitors.

When realtors purchased such homes at a low cost from homeowners who believed or bought into the fear mongering, they were able to sell them at high prices to African Americans who were faced with highly restricted housing alternatives, as well as restrictive financing and other requirements.

The arrival of African Americans in neighborhoods that had previously been denied to them through political and legal strategies was viewed as a serious problem that real-estate professionals could exploit to make handsome profits at a time when racial segregation was legalized in the United States and racial animosity against African Americans characterized the cultural climate of the United States, European Americans.

Definition of blockbusting

This reflects grade level depending on the word’s difficulty. / ˈblɒkˌbʌs tɪŋ/ This reflects grade level depending on the word’s difficulty. noun the profiteering real-estate practice of buying property from white majority homeowners below market value, based on the implied threat of future depreciation during minority integration of historically segregated communities. QUIZ ARE YOU A TRUE BLUE CHAMPION OF THESE “BLUE” SYNONYMS?

We could chat until we’re blue in the face about this quiz on words for the color “blue,” but we believe you should take the quiz and find out whether you’re a wiz at these colorful terminology. Which of the following terms describes “sky blue”?

Words nearbyblockbusting

Block association, blockboard, block booking, blockbust, blockbuster, blockbusting, block capital, block caving, block chord, block coal, block coefficientDictionary.com has the definition for block association, blockboard, block booking, blockbust, blockbuster, blockbusting, Unabridged Random House, Inc. 2021, based on the Random House Unabridged Dictionary, Random House, Inc.

How to useblockbustingin a sentence

  • He couldn’t communicate in English, and my high school German was woefully poor, especially when combined with a blockbusting hangover.

British Dictionary definitions forblockbusting

When racial minorities dwell in a neighborhood, it is common practice to induce the sale of property at a low price by leveraging the owners’ worries of lower prices if racial minorities live in the neighborhood. Complete Unabridged Digital Edition of the Collins English Dictionary, published in 2012. William Collins Sons Co. Ltd. was established in 1979 and 1986. In 1998, HarperCollinsPublishers published the following books: 2000, 2003, 2005, 2006, 2007, 2009, and 2012.

Blockbusting

Blockbusting is a heinous and unlawful racial commercial activity that should be condemned. The following is an example of how Blockbusting works: a real estate agent, or someone posing as one, approaches a homeowner and instills fear of racial minorities in him (or her), claiming and displaying fabricated statistics that a large number of whatever minority the homeowner was prejudicially concerned about was moving into their neighborhood in large numbers. This would force the homeowner to sell at a lower market price, and the supposed real estate agent would then sell at a higher market price to the precise minority that the original owner feared would purchase the house.

Profiteers took advantage of the fact that the scars of the Civil War and slavery were still visible, and they even hired “actors” to create the impression of an overwhelming presence of black people in typically white communities in order to increase their profits.

As a result, more stringent federal real estate rules were enacted, making blockbusting more difficult to do.

Real Estate Advice: Only work with real estate brokers that are reputable! Obtain their contact information from the OFFICIAL Real Estate Agent Directory®.

Word-of-the-Week: Blockbusting

A nasty and unlawful racial economic activity, blockbusting is prohibited by law. To explain Blockbusting, consider the following scenario: a real estate agent, or someone impersonating one, approaches a homeowner and attempts to inspire fear of racial minorities in him (or her) by claiming, as well as showing, fabricated statistics that a large number of whatever minority the homeowner was prejudicially concerned about was moving into the neighborhood in large numbers. This would force the homeowner to sell at a lower market price, and the supposed real estate agent would then sell at a higher market price to the precise minority that the original owner feared would buy the house.

  1. Profiteers took advantage of the fact that the scars of the Civil War and slavery were still visible, and they even hired “actors” to give the impression of an overwhelming presence of black people in typically white areas in order to increase sales.
  2. Blockbusting became more difficult as a result of the creation of tighter federal real estate rules.
  3. Despite this, the Fair Housing Act of 1968 made it illegal for real estate agents to disclose the religion, color, and ethnicity of a neighborhood’s residents while showing a home to a prospective buyer client.
  4. Real Estate Advice: Only work with real estate agents that are reputable in their field.

What is blockbusting?

Blockbusting is the practice of a real estate licensee persuading a property owner to offer their home for sale in reaction to a shift in the neighborhood’s demographics. It is a forbidden activity. Think about a real estate salesperson that pushes a homeowner to sell their property for sale below market value by hinting that the neighborhood is seeing a shift in the attitudes of the locals. According to the broker, property values are set to collapse as a result of this anticipated change. The owner agrees to sell their property at a price below market value to an unethical broker, who then resells the property at a price that is in line with the true market worth of the property.

  • Insinuating that a neighborhood is undergoing or is about to undergo a change in the race, color, religion, sex, handicap, familial status, or national origin of its residents
  • Or discouraging an owner-occupant from offering their home for sale or rent by claiming that the entry of individuals of a particular race, color, religion, sex, handicap, familial status, or national origin will result in undesirable consequences.

Blockbusting is essentially synonymous with “panic peddling” or “panic selling,” with the key distinction being that, in the case of blockbusting, agents utilize panic selling explicitly with the purpose of generating financial gains.

However, it is not essential for an agent to have received a pecuniary benefit in order to engage in blockbusting action. Blockbusting can be established with only a profit motive as a driving force.

Related terms

Directing is described as an illegal housing activity that involves words or acts by a real estate licensee that are meant to influence the decision of a prospective buyer or tenant, so steering them in the wrong direction. An individual wishing to rent or buy a home in a town, neighborhood, or development may be denied the opportunity to do so if the guideline in place maintains segregated housing patterns. Redlining is described as the refusal to give finance or insurance to particular groups of people in specific locations.

Ownership is discouraged by lenders that decline mortgage applications based on the features of the neighborhood in which they are located.

History behind the Word

The term “blockbusting” first appeared in Chicago, Illinois, around the beginning of the twentieth century. It all started with a procedure in which white homeowners who lived in close proximity to Black neighborhoods were persuaded by real estate brokers and house developers to sell their properties before the value of their properties decreased. As a form of agent provocateur, agents and developers would regularly recruit African-American subagents who would walk their dogs or drive through predominantly white areas, causing a sense of panic among the locals.

With the passage of the Federal Fair Housing Act (FFHA) in 1968, blockbusting in any shape or form was completely abolished.

The FFHA prohibits the use of any discriminatory acts against a potential buyer or renter that a seller, landlord, or property management could conduct against that individual on the basis of that individual’s:

  • Race or color
  • Country origin
  • Religion
  • Sex
  • Familial status
  • Or any combination of these factors

It is prohibited by the Fair Housing Act (FFHA) for a seller, landlord, or property management to engage in unlawful discrimination against persons during the solicitation and negotiation of a home sale or rental. A landlord or property manager is not permitted to do the following:

  • Deny or negotiate the rental of a dwelling for prohibited discriminatory reasons
  • Apply different rental changes to a dwelling for prohibited discriminatory reasons
  • Employ discriminatory qualification criteria or different procedures for processing applications in the rental of a dwelling
  • Or evict tenants or tenants’ guests for prohibited discriminatory reasons

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