Definition of "Blockbusting"

Sue Ann Taubert real estate agent

Written by

Sue Ann Taubertelite badge icon

RE/MAX Elite

Blockbusting is a despicable and illegal racist business practice.

Here’s how Blockbusting happens: a real estate agent, or someone posing as one, comes to a homeowner and instills him (or her) with fear of racial minorities, saying and showing bogus stats that a large number of whatever minority the homeowner prejudicially feared was moving into their neighborhood in large numbers. Because of that, the homeowner would sell the property for a lower market price, and, in turn, the alleged real estate agent would sell at a higher market price to the exact minority the original owner feared.

The practice of blockbusting has been done to White, Black, Jews, and Foreign people, but the most notorious blockbusting practices were done with White and Black, after 1910 when over a million African American from the rural southern states of the United States of America moved north to industrialized cities in need of workers due to the World War I, which recruited many workers to serve in the US Army. The scars of Civil War and Slavery were still open, so profiteers would take advantage of that, and even hire “actors” to create a sense of overwhelming presence of black people in traditionally white neighborhoods.

Blockbusting practices were nationally exposed in the 1960’s with the civil rights movement. Because of it, stricter federal real estate laws were conceived, which made blockbusting harder. For instance: door-to-door real estate solicitation got restricted in several states to avoid blockbusting. The most important measure against blockbusting, however, was 1968’s Fair Housing Act which made (by law) religion, race, and ethnicity of a neighborhood’s inhabitants part of what a real estate agent can’t tell a home buyer client when showing a house.

Real Estate Tips:

Work only with credible real estate agents! Find one at The OFFICIAL Real Estate Agent Directory®.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Person chosen by a testator/testatrix to handle and conduct the terms of a will to an estate. Duties include collecting and selling of properties and paying debts of the state. ...

Commonly, a covenant refers to a legal treaty or agreement between various parties. Explicitly, a stipulation comes into existence and is signed to confine particular financial transactions ...

What Is a Real Estate Bubble? One definition for a real estate bubble is the fast increase in prices, usually driven by investors and speculators in major urban areas. Properties are ...

Document issued by a public or private institution to perform some activity according to legal requirements. There is usually a license fee. An example is a real estate license. ...

Loan mandating equal periodic payments to pay off the loan subsequent to the last payment. ...

A type of equity participation loan where, in exchange for charging a below-market interest rate, the lender receives a predetermined percentage of a any increase in value of the property ...

Early American architecture modeled after the English Georgian architecture having two or three stories with a rectangular design and ample ornamentation often including a widow's walk. ...

Market analysis method where sales of similar properties in proximity neighborhoods are compared. The comparable sales methodology is extremely useful if the properties being compared are ...

Also called interim financing. A mortgage that provides the funds necessary for the building or construction of a real estate project. The project can be a residential subdivision, a ...

Popular Real Estate Questions