Blockbusting is a business practice to induce property owners to sell off their property easily. It is to be sold often at a loss in fear of depressed value or having to resell it at an inflated price. This was achieved by fearing the homeowners and telling them that racial minorities would soon take over the neighborhood. The blockbusters would then sell off the property at a lower rate to the black families in the society.
This trend gained prominence soon after World War II with massive changes in real estate practices. But by the 1980s, it had disappeared from the US, and at that time, there had been changes in the real estate market and law.
Blockbusting was showing consequences beyond the neighborhood. As more blacks moved into an area, an equal proportion of whites moved out. It demanded more white-only houses in other areas. This benefitted the mainline realtors and the developers as they got new buyers for the homes.
Furthermore, the growth of the suburbs indicated that there had been a decline in municipal tax as urban housing lost its value. The decline in municipal revenues also reduced the services with an increase in tax on the area remaining residents. This is how blockbusting was discouraged slowly and became illegal to be carried out any further.
The process of asking homeowners to sell off their property at low prices is not legal. The agents mainly convince them by telling them that the socioeconomic status in the society and norms of home possession are changing. So, it is better to sell off their property soon. Otherwise, they may not get a suitable property price later. Selling off property may take a different turn afterwards that they may not like.
It could be realtors or landlords convincing the white homeowner that the black people would be moving in their place. Here, they mainly tell a Christian homeowner that a Jewish family would move in. They say that the new groups moving into the locality may not give the property actual value. Following this, the law in real estate prevented further discrimination against people in selling, buying or property mortgage. This was when the Federal Fair Housing Act came into being.
This is treating an individual differently, and it became illegal. Everyone should get equal treatment when there is anything related to housing.
