What illegal practice involves inducing homeowners to sell by making false representations about demographic changes in a neighborhood?

Blockbusting is the illegal practice that involves inducing homeowners to sell their properties by making false representations about demographic changes in a neighborhood. This tactic often capitalizes on the fears of current homeowners, suggesting that the influx of a different demographic group will lower property values or change the character of the neighborhood. By doing so, agents or investors attempt to purchase homes at a lower price and then resell them for a profit as the neighborhood transitions.

This practice is not just unethical; it is also illegal under fair housing laws. It was particularly prevalent in the mid-20th century, leading to significant social and economic consequences for communities. In contrast to other terms, redlining refers to discriminatory lending practices, steering involves directing clients to or away from certain neighborhoods based on race, and discrimination is a broader term that encompasses various unfair treatment in housing but does not specifically address the tactics used to induce sales like blockbusting does. Understanding blockbusting helps to recognize how harmful tactics exploit fears and perpetuate segregation within communities.