What is blockbusting and why is it illegal?

• A. Inducing property sales by exploiting fears about protected classes; illegal under the Fair Housing Act
• B. Marketing to only one protected class; illegal
• C. Charging higher rents to certain groups based on race but legal in some states
• D. Advertising properties only to buyers of a single gender; illegal

Answer: (A)

Blockbusting is a discriminatory real estate tactic in which an agent tries to get homeowners to sell by signaling that a protected class is moving into the neighborhood and that this will cause property values to drop. This method relies on fear and stereotypes about protected characteristics, which the Fair Housing Act prohibits because it pressures people to sell based on who may move into the area. Because it uses coercion and manipulation to affect housing choices, it can lead to civil penalties, damages, and potential license discipline for the real estate professional. The other examples describe illegal discriminatory practices, but blockbusting specifically centers on exploiting demographic changes to push sales, which is why it is illegal.