Leasing License Practice Exam

What illegal practice involves steering minorities toward or away from properties?

1. Panic Selling

2. Blockbusting

3. Redlining

4. Coercive Renting

The correct answer is: Blockbusting

The illegal practice that involves steering minorities toward or away from properties is known as blockbusting. Blockbusting refers to the unethical tactic used by real estate professionals where they induce panic selling from homeowners in predominantly white neighborhoods by suggesting that minority groups are moving into the area. This can result in the sale of properties at lower prices, which are then resold to minority families at significantly higher amounts, often leading to further racial segregation and discrimination. Blockbusting was prevalent before the Fair Housing Act of 1968, which was established to prevent such discriminatory practices. It is an example of how manipulation of market dynamics can lead to racial bias in housing. The techniques used in blockbusting not only contribute to systemic inequality but also damage community cohesion by exploiting fears related to race and neighborhood change. While other options like panic selling, redlining, and coercive renting may relate to housing discrimination, they describe different actions or impacts. However, blockbusting specifically captures the process of steering individuals based on race by creating a market reaction that is rooted in discriminatory practices.