It’s desirable to presume in present society that discrimination based on race is long gone. It pretty much is, at least with regards to the housing industry. Things were once different, though. It wasn’t so long ago that real estate transactions were marred by racial, ethnic and religious minority discrimination. Since many white property owners had unjustified prejudices, they were being tricked as a result.
Real estate agents and building developers once employed blockbusting as a crucial business practice. Enticing white homeowners to sell their properties below market value was basically blockbusting’s absolute goal. African Americans, Jews, Latinos and other discriminated against minority groups were fraudulently rumored to be moving into formerly all-white communities.
White house owners dreaded that their property worth would take a drastic hit if these racial, ethnic and religious minorities moved into their once racially-segregated neighborhoods. Real estate brokers and business developers took advantage of these unjustified worries to make substantially bigger money off properties than they would have by legitimate property selling techniques. Investors or property developers were able to buy homes at cheaper than market value prices. Brokers would then get a bigger commission for their part in fraudulently influencing white house owners to sell their land at such a low price.
Blockbusting as a business technique was made possible after World War II. This was instigated both by legally acceptable real estate methods of the time as well as the dismantling of the former legally-protected racially segregated neighborhoods in the United States. Brokers and others were no longer able to prey on the misguided worries of white house owners worried about the possibility of losing money in their property investments, once previously segregated neighborhoods were instructed to be open to all potential house buyers.
Today, the method of Blockbusting is very rare and punished under the full extent of the law. The 1980s saw the disappearance of blockbusting as a practice because of modifications in laws. The federal Fair Housing Act was just one of many, and specific states enhanced protections against discriminatory housing and real estate deal practices of their own accord, at the same time. It is interesting to note that some states have more inclusive and defensive laws for minority groups than even federal defenses boast. A state’s own governmental website is the best location to look for data on state-specific housing laws.