Which practice involves encouraging homeowners to sell their properties due to fear of neighborhood changes?

Blockbusting is a practice that involves inducing homeowners to sell their properties at a loss by instilling fear about potential changes in their neighborhood, often related to demographic shifts. This technique is typically employed by real estate agents or developers who, by spreading rumors about the arrival of individuals from different racial or ethnic backgrounds, create a sense of panic among current homeowners. This fear can lead to a hurried decision to sell, often below market value, allowing the agents or investors to profit from purchasing properties in a distressed situation.

This practice not only exploits the vulnerabilities of homeowners but also contributes to reinforcing segregation and economic disparities in communities. Understanding blockbusting is essential to grasp the broader implications of discriminatory practices in housing and the legal frameworks designed to combat them.