27. Which of the following situations is an example of blockbusting?
Answer: A
A licensee urges homeowners to sell before members of a certain ethnic group move into the neighborhood.
This situation exemplifies blockbusting, which involves persuading homeowners to sell their properties under the pretext that property values will decline due to the arrival of individuals from a certain ethnic group.
A) A licensee urges homeowners to sell before members of a certain ethnic group move into the neighborhood.
This option accurately describes blockbusting, a practice where real estate agents exploit racial fears to encourage homeowners to sell their homes quickly, usually at lower prices, anticipating that the arrival of specific racial or ethnic groups will decrease property values.
B) A licensee directs prospective buyers only to properties owned by others of the same race.
This scenario depicts racial steering, which involves guiding buyers to homes based on their race rather than blockbusting. It does not involve the fear of declining home values due to neighborhood changes, thus it is not an example of blockbusting.
C) A lending institution buys all of the houses on a block.
While this action may raise concerns about neighborhood dynamics, it does not fit the definition of blockbusting, as it does not involve encouraging homeowners to sell based on racial or ethnic changes in the community.
D) A lending institution adheres to a blanket policy of refusing to make mortgage loans on any property in a particular neighborhood.
This describes discriminatory lending practices, which are separate from blockbusting. It does not involve persuading homeowners to sell due to fear of neighborhood change but rather reflects a refusal to finance properties based on location.
Conclusion
Option A is definitively the correct answer as it encapsulates the essence of blockbusting, a tactic that leverages racial fears to manipulate homeowners into selling their properties. The other options, while related to discrimination or real estate practices, do not involve the specific coercive element of blockbusting, which centers on inducing sales through the fear of demographic changes.