Question 7

A licensee urges homeowners to sell before members of a certain ethnic group move into the neighborhood.

This situation exemplifies blockbusting, as it involves a licensee encouraging homeowners to sell their properties based on the fear that an ethnic group will alter the neighborhood's demographics, which can lead to a decrease in property values.

A) A licensee urges homeowners to sell before members of a certain ethnic group move into the neighborhood.

This option correctly describes blockbusting, which is a practice where real estate agents exploit racial fears to drive property sales. By urging homeowners to sell in anticipation of ethnic change, the licensee manipulates market dynamics through discrimination.

B) A licensee directs prospective buyers only to properties owned by others of the same race.

This option describes a discriminatory practice, but it is more aligned with steering rather than blockbusting. Steering involves guiding individuals to specific neighborhoods based on race, which does not necessarily reflect the fear-induced selling that characterizes blockbusting.

C) A lending institution buys all of the houses on a block.

This scenario does not illustrate blockbusting. Instead, it describes a situation where a lending institution is acquiring properties, which may not involve any element of racial manipulation or fear among existing homeowners.

D) A lending institution adheres to a blanket policy of refusing to make mortgage loans on any property in a particular neighborhood.

This option represents a discriminatory lending practice, but it does not depict blockbusting. Refusing loans based on neighborhood characteristics could harm buyers but does not involve encouraging current homeowners to sell due to fears about racial changes.

Conclusion

Option A is the only choice that accurately reflects the concept of blockbusting, highlighting the manipulation of homeowners' fears regarding ethnic changes in their neighborhood. Other options, while they illustrate forms of discrimination, do not fit the definition of blockbusting, which specifically involves urging sales based on racial or ethnic fear. Thus, A is the definitive answer as it encapsulates the core issue of blockbusting accurately.