Fair HousingIntermediateCalifornia Exam

Blockbusting (panic selling) is the illegal practice of:

ARapidly selling foreclosed properties below market value, under federal and California fair housing law

BInducing homeowners to sell by suggesting that members of a protected class are moving into the neighborhoodCorrect

CBuying multiple properties to control a neighborhood's housing supply, as defined under the Fair Employment and Housing Act

DRefusing to show properties in certain zip codes, consistent with federal Fair Housing Act protections

Why Inducing homeowners to sell by suggesting that members of a protected class are moving into the neighborhood Is Correct

Answer B: Inducing homeowners to sell by suggesting that members of a protected class are moving into the neighborhood

Blockbusting is the illegal practice of inducing panic selling by telling homeowners that the character of the neighborhood is changing due to the influx of a protected group, thereby profiting from the resulting price decline. Blockbusting violates Section 804(e) of the Fair Housing Act, which prohibits inducing sales by representing that protected-class members are moving into the area.

Exam Tip: Fair Housing

Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.

Key Fair Housing Terms in This Question

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

Steering

An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.

Blockbusting

An illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.

People Also Study

Key Terms to Know

Blockbusting

An illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.

Steering

An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.

Redlining

An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.