Final answer:
Blockbusting is the unethical practice where real estate agents induce panic sales among white homeowners by suggesting minority families moving in will lower property values, allowing speculators to buy and resell homes at unjust prices. It's related to other discriminatory practices like redlining and steering, and has significantly shaped residential patterns in the U.S.
Step-by-step explanation:
When real estate agents prey on the racial fears of white homeowners to persuade them to sell their homes quickly and for less than market value, this tactic is known as blockbusting. This unethical practice involves real-estate agents and speculators inducing a panic among white property owners in a neighborhood by suggesting that minority families moving in will cause property values to drop. As a result, white homeowners are convinced to sell their homes at depressed prices, which the speculators then resell at higher prices to minority families with limited housing options. This practice not only manipulates white homeowners but also exploits minority homebuyers and contributes to the perpetuation of segregated residential patterns.
Blockbusting would sometimes be part of a larger set of discriminatory practices, which included redlining and steering. Redlining is the systematic denial of various services by federal government agencies, local governments as well as the private sector, to residents of specific neighborhoods, often racially motivated. On the other hand, steering is the act of guiding homebuyers towards or away from certain neighborhoods based on their race.
These discriminatory practices have had long-lasting impacts on urban development, community composition, and the racial wealth gap in the United States. The Fair Housing Act of 1968 eventually outlawed practices like blockbusting, but the damage to neighborhoods and the urban landscape had been significant by that time.