Blockbusting

Blockbusting is a business practice in the United States in which real estate agents and building developers convinced residents in a particular area to sell their property at below-market prices. This was achieved by fearmongering the homeowners, telling them that racial minorities would soon be moving into their neighborhoods. The blockbusters would then sell those same houses at inflated prices to black families seeking upward mobility.

Blockbusting became prominent after post-World War II bans on explicitly segregationist real estate practices. By the 1980s it had mostly disappeared in the United States after changes to the law and real estate market.

Research has documented how blockbusting harmed black wealth accumulation and contributed to the racial wealth gap, as homes bought by black households depreciated or stagnated in value.

History

From 1900 to 1970, around six million African Americans from the rural Southern United States moved to industrial and urban cities in the Northern and Western United States during the Great Migration in an effort to avoid the Jim Crow laws, violence, bigotry, and limited opportunities of the South. Resettlement to these cities peaked during World War I and World War II as slowing immigration from Europe created a labor shortage in northern and western cities. To fill war industries and shipyards, these cities recruited tens of thousands of black and white people, including those from the South. Resistance to this loss of cheap labor in the South meant that northern recruiters had to act in secret or face fines or imprisonment. Southern authorities tried to prevent black flight by arresting migrants at railroad stations and arresting them on the grounds of vagrancy. Racial and class antagonisms heightened across the urban United States as a result of this influx of black residents, and in part owing to the overcrowding of cities. The Great Migration highlighted racial divisions of the North that black Americans so desperately tried to flee from in the South: police killings of unarmed African American men and inequalities and biases in employment, housing, health care, and education. As black soldiers returned home in the aftermath of World War I and World War II, they struggled to find adequate housing and jobs in the cities that they had left. They were confined to the most decrepit and oldest housing stock in the least desirable yet most densely populated areas. The areas that non-whites were allowed to live in were substandard. This was in part because of the overcrowding, which was exacerbated by the Great Migration. Often, several families were crowded into one unit. Because non-whites were confined to these small areas of the city, landlords were able to exploit their residents by charging high rents and ignoring repairs. In addition to being refused equal access to the housing market, blacks were relegated to the lowest-paying, more dangerous jobs as well as being barred from joining many unions. Some companies would only hire these returning veterans and other black workers as strikebreakers, widening the divide between black and white workers further.

Housing in the United States had been segregated for a long time historically, this was not a new idea or reality. In an attempt to continue the path of racial segregation in housing, white homeowners in many U.S. cities regarded blacks as a social and economic threat to their neighborhoods and to maintaining racial homogeneity. Groups of black people would have to join forces and combine income to buy a residency, in turn when they sold their house, it would become cheaper and other black groups could then afford housing. Redlining also made it difficult to afford housing in good areas, which had a direct link to poor education. which in turn would encourage them to quickly sell their houses at below-market prices. The companies then sold that property to blacks who were desperate to escape inner-city ghettos at higher-than-market prices.

Owing to redlining, African-Americans usually did not qualify for mortgages from banks and savings and loan associations. Instead, they resorted to land installment contracts at above market rates to buy a house. Land installment contracts were historically predatory agreements in which buyers made payments directly to sellers over a period of time in order to obtain the legal title to the home only when the full purchase price had been paid. The harsh terms of these contracts and inflated prices often led to foreclosure, so these houses had a high turnover rate. With blockbusting, real estate companies legally profited from the arbitrage, the difference between the discounted price paid to frightened white sellers and the artificially high price paid by black buyers whose houses were often foreclosed on as a result of these unfair contracts. They also profited from the commissions resulting from increased real estate sales and their higher-than-market financing of house sales to blacks. The New Jersey Attorney General subsequently declined to investigate the allegations.

Methods

The term blockbusting might have originated in Chicago, Illinois, where real estate companies and building developers used agents provocateurs. These were non-white people hired to deceive the white residents of a neighborhood into believing that black people were moving into their neighborhood. The houses that became vacant in that way enabled accelerated immigration of economically successful racial minority residents to better neighborhoods beyond the ghettos. The white residents were encouraged to quickly sell, at a loss, and emigrate to more racially homogeneous suburbs. Blockbusting was most prevalent on the West Side and South Side of Chicago, and also was heavily practiced in Bedford–Stuyvesant, Brooklyn, New York City; in the West Oak Lane and Germantown neighborhoods of Northwest Philadelphia; and on the East Side of Cleveland.

The tactics included:

hiring black women to be seen pushing baby carriages in white neighborhoods to encourage white fear of devalued property
hiring black men to drive through white neighborhoods with their radios blasting
hiring black youth to stage street brawls in front of white homes to generate feelings of an unsafe atmosphere
selling a house to a black family in a middle-class white neighborhood to provoke white flight, before the community's property values decline considerably
saturating the neighborhood area with fliers offering quick cash for houses
developers buying houses and buildings, leaving them unoccupied to make the neighborhood appear abandoned – like a ghetto or a slum

Such practices can be described as psychological manipulation that usually frightened the remaining white residents into selling their homes at a loss. After utilizing one of the tactics above, real estate agents would place their cards in the mailboxes of frightened white residents, offering to buy their houses immediately at a discounted price. These agents aimed to convince white property owners that their home values would decline, owing to the influx of new minorities onto their blocks. After these white homeowners hurriedly sold their homes, middle-class African Americans were then offered admittance into white neighborhoods that had previously been denied to them at artificially inflated prices. Given the lack of housing options available to black buyers, many had no choice but to pay these exorbitant costs.

Blockbusting was very common and profitable. For example, by 1962, when blockbusting had been a common practice for some fifteen years, the city of Chicago had more than 100 real estate companies that had been, on average, "changing" two to three blocks a week.

The serious-comic television series All in the Family (1971–1979) featured "The Blockbuster" (Season 2, episode 8) a 1971 episode about the practice, illustrating some real estate blockbusting techniques.

In the 2011 historical fantasy novel Redwood and Wildfire, author Andrea Hairston depicts actors being hired for blockbusting in Chicago, as well as the sense of betrayal experienced by others when they realized some black people were getting rich by participating in these exploitative schemes.

The 2014 documentary Spanish Lake describes how blockbusting happened in the St Louis suburb of Spanish Lake, Missouri.

Blockbusting is portrayed in the 2021 Amazon Video series Them.

In the American sitcom The Wonder Years (2021), the episode "Blockbusting" explicitly talks about the phenomenon.

References

External links

http://www.encyclopedia.chicagohistory.org/pages/147.html

History

Methods

See also

References

Further reading

External links