The illegal practice of bringing about panic selling in a neighborhood for financial gain is known as what?

The illegal practice of bringing about panic selling in a neighborhood for financial gain is referred to as blockbusting. This tactic involves real estate agents or developers inducing homeowners to sell their properties at low prices by instilling fear that the demographic composition of the neighborhood is changing. Often, this is done by falsely suggesting that minorities are moving into the area, leading current residents to worry about declining property values or a loss of community status.

The term blockbusting captures the essence of exploiting social anxiety for financial benefit, contrasting sharply with practices like redlining, which involves discriminatory lending practices, and steering, which refers to directing home seekers toward or away from certain neighborhoods based on their race or ethnicity. Down-zoning does not relate to these practices at all, as it pertains to regulatory land-use controls that can affect property development potential rather than the unethical practices surrounding real estate sales. Understanding blockbusting is crucial for recognizing predatory tactics within the realm of real estate and, ultimately, fostering fair housing practices.