Blockbusting was 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.
Resistance to this loss of cheap labor in the South meant that northern recruiters had to act in secret or face fines or imprisonment.
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.
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.
Restrictive covenants were also introduced in response to the influx of black migrants during the Great Migration and constituted clauses written into deeds that prohibited African Americans from buying, leasing, or living in white neighborhoods.
In 1917, in the case of Buchanan v. Warley, the Supreme Court of the United States voided the racial residency statutes that forbade blacks from living in white neighborhoods.
Real estate companies used deceitful tactics to make white homeowners think that their neighborhoods were being "invaded" by non-white residents,[6] which in turn would encourage them to quickly sell their houses at below-market prices.
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 tactics included: 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.
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.
"[2] In response to political pressure from sellers and buyers, states and cities legally restricted door-to-door real estate solicitation, the posting of "FOR SALE" signs, and authorized government licensing agencies to investigate the blockbusting complaints of buyers and sellers in order to revoke the real estate sales licenses of blockbusters.
[2] The Fair Housing Act of 1968 established federal causes of action against blockbusting, including illegal real estate broker claims that non-white people had or were going to move into a neighborhood, and so devalue the properties.
In the case of Jones v. Alfred H. Mayer Co. (1968), the U.S. Supreme Court ruled that the Thirteenth Amendment authorized the federal government's prohibiting of racial discrimination in private housing markets.
It thereby allowed black American legal claims to rescind the usurious land contracts (featuring over-priced houses and higher-than-market mortgage interest rates), as a discriminatory real estate business practice illegal under the Civil Rights Act of 1866, thus greatly reducing the profitability of blockbusting.
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.