What term describes the illegal practice of prompting homeowners to sell due to potential neighborhood changes?

Blockbusting is the term that describes the illegal practice of encouraging homeowners to sell their properties based on the fear of potential changes in the neighborhood, often related to demographic shifts. This practice exploits racial or socioeconomic anxieties and aims to create a sense of urgency among homeowners to sell, typically at lower prices. The intention behind blockbusting is often to facilitate the purchase of those properties by investors or developers who anticipate turning a profit from the neighborhood’s changing demographics.

In contrast, steering refers to directing homebuyers toward or away from certain neighborhoods based on their race, religion, or other protected characteristics, rather than spurring existing homeowners to sell. Redlining describes the discriminatory practice of denying services, typically mortgages or insurance, to residents of certain areas based on racial or ethnic composition, rather than directly influencing homeowners to sell. Panic selling is a more generic term that describes the hurried sale of property due to fear, but it does not specifically relate to the manipulation of homeowners based on neighborhood change.

Thus, using blockbusting denotes a clear and illegal tactic used to manipulate the real estate market by instilling fear in existing homeowners about their property's value due to potential changes in their neighborhood.