Blockbusting
The illegal practice of scaring homeowners into selling cheaply by suggesting that people of a certain race, religion, or other protected group are moving into the neighborhood, so the broker can profit from the turnover.
Key Takeaways
- Blockbusting means persuading owners to sell or rent by making representations about people of a protected class entering the neighborhood.
- Washington bans blockbusting in RCW 49.60.223, and the ban reaches any person acting for profit, not only licensed brokers.
- An attempt is enough. RCW 49.60.223 covers a person who induces or attempts to induce a sale, so no property has to change hands for a violation to occur.
- Steering directs buyers toward or away from neighborhoods, while blockbusting pushes current owners to sell. They are separate fair housing violations.
What It Means
Blockbusting is a fair housing violation aimed at the people who already live in a neighborhood. A person profits by convincing owners that the makeup of the block is about to change, then collects the listings and commissions when those owners sell in a hurry and below market. The pitch can be a postcard, a phone call, or a remark dropped at a showing. What makes it unlawful is not the sales effort. It is tying that effort to who is moving in.
The representation at the center of the practice concerns a Protected Class, such as race, creed, color, national origin, sex, sexual orientation, families with children status, or disability. The person making the pitch does not have to succeed, because the statute reaches the attempt as well as the completed sale. The harm the law targets is the loss of a stable, integrated neighborhood, plus the equity owners give up when fear rather than the market sets the price.
Blockbusting sits beside Steering and Redlining as one of the three classic discriminatory patterns tested on the license exam. Each attacks housing choice from a different direction.
How It Works in Washington
Washington's ban lives in RCW 49.60.223, part of the Law Against Discrimination. It makes it an unfair practice for any person, for profit, to induce or attempt to induce any person to sell or rent any real property by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, creed, color, sex, national origin, citizenship or immigration status, sexual orientation, families with children status, honorably discharged veteran or military status, or any sensory, mental, or physical disability. Notice the reach of that language: any person, not only a licensee, and any real property, not only homes.
The Human Rights Commission has written the rule down to the level of a neighborhood prospecting letter. WAC 162-36-020 bars a solicitation suggesting that the solicitor, buyer, or seller has the power to control the type or character of the person to whom the property may be sold, a solicitation that invites discriminatory feelings or action, and one that appeals to unspecified community standards that would exclude a protected class. That is the test a farming piece has to survive before it goes in the mail. Related conduct in the same chapter, such as refusing to transmit a bona fide offer or falsely reporting a property unavailable, is covered by RCW 49.60.222.
Example
Dana Whitfield holds one listing on Cedar Lane in Everett and wants five more. She mails 120 neighbors a postcard that reads: The demographics on Cedar Lane are shifting fast, call me before values slide. Three owners call her. Two list at $525,000 each, roughly $40,000 below the range a defensible Comparative Market Analysis would have set, and Dana earns $15,750 across the pair at a 1.5 percent listing side.
Dana never named a race, and she did not have to. The postcard tied a sales pitch to who is moving in, which is a representation about prospective entry into the neighborhood, and mailing it was already an attempt to induce a sale. The two closings are evidence of harm, not the trigger for liability. Under RCW 49.60.223 the violation happened the day the mailer went out.
Common Mistakes and Exam Traps
- Blockbusting and steering get swapped on the exam. Blockbusting pressures current owners to sell, while steering limits where a buyer is shown property.
- A completed sale is not required. Washington's statute covers an attempt to induce a sale, so the solicitation by itself can be the offense.
- A real estate license is not required either. RCW 49.60.223 applies to any person acting for profit, including an investor buying directly from owners.
- Blockbusting is not redlining. Redlining is a lender or insurer denying service across a whole area, while blockbusting is a for-profit push to make owners sell.
Where you'll learn this
Frequently Asked Questions
Is a blockbusting pitch still illegal if the statement about the neighborhood happens to be true?
RCW 49.60.223 prohibits inducing a sale by representations regarding entry or prospective entry into the neighborhood of people in a protected class. The statute sets out no exception for statements the speaker believes are accurate, so an accurate sounding pitch carries the same exposure.
What is the difference between blockbusting and steering?
Blockbusting works on owners, pushing them to sell by talking about who is moving in. Steering works on buyers and renters, limiting the neighborhoods or units they are shown. Both are unfair practices under Washington's Law Against Discrimination.
Does a neighborhood prospecting letter break the rule just by mentioning who lives nearby?
WAC 162-36-020 targets solicitations that suggest someone can control the type or character of who buys the property, that invite discriminatory feelings or action, or that appeal to unspecified community standards. A mailer that sticks to price, condition, and market data does none of those things.