Illinois Real Estate Practice Exam

What does block busting refer to in real estate?

1. A method of creating neighborhood maps

2. Developing large city blocks into residential areas

3. Encouraging city block parties

4. Panic peddling - members of a protected class are moving in

The correct answer is: Panic peddling - members of a protected class are moving in

Block busting refers to the practice of panic peddling, which occurs when real estate agents or other individuals induce homeowners to sell their properties quickly, often at a reduced price, by instilling fear that members of a protected class (such as racial or ethnic minorities) are moving into the neighborhood. This tactic exploits the fears and biases of current homeowners to generate sales and often leads to racial or economic segregation within communities. This practice is illegal and falls under various fair housing laws designed to protect individuals from discrimination based on race, color, religion, sex, national origin, familial status, or disability. Recognizing that block busting is an unethical tactic helps individuals in the real estate profession understand the importance of promoting diversity and inclusivity in housing opportunities. The other options do not capture the essence of the practice, as they refer to neutral or positive concepts unrelated to the actual harmful practice of block busting.