Blockbusting and the Challenges Faced by Black Families in Building Wealth through Housing in the Postwar United States
(Revised August 2023)
We study the impacts of blockbusting, i.e. large-scale racial turnover of urban neighborhoods orchestrated by realty professionals using aggressive and discriminatory practices. In large U.S. cities, we compare neighborhoods subjected to blockbusting to other similar neighborhoods mostly in the 1950s-1960s. We find that blockbusting caused substantially lower house values in 1980 and 1990. To understand the mechanisms, we analyze property-level data in one neighborhood of Baltimore, Maryland. We find that new residents that purchased their properties through blockbusters were charged higher prices and had higher foreclosure rates than new residents that purchased directly from existing property owners..
