I found this article about "Block Busting" in the Edmonton Sun. If you haven’t heard of this practice before, the article basically claims that certain neighbourhoods in Edmonton are being targeted by shady individuals who artificially lower property values, only to buy up the homes and sell them later for more money.
The article specifically refers to speculators who buy homes and rent them out to drug dealers, who then cause havoc in the neighbourhood forcing home owners to sell. Property values in the neighbourhood drop, and as more homes sell, the speculators continue to buy them up, filling them with more shady characters and further lowering values.
Eventually they flip the land for re-development and make a fortune.
Const. Ryan Lawley of the Edmonton Police Service said that noneighbourhood is immune from the practice…"This is a real issue," he told Sun Media. It’sbecome so prevalent, that this spring the EPS will hold a trainingsession so cops can spot the signs of block busting before it destroysa neighbourhood."
I have to admit, I find this difficult to believe. There would be a high level of orchestration required, plus a lot of patience and capital.
"Michael Walters, who used to work with the Community Action Project,which hands out the dubious Slum Landlord of the Year award, said thatwhile block busting has caused serious problems in some neighbourhoods,he wasn’t aware of anyone successfully buying up entire city blocks yet."
I tried to find some more information on this but couldn’t. Wikipedia has an entirely different definition of blockbusting that relates to racial demographics.
To be honest, I’m not sure who to believe, but it is certainly believable that property values can be affected when undesirable neighbours move in.
