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Eminent Domain – who benefits now?

Eminent Domain Gate And Wall by Steve Soblick via FlikrYou just gotta laugh.

Eminent domain — the “police power” that allows government to seize private property — is back in the news.

Only this time, it’s not being used to seize homes so a private corporation can build a “comprehensive redevelopment” project. (Remember the Supreme Court decision in Kelo?)

It’s not being used to seize farms so a private corporation can build a transcontinental pipeline. (Farmers are still fighting in Nebraska and Texas.)

It’s not being used to seize forest land so a private corporation can build a power transmission line. (New Hampshire now has new restrictions against that, anyway.)

Nope. This time, the mayor of a “Desperate California City” is proposing to use it to resolve a huge housing crisis. Nearly half of the mortgages in Richmond, California are “underwater”, with homeowners owing more than the houses are worth — and at high risk of foreclosure. But since the mortgage companies haven’t been willing to write down those loans, Richmond’s mayor wants to use eminent domain powers to seize the mortgages and have the city do it. The banks, of course, have gone to court to try to stop this. (Read more about the situation here.)

Gotta laugh. Kelo, if you remember, was all about using eminent domain to remedy urban blight and improve the tax base. (Of course, a private corporation was going to benefit handsomely in the process.)

Now, here’s this Mayor trying to use eminent domain to prevent urban blight and stabilize the tax base.

“She said she fears homeowners will begin to abandon their homes, leading to blighted neighborhoods and the draining of public coffers to the point of municipal bankruptcy experienced by Stockton, Calif., and Detroit. ‘The city is stepping in where Wall Street and where the federal government have been unable or unwilling to do so,’ she said.”

But this time, local residents — not the corporations — would benefit.

Anybody want to predict how this is going to turn out?

The Kelo project, by the way, did not turn out so well. Apparently, the private developer was not able to get financing for the project, and at last report the cleared land was being used as a dump.

Gotta wonder how all those homeowners feel now.




About Liz Iacobucci

Liz Iacobucci is the former Public Information Officer for the State Employees’ Association of New Hampshire, SEIU Local 1984. Over the past three decades, she has served in government at the federal, state and municipal levels; and she has worked for both Democratic and Republican politicians.
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