5 votes

City to use Eminent Domain to Buy Underwater Homes.

Not sure what to think of this. I'm feeling conflicted. I don't know if I like the idea of Local Governments buying up houses, but I do like the idea of sticking it to the banks. Your thoughts?

"The power of eminent domain has traditionally worked against homeowners, who can be forced to sell their property to make way for a new highway or shopping mall. But now the working-class city of Richmond, Calif., hopes to use the same legal tool to help people stay right where they are.

Scarcely touched by the nation’s housing recovery and tired of waiting for federal help, Richmond is about to become the first city in the nation to try eminent domain as a way to stop foreclosures.

The results will be closely watched by both Wall Street banks, which have vigorously opposed the use of eminent domain to buy mortgages and reduce homeowner debt, and a host of cities across the country that are considering..."

http://www.nytimes.com/2013/07/30/business/in-a-shift-eminen...



Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Do you own your "Property"?

If you grant a 3rd party the power to seize the assets of your enemies, you grant the power to have your assets seized in return!

Eminent Domain grants ultimate ownership of ALL property to the state!

When drafting the United States Constitution, Thomas Jefferson - among others - favored eliminating all remnants of feudalism, and pushed for allodial ownership.

Unfortunately they faced opposition from others who may have been reluctant due to Condemnation powers being used by the former colonies during the revolution to confiscate the properties of loyalists and to cancel debts. If the new government lacked these powers, it could provide legal standing to those dispossessed during the revolution to reclaim their assets.

It was James Madison who opened the door to Eminent Domain - therefore legalizing it's use - by working a compromise into the Constitution (via the 5th amendment) by explicitly demanding compensation for seizures with the words: "nor shall private property be taken for public use, without just compensation".

Source:
http://www.coss.fsu.edu/economics/sites/coss.fsu.edu.economi...

Allodial Title:

"Most property ownership in the common law world is fee simple. Land is 'held of the Crown' in England and Wales and the Commonwealth realms. In the United States, land is subject to eminent domain by federal, state and local government, and subject to the imposition of taxes by state and/or local governments, and there is thus no true allodial land."

Legal Definition:
http://definitions.uslegal.com/a/allodial-title/

An Allod differs from a Feif when it comes to the REAL ownership of property under the law.

Do you actually own your property, or are you subject to fiefdom?

1st Plank of the Communist Manifesto:

1. Abolition of property in land and application of all rents of land to public purposes.

Generally, I agree with you

I am not a fan of eminent domain. If we lived free of Government interference, I would NEVER approve of a decision like this. In this case, however, I feel as though the parties we are talking about (my enemy) may as well be the government itself as their current existence is only made possible by the government. Had the Federal Government not bailed out the banking and financial institutions in the first place, they would have collapsed and these mortgages would have been renegotiated in bankruptcy. Additionally, the 0% loans provided by the Federal Reserve to the banks give them the ability to ignore typical free market forces that would compel them to renegotiate these loans.

So, in this case, I think an argument could be made that we would be giving a third party Government (a Local Government) the ability to seize the property of a 4th party Government (the Federal Government) who maintains possession of this property through illegitimate means. As I understand it, the proper role of government is to settle property disputes. In this case, I don't think that anyone can deny that the proper ownership of these properties is in dispute.

"When I say liberty I do not simply mean what is referred to as 'free enterprise.' I mean liberty of the individual to think his own thoughts and live his own life as he desires to think and to live..." - Robert A. Taft

This is my favorite topic. ;)

This is my favorite topic. It also happens to be the one topic in which I generally part ways from Ron Paul, Lew Rockwell, Gary North and the like. Perhaps that is why I find it my favorite topic. For a moment I am a rebel among rebels. :D

On a side note I think my perspective to be quite Misean [and Jeffersonian], and I regret that Rothbard is no longer with us as I believe, not that he would be aligned with my views, but he would understand the shortcomings of our banking system and would not be shy of highlighting the advantages of the parochial measures of public banking.

I'll get few detractors [if any] here at the DP in claiming that the fractional reserve banking scam rests on its capacity to create money out of thin air, but what sets it effectively in motion is its capacity to make loans against real property to purchase real property. As we have seen in the last decade, mortgages to acquire real estate make up the largest portion of the banking industry's foundation upon which rests their house of cards. It needn't have been this way, but it has been advantageous to the industry that all mortgages, including adjustable, are fixed, and as such have been fixing prices all along. Interest rates may adjust in an adjustable mortgage but property prices do not. No one complains during inflation, but deflation reeks utter havoc. When the property is a tulip bulb or copper, not everyone notices, but when it's land or real estate, everyone is affected.

Such havok may be somewhat thwarted by measures of hard money, 100% reserve banking, or even setting a new standard of unfixing mortgages, but these measures will never address another related issue touching the topic at hand, that of capital flight. I suppose I won't digress here down that road, but leave it to say that until we do tranform to the likes of hard money, full reserve, or new financial instruments, that localized public banking is our most legitimate remedy from looting and widespread suffering.

One year ago, San Barnadino County in California was juggling proposals similar to the ones currently juggled by Richmond. The NYT article lacks detail in Richmond's alternate financing proposals, so I will refrain from passing judgement as such. San Barnadino proposed trading rotten apples for potentially bruised oranges. They proposed using eminent domain to yank property from current lenders only to bundle them into a lending deal from an investment firm in San Francisco. Some good may have come from that, but much bad was equally potent. San Barnadino needed to establish their own county bank. The investment firm in San Francisco could have just as well invested in thier bank, but local control of lending terms would have been retained.

The use of eminent domain in this situation is not unconstitutional. The founders were wise to not write of it in the Constitution but for seeing to it that there be just compensation for it. End of story.

Eminent domain has always existed and always will. It is important to accept that and quickly move on to the issue of seeing that it is done properly and in the interest of benefit to the greatest good and not to the special interest of a few. The latter interest is what we get when we fight it accross the board, drop the ball, and lose our chance of making it generally beneficial. It seems counterintuitive to a libertarian at first when studying real estate law, that the concept of "Highest and Best Use" is tied to ancient writ of common law. In a republic eminent domain is tied to this this concept, and if the commons aren't the party to determine what's highest and best, kings, armies, and special interest will be the parties making such determinations.

I could go on and on about the advantages of city, county, and state banks, but I think I'll just cap it with providing a link or two to others who have spoken well in regard. I'll just add something that seems intuitive to me, something that resembles general principle. If we are to have government at any level, that government is going to handle money. That money needs to be held in and meted from a bank of some sort, lest it be looted. Treasuries are looted. This is not a promotion for "central banking", for that is a different creature.

hokey patriot presentation... :D
[The sound is terrible in this video only for the first three minutes. I haven't watched it in its entirety yet, but I shall directly.]
http://youtu.be/dTDhn8BYm6w

use of eminent domain...
[I disagree with this guy in his perspective that eminent domain is Constitutional, but I agree with him insomuchas my view that it is not unconstitutional.]
http://youtu.be/xPLEzylreLE

foremost pioneers of public banking...
[I don't pretend to adhere to all notions propagated by the folks at PBI, but hey, they are a consortium of diverse perspective themselves and are possibly wise to present unified effort in proposal.]
http://publicbankinginstitute.org/

FiresofFreedom's picture

Thank you for your informative comment

I dont know anything about real estate law but you described it on a level that I could grasp.

This is a great example of a system of thought held by so many.

Using force of government in a socialist way to benefit people who have defaulted on a contract and blaming the banks for inforcing the contract in an attempt to limit their losses.

Sadly, it's not quite that simple...

In a free market there are consequences to making bad business decisions. In this case, we have two bad decisions. The borrower, who took out loans they couldn't afford, and the lender, who made loans to people that could not afford to pay them back. In either case, the loan was made based on the erroneous assumption that real estate prices would go up. So, in a free market, when the defaults begin and housing prices fall, BOTH parties would suffer a loss. The borrower would loose their home and any equity they had in it and the lender would take the loss on the difference between the money lent and the new lower FMV of the house. Additionally, we would expect to see BOTH parties work together to minimize their losses. We would expect to see the lenders (ie. the banks) renegotiate mortgages with the borrowers whenever possible. This would be mutually beneficial as the banks would not have to write off the entire loss and the homeowners may be able to stay in their home and keep some equity in it.

If this were the world we lived in, I would agree with you 100%. However, it's not.

The big banks and other financial institutions that would have (and should have) collapsed under the weight of their bad decisions got bailed out and the only reason they are financially able to refuse renegotiating the terms of these loans (and, thus, repossesses these properties) is because they are STILL getting bailed out today by receiving zero % interest rates on the loans they receive.

"When I say liberty I do not simply mean what is referred to as 'free enterprise.' I mean liberty of the individual to think his own thoughts and live his own life as he desires to think and to live..." - Robert A. Taft

Central Banks to use EU domain to buy underwater nations.

First up for auction, Greece. Relatively small debt in comparison to those hopelessly indeed nations biding for Greek assets. Never the less, let the bidding begin!

See the fattest long red arrow? From Greece to France? See where France sends the money it sucks from Greece. If you could hear sound, you might imagine it as the eminent giant sucking sound of a large domain sucking from a small domain with a long straw... or two... filled with debt made our of thin air (imagine the sound of you sucking the last drops of liquidity from your soda fountain glass, days gone by).

See the second fattest long red straw? From Greece to Germany? (see link above)

See the huge, fat... yet faint grey arrows? Those go to large hopelessly endebted nations sucking up debt payments from any that will pay their merry-go-round monopoly game. The paper-money chase.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

No one does stupid like government.

-

Free includes debt-free!