An idea that makes a lot of sense, in a lot of different ways, for a lot of different reasons:
"New York City Council members and housing advocacy groups called on Mayor Bill de Blasio on Wednesday to join them and help homeowners at risk of foreclosure, proposing the use of eminent domain to buy back underwater mortgages.
At a news conference, council members Donovan Richards, Mark Levine and I. Daneek Miller said eminent domain could be used to buy back mortgages from homeowners who owe more than their houses are worth. (continue reading)."
Here is a full-throated defense of the idea from Robert Hockett, a Professor of Law at Cornell Law School, published in the Daily News:
"The last time the U.S. experienced economic calamity and slow-motion recovery — from 1929 into the 1930s — the policy responses it adopted were profoundly innovative yet quintessentially American. This was largely because the President who took office in 1933, Franklin Roosevelt, had led New York — the nation’s center of creative dynamism in business, the arts and governance alike.
New York City should take inspiration from FDR’s ingenuity today by employing a home-foreclosure prevention tool that he pioneered."
* * *
The plan is necessary because the state of the city’s housing market — especially for its African-American and Latino communities — remains dire.
Manhattan fares reasonably well, but the other four boroughs do not. And as a new report issued by the City Council and the Mutual Housing Association of New York demonstrates, some 60,000 New York City homeowner families, disproportionately families of color, are in crisis.
Only the city’s power of eminent domain will help . . ."
The ending is perfect:
"There is what I like to call poetic justice in this plan. In the recent past, eminent domain has been used to remove communities of color from their homes and their neighborhoods. By “taking the loans, not the homes,” New York will be flipping that sordid history on its head — and benefitting itself and investors as well in the bargain." (link)
