Eminent Domain

Abstract

For decades, local governments have used the power of eminent domain to evict low-income residents across the United States. Reversing this trend of government-sanctioned displacement, the City of Richmond, California has developed an innovative use of eminent domain to keep residents in their homes and prevent foreclosure. By using the power of eminent domain to purchase underwater mortgages developed during the housing bubble at today’s market value, Richmond could save residents thousands of dollars and allow them to stay in their homes. This approach has met with strong resistance from Wall Street, where these mortgages have become profitable investment vehicles. Richmond’s success will be based on the City’s ability to develop new partnerships with activists and investors outside the municipal boundaries.