Carol A. Hand
This morning as I was reading blogs, I grew increasingly alarmed about the magnitude of the refugee crisis in Croatia and Europe. (Thank you, Ina Vukic, for your crucial and thought-provoking updates.) It made me wonder what we could do as a little city in Minnesota to reach out and offer sanctuary for at least some of the refugees. And then, other questions came to mind. What can we do for those who are homeless here now? What about all of the families here that are facing foreclosure and evictions from their homes? How can we, as a city, help them and refugees as well?
What would happen if the city decided to exercise the right of eminent domain to stop those foreclosures, claiming ownership of all of those properties and allowing families to remain where they are? Condemning those properties that are vacant to house the homeless, and using the remainder to house refugees? Is it possible? How could this be fair for banks?
Image: Scale of (In)Justice
I’m not an economist and I’m not sure how eminent domain rights really work, but I have helped resolve tricky problems in the past. This morning, I remembered one of those times. It’s a story I need to tell to illustrate my thinking here.
It was 1983. I was the recently-hired Title III Coordinator for a state department of health and social services. My job was to develop and oversee programs and policies for elders throughout the state. Funding for services, of course, was dependent on state and federal revenues and appropriations. Some years, funding increased, and some years it was reduced. Monies were distributed among the counties and tribes based on formulas that relied on the most recent US Census information. In 1983, demographic information was thirteen years out-of-date.
When the new population figures for 1980 arrived at the end of 1983, it was clear that huge shifts had occurred. Elders who retired from 1970 to 1980 had flocked to northern counties, leaving many suburban and urban areas in the southern part of the state with a significantly reduced percentage of the older population.
It would have been an easy situation to address had it also been a time of significant budget increases. New monies could simply be applied to address population growth in some counties without cutting funding for those where the percentage of the state’s elder population had declined. Unfortunately, those were the Reagan years, a mean-spirited time (from my perspective) of tax cuts for the wealthy and draconian downsizing of the social safety net for those who were poor, retired, or had disabilities.
When the northern counties heard the news, they naturally wanted all of the money they felt they deserved. Honoring that demand would mean that funding for some of the larger southern counties would need to be slashed, resulting in jobs lost and services gutted. Stepping back to look at the bigger picture, it was important for me to acknowledge that the total amount of funding for aging programs in the state had never been adequate to meet the magnitude of needs.
In my travels throughout the state, I had visited Latino and Black urban neighborhoods, farm communities, and tribal reservations. The congregate nutrition programs, senior centers, home-delivered meals and other programs and services were a lifeline for many and improved the quality of individual and community life. Some of these would be lost for the sake of mechanistic formulas that were convenient for administrators but would certainly cause suffering for those elders who would no longer be able to access necessary services.
As a staff, we discussed options. We needed to let elders in the state help us decide. We were, after all, being threatened by lawsuits from the northern counties. I proposed that we offer three options and develop a position paper that was carefully argued to encourage people to choose the option that would do the least harm. Staff agreed. It was then my job to come up with the options and draft a position paper.
There were three obvious options:
- Continue to use the old demographic information and award any funding increases, or decreases, equitably across all counties and tribes
- Distribute funding based solely on the new demographic information, cutting some budgets significantly and enhancing others
- Create a new wrinkle for funding formulas in order to address current and future population shifts – a “Hold Harmless Provision”
It was fairly simple to describe the first two options. It was the third option that was the most challenging – the one we all hoped would be the public opinion winner from elders all over the state.
- Contingent upon allocations from the state and federal governments that were at least equal to those in the current budget, all counties would continue to receive their current funding level as a base. No counties would lose funding.
- Contingent upon significant increases in state and federal funding that exceeded the resources needed to fully fund the “under-funded” counties without taking money away from “over-funded” counties, awards for “under-funded” counties would bring them up to their new “fair share” before any remaining funds were then distributed using the existing funding formula to maintain equity.
- Contingent upon budgets like the current one, with only moderate funding increases, a hold-harmless provision would go into effect. Budgets for technically “over-funded” counties would not be reduced, but they wouldn’t receive any additional funding until inequities were resolved. All new monies would be awarded to “under-funded” counties until they received their “fair share,” at which point, new money would be awarded based on the existing formula.
- In the event of future funding decreases, the state would need to meet with citizens throughout the state to decide how to proceed.
We discussed and tweaked draft after draft of the position paper. Finally, we agreed it was ready for the department secretary’s signature. Then, thousands of copies were printed for scheduled public hearings around the state. I was ecstatic that we had something we could all be proud of – it just might work!
I was on my way to the first public hearing in the state capitol city, only a few blocks away from my office. I was dressed in a tailored suit and high-heeled shoes (professional, you know), with a huge stack of position papers blocking my view as I hurried along. As I stepped off the curb to cross the street to the building where the hearing was being held, one of my heels caught in a crack. The papers and I went flying. Luckily, no cars were speeding by at the time. I looked down and saw my torn stockings and bloody knee, but I had a few moments to clean up. Then, I started collecting the papers. It was then that I noticed the typo!
How could I have missed this after editing this paper so many times? How could everyone have missed this! There it was, in bold capital letters at the top of option three – instead of the “Hold Harmless Provision” it said “OLD HARMLESS POSITION.” I forgot my bleeding knee and my embarrassment over falling. I was oblivious to the pain beginning in my sprained and tendon-damaged ankle.
My face flushed red, my heart started fluttering. But I picked up the papers and hurried across the street. I stopped in the restroom to discard my torn stockings and wash off my bloody knee, glad I wore long skits in those days, and walked into the room where the hearing would be held.
In a split second, as I piled the papers on the front table, I realized it would be ok. I really never could have planned this. Comic humor. That was really what sold the provision to elders throughout the state and prevented lawsuits. Everyone could laugh at the state (me), and really, the ‘old harmless provision was a funny typo for the state bureau on aging to miss.
What does this memory have to do with providing shelter for refugees? This morning, I asked myself what banks deserve in terms of recompense for foreclosed houses. I know from paying off my own mortgages, even with lower interest rates, that banks had earned far more in interest than the fair market value of my homes by the time I sold them.
Image: Scales of Justice
It occurred to me that cities could create a “hold harmless provision” for foreclosed homes they seized from banks by exercising their power of eminent domain. Banks would be able to keep the excess interest of the mortgagees who had paid more than the market values of their homes already. But the city would agree to pay banks only the difference between the interest already paid and the fair market value for those mortgagees who hadn’t yet reached that threshold.
I have no idea if this would work economically or politically. But I really think it could. I think it’s fair and socially just. I’d love to hear from those who know more about how to make this happen on a local level throughout the nation.
Information about Cities Using Eminent Domain:
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