Government Regulation Robs Retired Couple of Home, by John Carlisle

This Christmas will be the last Christmas Harold and Iris Stone spend in the home in which they raised two daughters and accumulated four decades of cherished holiday memories. That’s because the Stones will soon be evicted, thanks to the city of Lynn, Massachusetts.

The Stones’ sad story is but one example of how government regulation can wound innocent Americans – Americans who thought that, if they worked hard and played by the rules, they would reap the rewards.

The Stones’ tragic story began in 1985, when Harold and Iris decided to sell the auto repair business the couple had operated for 40 years. Their plan was simple: by selling the business they would have the money to pay off their mortgage, retire some business debts and have enough left over to enjoy their golden years.

But Lynn city officials had other plans. The city wanted to turn their property into a condominium development. To do so, officials coerced the Stones into selling their business to a favored developer for $400,000, at least $325,000 below the property’s actual value. City planners were so determined to pressure the Stones into the unfavorable sale that they resorted to using what the local press later called “an illegal zoning ordinance” to scare off potential buyers who offered higher bids. The developer was supposed to pay the Stones full market value, but went bankrupt soon after the purchase – leaving the couple with nothing for retirement. They used all of the $400,000 to pay off their mortgage and debts.

In 1989, the Stones decided to repurchase their property. A real estate boom was in progress, and they hoped they could resell the property for a significant profit. The Stones borrowed $500,000 for the repurchase and were soon getting very attractive offers from interested buyers. A car dealer offered the couple $920,000, which would have been enough to pay off the bank loan and still have plenty for retirement.

But then the city stepped in and sabotaged the deal. The city also sabotaged every subsequent deal the Stones arranged. To ward off potential buyers, the city cut off water to the Stones’ buildings and eliminated the curb cuts to make the property inaccessible. The city argued that these tactics were necessary to ensure that any buyers would go along with the city’s desire to convert the land to non-industrial uses. But the city’s subsequent behavior puts this claim in doubt. Shortly after the bank foreclosed on the Stones’ business property in 1992, the city allowed a furniture warehouse to buy the property.

The Stones took their case to court and years of litigation followed. Although a jury awarded the couple $720,000 in 1995, the City of Lynn got the decision reversed on appeal. Desperate to avoid bankruptcy, the Stones then took their case to the U.S. Supreme Court early this year. But the High Court, as it must with most cases, declined to hear the case.

The bank foreclosed on the Stones’ home this summer, and the couple is now waiting for the final order to leave.

Iris says she and Harold are confident they can stay in the house through the Christmas holidays, but notes that it is not going to be a joyful occasion. The Stones’ daughters and close friends will come to celebrate the holiday. But Iris says she doesn’t have the stamina to enjoy Christmas the way she used to. She used to love to cook holiday dishes and bake pies. Now, Iris says, she simply doesn’t have any appetite. She finds it hard to even sleep and often experiences panic attacks.

“I never for a moment believed the government would do to us what they did. I mean, this is America,” said Iris. “You think that if you work hard, buy a home and live a good life, you’ve at least earned the right to keep it and not have your own government come and take it away.”

But there’s one thing government will never be able to take away from the Stones: the memory of 40 Christmases in their beloved home. The Stones will never forget the look on their daughters’ faces when they got their first bicycles on Christmas Day or that very special Christmas many years ago when Harold gave Iris a watch with a touching card, “To the Goddess of Beauty, here is the Goddess of Time.”

With eviction imminent, this Christmas may be the one Christmas the Stones try to forget.

John K. Carlisle is Director of the Environmental Policy Task Force, a division of The National Center for Public Policy Research. Comments may be sent to [email protected].

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.