An old family home in Washington DC has become the latest center in the battle over home equity theft—a practice where government can legally seize a property to cover an unpaid tax debt, sell it for far more than the amount of the debt, and then keep all the money from the sale, even if it amounts to thousands more than what they were owed.

The Pacific Legal Foundation (PLF) is representing 85-year-old Juanita Powell in the lawsuit, and they submitted their version of events to the court on May 23. Mrs. Powell is the personal representative of her late husband Gaston Powell Jr.’s estate, which owns the house.

The story of how this case got to this point is sadly a typical one. Gaston’s brother Albert had been living in the family home for twenty years, but passed away in 2020. Shortly thereafter, DC classified the house as vacant, which meant property taxes jumped from 85 cents to $5 per $100 of value—going from $5,000 per year to $30,000.

Needless to say, the family struggled to pay this astronomical amount, especially because of the expensive medical bills they faced for Gaston’s cancer (his health deteriorated beginning in 2020, and he passed away in October 2022). And due to the pandemic and Gaston’s deteriorating health, the aging family also struggled to manage the property.

In 2023 the mounting tax debt was sold to a private company, and in 2024 the house was reclassified as “blighted,” increasing the tax rate to $10 per $100 of value. Taxes and penalties quickly piled up in the ensuing months, and due to misleading communication about the 2023 sale of the debt, the Powell family thought they had already lost their home and so didn’t take any action to address the mounting burden.

Now, the private company is trying to foreclose on the house. If successful, the company would be allowed to keep the entire value of the house—estimated at $713,000—even though the total tax debt only amounts to a fraction of that, about $231,000. The Powell family stands to lose not only their beloved family home, but also hundreds of thousands of dollars in equity that common sense would say is rightfully theirs.

“The District’s actions could strip the family of their home and every dollar of equity they have in it—an outcome the Supreme Court has already deemed unconstitutional,” said PLF senior attorney Chirstina Martin. “The U.S. Constitution protects against this overreach.”

Martin’s Supreme Court comment is a reference to the Tyler v. Hennepin County case, another home equity theft case brought by PLF, this one in Hennepin County, Minnesota. In 2023, the Supreme Court gave a unanimous decision in favor of PLF on that case, ruling that home equity theft violates the Takings Clause of the Fifth Amendment. Often invoked in eminent domain cases, the Takings Clause states that private property cannot be taken for public use without just compensation.

At the time only a handful of states still allowed this practice, and since then PLF has been helping these states to pass legislation banning it, so as to comply with the Supreme Court ruling. According to PLF’s home equity theft map, there are now only two jurisdictions that still allow this: the District of Columbia and the state of Illinois.

Naturally, the purpose of this lawsuit is to wield the Tyler decision against a jurisdiction that is openly flouting the Supreme Court ruling.

The fact that Tyler was unanimous underscores that home equity theft violates a fundamental and widely acknowledged principle of justice. The opinion of the Court, penned by Chief Justice Roberts, is worth quoting on this:

“The principle that a government may not take more from a taxpayer than she owes can trace its origins at least as far back as Runnymeade in 1215, where King John swore in the Magna Carta that when his sheriff or bailiff came to collect any debts owed him from a dead man, they could remove property ‘until the debt which is evident shall be fully paid to us; and the residue shall be left to the executors to fulfil the will of the deceased.’…That doctrine became rooted in English law.”

Roberts also pointed out that “Minnesota law itself recognizes that in other contexts a property owner is entitled to the surplus in excess of her debt.” He notes that whether it’s private credit, bank foreclosures on real estate, or all other taxes, Minnesota law limits what can be collected to only what is actually owed. In fact, this was also the rule for the sale of real property in Minnesota until 1935, at which point it changed the law to legalize home equity theft. But as Roberts notes, “Minnesota may not extinguish a property interest that it recognizes everywhere else to avoid paying just compensation when it is the one doing the taking.”

In concluding the opinion of the Court, Roberts noted, “The taxpayer must render unto Caesar what is Caesar’s, but no more.”

A libertarian, of course, would go further and question why Caeser is owed anything in the first place. But at least this is a step in the right direction.

The right to keep equity that is rightfully yours is a fundamental and, frankly, obvious principle of justice. The Supreme Court just down the street from the Powell family home recently ruled as much—unanimously. One wonders, considering the circumstances, how DC can possibly justify maintaining this predatory practice.

Then again, it should perhaps not be surprising that Washington DC of all places lacks a well-calibrated moral compass.