Task force lays out possible changes to city’s tax lien sale

Advocates call for full overhaul to protect delinquent property owners

New York /
Oct.October 04, 2021 08:00 AM
Council member Adrienne Adams and Mayor Bill de Blasio (Getty, Facebook via Adams)

Council member Adrienne Adams and Mayor Bill de Blasio (Getty, Facebook via Adams)

A task force studying the city’s tax lien sale is considering a range of options that include replacing the system, tweaking it and exempting some properties.

The 12-person group, formed by City Council legislation passed in January, must come up with recommendations for the sale by Nov. 1. It has not committed to anything, but has released some ideas for how to make the system fairer without letting delinquent owners off the hook.

One is to eliminate tax lien sales for one- to three-unit residential buildings, as well as co-op and condo units. Another is to create a land bank that would collect outstanding debt and still use “outside servicing agents and securitized bonding as needed,” but would have flexibility to work with delinquent owners.

The task force is also considering a preservation land trust that would buy vacant lots and take over foreclosed properties that went unsold at auction. The trust would hold a second auction for developers who pledge to build affordable housing.

The city could also forgive outstanding debt if an owner transfers the deed to a community land trust. The owner could then sign a ground lease with the trust, as well as a long-term agreement to keep the property affordable.

Housing advocacy groups have pushed for that option. During a task force meeting Friday, many criticized some of the proposals as inadequate and voiced concern that the de Blasio administration was unprepared to overhaul the sale.

Hannah Anousheh, coordinator for the East New York Community Land Trust, said the task force was considering an “incongruous mix of proposals” but was not committed to options that would dismantle the sale.

“It’s really time to abolish the tax lien sale and take the need to create a new system seriously,” she said.

In January, the City Council renewed the tax lien sale for one year, with some exceptions for property owners who can show hardship related to the pandemic. City Council member Adrienne Adams led that effort.

The city plans to hold the sale Dec. 17. It would be the first since Covid hit.

The sale, which has repeatedly been delayed since May 2020, will only involve overdue property tax debt, not unpaid water and sewer bills, as is usually the case.

The sale has for years been derided as a Giuliani-era creation that disproportionately affects communities of color. It allows private interests to buy liens that can ultimately be used to foreclose on properties, including buildings whose owners are not made aware of the debts until it is too late.

Under the previous system, the city struggled to collect unpaid taxes and bills for municipal services. The tax lien sale has been seen by some as an improvement.

But during Friday’s meeting, some property owners argued that the next lien sale would just be another blow to homeowners who have received little aid during the pandemic.

“Every level of government has failed us,” said Ann Korchak, a representative for the group Small Property Owners of New York. “It’s time to end this practice. There should be a fair way for homeowners and building owners to pay back the city when something like a pandemic happens.”





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