NYC’s tax lien sale is slated to resume soon. Will Cuomo stop it again?
Sale has been delayed three times already
The state’s suspension of tax lien sales expires this weekend, and thousands of properties could soon hit the auction block.
New York City’s tax lien sale has been delayed three times during the pandemic, most recently through an executive order from Gov. Andrew Cuomo that suspended the sale until Oct. 4. It is unclear if the city intends to move forward with the sale, or if the state will extend the suspension further. Representatives for the state and city didn’t immediately provide additional information.
The city’s lien sale on overdue property taxes, water and sewer bills was originally slated for May, but Mayor Bill de Blasio postponed it until August and then again to September. Just before the sale was scheduled to resume, Cuomo signed an order delaying it once again.
According to the city, more than 80 percent of owners end up avoiding the sale by paying their bills, entering a payment plan or qualifying for an exemption. For those who do not, the city sells the owners’ outstanding debt to a nonprofit trust, which can ultimately move to foreclose on the unpaid taxes, take control of the property and sell it.
Earlier this week, Assembly members Harvey Epstein and Robert Carroll sent a letter to the mayor calling on him to end the sale, instead of “siphoning off the land and resources to developer cartels and vulture capitalists.” In the letter, they note that the liens are sold to a trust serviced by two private companies, the Mooring Corporation and Tower Capital Management.
“These companies are incentivized to rack up as many fees as possible, plunging property owners further into debt, and hindering families’ efforts to get back on track financially,” the letter states. “Even worse: these investors are often incentivized to quickly foreclose on the debt, strip the homeowner of their equity, displace the homeowner, and flip the asset for a significant payout.”
The letter suggests that the city instead work with nonprofit organizations to convert foreclosed properties into affordable housing for low-income residents. It also notes that tax lien sales are “most prevalent in the neighborhoods of color in north, central, and eastern Brooklyn, southeastern Queens, and the northern and eastern Bronx.”
As of Aug. 17, more than 9,000 properties were eligible for the lien sale. Brooklyn had the most with nearly 3,900, followed by Queens with more than 2,200.