The city’s tax lien sale is on hold again — and could be canceled forever if the City Council fails to renew a law that expires in four weeks.
Gov. Andrew Cuomo issued an executive order on Wednesday delaying the tax lien sale through Jan. 1. It was the sixth time officials have postponed the sale, which was originally slated for May. Mayor Bill de Blasio initially suspended the sale for a few months before the state stepped in and repeatedly pushed it back.
Small property owners, along with some city and state officials, have called for a permanent end to the sale, which was established under the Giuliani administration. The city’s Department of Finance administers the sale, which offloads outstanding overdue property taxes, water and sewer bills to a nonprofit trust that can foreclose on the property.
The 1996 law establishing the system was last renewed in January 2017 and expires at the end of this month.
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The city sees the sale as a way to get owners to pay their property taxes and to efficiently deal with those who don’t. But critics say it can unfairly cost New Yorkers their real estate.
“I’ve been on the lien list in the past five years, so I understand how detrimental this can be,” said Jan Lee, who owns two rent-stabilized properties in Chinatown. “What the lien list does is it gives tools to third-party investors to dismantle wealth-building from people of color in the city.”
As of Nov. 9, more than 3,000 properties were eligible for the sale, nearly half of them in Brooklyn. Opponents argue that the sale disproportionately affects neighborhoods of color, and that owners are often unaware that they are in arrears. Some are driven further into debt by fees and interest.
The lien sale generates relatively little revenue — tens of millions of dollars — for the city, which faces a pandemic-driven $4.8 billion budget deficit for the fiscal year starting next July.
In September, more than a dozen state Assembly members called on Mayor Bill de Blasio to instead work with nonprofits to convert foreclosed properties into affordable housing. Brooklyn City Council members Antonio Reynoso and Adrienne Adams have indicated that they would vote against renewing the sale.
“A postponement of the lien sale, like the one just enacted by Governor Cuomo, kicks the can down the road and allows for this fundamentally predatory and problematic practice to continue at a later date,” Reynoso said in a statement. “We need to abolish the lien sale once and for all.”