The Daily Dirt: City cracks down on $1.3B in unpaid water bills

The city is owed $1.3 billion in unpaid water bills. 

The Department of Environmental Protection is going after “chronically delinquent” accounts that together owe $102 million. Those 2,400 accounts have not paid for the equivalent of 6 billion gallons of water, according to the agency. 

DEP told these building owners that they have 15 days to either pay off their entire bills or enter a payment plan with the city. Otherwise, their water could be shut off. 

“This is a push on all fronts to bring this unpaid money back into the system,” DEP Commissioner Rohit Aggarwala told me on Wednesday.

The properties include single-family homes, office buildings and hotels. For example, Hotel Hayden owes $372,026; Dexter House, $330,581; and the Draper New York, $307,609, according to the DEP.

For indebted multifamily rental properties, the city doesn’t shut off water, but it is planning to initiate lawsuits. 

Aggarwala said the lack of a tax lien sale in the city has forced the agency to take a more aggressive approach to collecting on water service debts. When the sale was in place, the city could sell such debt (along with overdue property taxes) to an investment trust, which would then charge hefty interest. If the trust could not collect the balance, it could move to foreclose and take the property. 

The last lien sale was held in December 2021. The City Council has yet to revive it. 

The pandemic drove up the volume of overdue taxes, but there is also a feeling that many are simply taking advantage of the system. Aggarwala cited an example of a homeowner who failed to pay water bills but managed to install a swimming pool.

Last year, the city recouped $105 million through an amnesty program that reduced owners’ bills and forgave $22 million in interest. Aggarwala said the program helped temper rate increases last year.

Why should the real estate industry care about this? Well, higher delinquencies means higher water rates for everyone. 

“We still need to raise the same amount of cash,” Aggarwala said.  “If we are easy on the deadbeats, that means everybody else’s rates are going to go up.”

What we’re thinking about: When will the City Council revamp and renew the lien sale? Send a note to kathryn@therealdeal.com. 

A thing we’ve learned: Podcast “99% Invisible” started a series of episodes discussing “The Power Broker” in January. Each episode recaps and analyzes a couple of chapters of Robert Caro’s tome. If you are crazy like me and have been contemplating a reread, I recommend this as an alternative. 

Elsewhere in New York…

— Roadrunner Charters, a Texas-based charter bus company, will stop transporting migrants from the Lone Star State to NYC, at least for now. The Adams administration sued Roadrunner to recoup the cost of supporting migrants, and the company has agreed to stop shuttling people while the lawsuit is pending, Politico New York reports. 

— Last year, local artist Rusty Zimmerman painted portraits of 200 residents who live south of Prospect Park. The portraits are on display at Industry City through March 24, Gothamist reports. 

— Police are looking for a man who posed as an Amazon delivery person and broke into nine homes in Queens, Patch reports. The unidentified thief took $32,000 worth of cash, jewelry and other items.

Closing Time

Residential: The priciest sale on Wednesday was $11 million for a 4,000-square-foot townhouse at 61 Charles Street in the West Village. 

Commercial: The most expensive commercial closing of the day was $9.6 million for a 12,900-square-foot mixed-use property at 44 Hudson Street, in Tribeca. — Matthew Elo