Burdensome liens on homeowners and landlords get heavier thanks to empty promises and zero plans from officials

THE CITY 

New York City’s controversial tax lien sales system for collecting unpaid property and water debts expires at the end of next month — without any clear path toward what comes next.

Mayor Eric Adams and City Council Speaker Adrienne Adams have both come out against the longtime practice of selling off tax liens to investors, which generates tens of millions of dollars each year and steps up pressure on property owners to pay their bills.

The city sold the liens from 2,841 properties in December 2021. It was the first sale since May 2019, after postponing the 2020 sale because of the pandemic.

The mayor campaigned on ending the sales, declaring they threaten “generational wealth in Black and Brown communities.”

But neither Adams nor Adams has unveiled specific plans.

Advocates for small property owners are pushing for significant reforms for how the city collects the unpaid debts, and they’re hopeful new city leaders will come up with a way that doesn’t further burden those already stretched thin financially.

And some grassroots activists want to get rid of the lien sale in favor of a community land trust model, in which nonprofits would take ownership of the property and maintain income-restricted units, in consultation with the indebted previous owners.

“There’s this opportunity to create the replacement system with the Council and with the mayor, and that’s an exciting prospect,” said Hannah Anousheh, a coordinator for the East New York Community Land Trust, which was created at the start of the pandemic.

Through the lien sale, which Mayor Rudy Giuliani created in 1996, the city sells debts of property tax and other municipal charges to a trust of investors at a discount. It was conceived as a way to address property abandonment and to collect unpaid taxes after City Hall had struggled for years with both.

Today, tax lien sales are a revenue-raiser for the city, with private investors responsible for collecting the debt. The liens sold this past December are valued at $145 million, according to the city Department of Finance.

Often, property owners late on their bills must pay more fees and interest on top of what they already owe, sending them further into debt, and sometimes resulting in foreclosures if debts remain outstanding.

The lien sale disproportionately impacts homeowners of color, a report from homeownership advocacy group Coalition for Affordable Homes found, as well as smaller property owners, and can lead to negative effects on tenants, too.

Landlord groups have been pressing for an end to lien sales.

Housing while Black

  

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 A new report by the Black Homeownership Project highlights the alarming decline in Black homeownership in New York City over the past 20 years, and the increased costs Black homeowners face compared to their white counterparts.

The project, an initiative from the Center for NYC Neighborhoods, found Black homeownership has declined 13% since 2000 and Black homeowners pay on average $7,000 more in closing costs than white homeowners.

In Brooklyn, 1,742 loans were originated for Black households in 2007. In 2017, that number was 881.

As part of the project, dozens of Black homeowners, housing counselors and program practitioners were surveyed over the last year to address the existing systemic issues that have led to a vast racial wealth gap and decline in Black homeownership – which has only been further exacerbated by the pandemic.

The Center said in a press release the findings supported a proposed slate of pilot programs that would increase homeownership among Black communities in NYC and work to close the racial homeownership and wealth gaps. Those programs include assistance with down payments, matched savings and tenant opportunities to purchase.

Center for NYC Neighborhoods CEO and Executive Director Christie Peale said in New York City, Black families made up only 18% of homeowners, yet they represented more than 60% of the Center’s clients looking for assistance in buying and keeping their homes.

“The homeownership gap is worse for Black Americans now than ever before and has only grown wider amid the pandemic,” she said.

“Through the Black Homeownership Project, we are uncovering new details of how these national trends show up locally and proposing NYC specific programs to create meaningful change so that Black homeowners can buy homes and stay in the communities they love.”

The five new pilot programs recommended by the Center include a down payment assistance navigator, with the research finding assembling a down payment was one of the greatest barriers to homeownership for Black New Yorkers; a savings accelerator, to help low- to moderate-income New Yorkers out of the feedback loop where a lack of access to safe and affordable financing can push them towards extractive financial products; and a homeowner landlord program focused on support services for mom-and-pop landlords to help preserve their source of affordable rentals, including education from City housing agencies, connecting with trusted lenders and contractors for repairs and support and more.

Apparently, this crisis has not been acknowledged by de Blasio in his recovery for all of us.