During the last few weeks, the city sent out last-call notices to the owners of about 300 dilapidated tax-delinquent buildings citywide: pay up, or your property will be taken away from you within the year. It’s happening very quietly, without pronouncements or press conferences, but it’s the first time since 1995 that the city has moved to punish the deadbeat landlords of distressed buildings.
The buildings on the list are some of the most neglected and debt-ridden in the city. Some carry truly stunning tax debts–up to $4 million on one Riverside Drive property. Many are in the 7a program, in which court-appointed managers tend buildings that have been consistently ignored by their landlords. And they are in the city’s poorest neighborhoods; 136 are in southern and central Harlem. Others are clustered in Central Brooklyn and the South Bronx, two areas targeted for a housing department program that combines rehab with organizing and crime prevention.
Housing advocates cautiously welcomed the move. “If it’s done right, and if it’s done on the scale that the city used to vest buildings, it will be a tremendous opportunity to deal with affordable housing issues,” said Irene Baldwin of the Association for Neighborhood and Housing Development.
Up until the mid-1990s, the city used to seize properties from tax deadbeats, a policy that left the housing department holding thousands of broken-down buildings. In 1996, laws set up two programs for tax-delinquent buildings. Those in decent condition would have their liens auctioned off to new owners, who then can collect the debt or foreclose on the property.
But for buildings in poor condition, the “third-party transfer” system allows the housing department to legally transfer the properties through an intermediary to new, specially chosen owners with management experience. In the process, the buildings’ crushing tax debt is wiped out.
The revenue-generating tax lien sale system has been underway for years. However, the legally complex third-party transfer program has been slow in getting off the ground: The South Bronx pilot put only 27 buildings through the process, 13 of them vacant. And while the housing department plans to target 500 buildings this year, many of the owners may decide to pay off their back taxes.