State and local lawmakers have called on the mayor to halt a planned September sale of property tax and water fee debt to collectors.
Citing the ongoing pandemic and economic crisis, state and city elected officials called on the de Blasio administration Monday to defer indefinitely a set of tax lien sales due next month for small homeowners during the pandemic crisis during a press conference outside of City Hall.
According to the Department of Finance, tax lien sales, through which unpaid property taxes taxes or water bills on a property are sold to an authorized buyer who can then enforce judgements against the property, are due to occur September 4th. That date was pushed back from May because of COVID-19.
State Senators Leroy Comrie and James Sanders, Assemblymember David Weprin, Brooklyn and Queens Councilmembers Adrienne Adams, I. Daneek Miller, Robert Cornegy and members of New York Legal Assistance Group (NYLAG) and Habitat for Humanity gathered Monday to say that many of these homes were in communities of working and middle class homeowners, some of whom are essential workers that serve the city in the pandemic.
Indeed, data gathered by Adams’ office indicates that nearly half of the 5,300 Class 1 properties (which are one- to three-unit homes) on the September lien-sale list fall in just 10 of the city’s 51 Council districts.
In a letter to Mayor Bill de Blasio, with 48 signatures and counting, elected officials are asking for the Department of Finance to postpone tax lien sales indefinitely, especially for small homeowners who fall under the Class 1 category of one- to three-family property owners.
Besides the unique economic strain of the moment, elected officials said, outreach has also impacted by the pandemic.
“Due to COVID-19, the Department of Finance has been unable to have these outreach events, meaning that thousands of property owners will be unable to access the information and resources they need to get off of the lien sale,” the letter read. “While DOF is holding tax lien sale events online, they are no substitute for in-person assistance, and many vulnerable homeowners will not be reached by these efforts. Without appropriate outreach, the tax lien sale cannot go forward as planned.”
Senator Comrie, who represents portions of Jamaica, Cambria Heights, Queens Village, Hollis, St. Albans, Laurelton, Jamaica Estates, Briarwood, Hillcrest and Kew Gardens neighborhoods in Queens—said the Department of Finance was normally very active in trying to inform property owners of their vulnerability to lien sales and how to address their debts before they are sold. But the pandemic, he said, has made that impossible.
“We are here today to be very clear that this cannot happen on September 4th —- that it needs to continue to be deferred for the indefinite future. If the city is to demonstrate any level of commitment to equity and fairness, this lien sale did not happen,” Comrie said. “We cannot put bounties on black-owned homes and our cities’ last remaining middle class neighborhoods during the worst public health and economic crisis that our city has seen in generations. … This is just bad policy.”
|City Council District||Council Member||Borough||# of Tax Class 1 Properties on the 2020 Lien Sale List|
|49||Debi Rose||Staten Island||263|
|12||Andy King||The Bronx||201|
|50||Steven Matteo||Staten Island||146|
|51||Joseph Borelli||Staten Island||139|
|18||Rubén Díaz Sr.||The Bronx||126|
|13||Mark Gjonaj||The Bronx||112|
|15||Ritchie Torres||The Bronx||112|
|17||Rafael Salamanca||The Bronx||97|
|16||Vanessa Gibson||The Bronx||76|
|14||Fernando Cabrera||The Bronx||62|
|34||Antonio Reynoso||Brooklyn, Queens||60|
|11||Andrew Cohen||The Bronx||53|
|26||Jimmy Van Bramer||Queens||43|
|8||Diana Ayala||The Bronx, Manhattan||24|
|7||Mark D. Levine||Manhattan||7|
According to data from the Department of Finance, there are 300 Class 1 properties listed in District 37, which currently has no representation on the City Council. (Rafael Espinal, who represented, District 37 left the position to head the Freelancers Union in January. In 2017, Espinal voted against extending the tax lien legislation and said the city should not be selling small homeowners that are having difficulties keeping their home, according to Crain’s.)
The other outer boroughs’ top districts are not far behind. In the Queens neighborhoods of Jamaica, Richmond Hill, Rochdale Village and South Ozone Park—represented by Councilmember Adams—there are 296 Class 1 properties on the list. The northern section of Staten Island, where Councilmember Debi Rose serves, has 263 Class 1 properties listed. In the Bronx, Councilmember Andy King’s district (Wakefield, Olinville, Edenwald, Eastchester, Williamsbridge, Baychester and Co-op City) has 201. The top district in Manhattan, comprising the neighborhoods of Central Harlem, Morningside Heights, Upper West Side and East Harlem and represented by Councilmember Bill Perkins, has just 15 Class 1 properties on the docket.
According to the Department of Finance, when a delinquent property lands on the tax lien sales list, the property owner is first notified 90 days before the next scheduled lien sale and then are notified again at 60 days, 30 days and 10 days before the scheduled sale date. The agency says it works with property owners to pay their debt or enter into a payment agreement through the Property Tax and Interest Deferral (PT AID) Program.
The legislation behind the tax lien sales program stems from the city’s 1970s fiscal crisis. In 1976, the city enacted a law, Local Law 45, which authorized the city to foreclose on properties with tax liens. In 1996, piggy-backing on Local Law 45, the lien sale program was signed into law by Mayor Rudy Guiliani to allow the city to hold annual lien sales to collect unpaid property taxes and other charges such as unpaid water bills, administered by the Department of Finance. The lien sale legislation is due for another City Council vote this year.
According to the Independent Budget Office, there are two ways the sale of liens generates revenue: They push property owners to settle their debt and be removed from the list of lien sale properties, and they bring in cash through the actual sale of the liens. According to a 2016 NYU Furman Center report, the city raised over $1.3 billion dollars from lien sales between 1997 and 2015.
Advocates said the state’s current eviction and foreclosure moratorium would not protect homeowners or tenants from the disruption that a lien sale could cause. New York Legal Assistance Group (NYLAG) attorney Rosemarie Cantanno, speaking at the press conference, said the moratoria did not cover the selling of debts against a property that could ultimately be used to separate it from owners and residents. “The lien sale is a transaction, so it’s not really considered a foreclosure,” she said. “Once someone buys a lien, they then have to foreclose on it.”
Senator Comrie and Assemblymember Weprin have tag-teamed to introduce legislation, S8921, to delay the tax lien sale up to one year after the pandemic is over. The bill is currently in the Senate Rules Committee.