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Activists celebrate ending of city’s controversial tax lien sales

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Advocates and politicians celebrated the end of the city’s controversial tax lien sale program outside City Hall on Feb. 28.
Photo by Adrian Childress

Advocates and politicians celebrated the end of New York City’s controversial tax lien sales, which allowed the city to sell property owners’ uncollected property taxes and water debts to private investors.

The decades-old scheme has drawn scrutiny from housing activists as well as Mayor Eric Adams and the City Council for disproportionately harming homeowners in low-income neighborhoods and people of color.

“We are so glad to stand together with our elected advocates today to celebrate the end of the Lien Sale, which has lined debt collection firms’ and investors’ pockets with money and property taken from low-income New Yorkers for far too long,” said Debra Ack of the East New York Community Land Trust Monday.

The group rallied with politicians outside City Hall on Feb. 28 calling for a fairer system for dealing with municipal debts that don’t displace owners and tenants.

“What is lost when longtime residents are pushed out by the Lien Trust and its debt collectors is worth so much more than the partial bill payments that the City gets from the Trust when liens are sold,” said Paula Segal, an attorney with the group TakeRoot Justice.

“With Lien Sales behind us, New York will benefit from neighborhood stability and the resilience of communities that have emerged together through the recent pandemic and the crises of investment of the last century,” the lawyer added.

Activists rallied outside City Hall on Feb. 28.Photo by Adrian Childress

Former Mayor Rudy Giuliani created the program 1996 allowing the city to sell the debts at a discount to a trust of investors.

The program brought in hundreds of millions of dollars for the city, but research by the Coalition for Affordable Homes showed that they have an outsize negative effect on property owners of color and small homeowners.

The private companies could set steep interest rates and fees, which drove people into deeper debt and threatened foreclosures if they didn’t pay.  

The city held its last lien sale in December after a pandemic pause, but Mayor Adams and the Council still have to come up with an alternative.

Council Speaker Adrienne Adams said lawmakers are working on it.

“The Council is committed to working with all stakeholders, including impacted communities, advocates and the Mayor, to ensure this past system is a relic and we enact new solutions that protect the economic health of the City, communities and homeowners,” Speaker Adams said in a statement Monday.

A spokesperson for Mayor Adams said hizzoner also wants to find a way to still collect money owed to the city while protecting vulnerable residents. 

“Mayor Adams believes the City should explore alternatives to the current lien sale that ensure the city can continue collecting its debts while helping homeowners – particularly Black and Brown homeowners who have been disproportionately impacted by the pandemic – retain ownership,” said Jonah Allon in a statement. 

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