Statement from the Abolish the Tax Lien Sale Coalition: The City Takes First Step Toward Abolishing the Lien Sale, but the Fight Isn’t Over

On Sunday, the City Council and Administration responded to years of relentless advocacy by the Abolish the Tax Lien Sale Coalition, of which New Economy Project is a member, by enacting legislation to address the severe inequities caused by the city’s tax lien sale. The bill’s long overdue provisions include the following, all of which were first proposed by the Coalition:

• Funding for community based organizations (CBOs) to assist property owners. This assistance will help ensure that owners avail themselves of all that they have a right to, including exemptions, payment plans, and the other options to prevent displacement.
• Comprehensive notice to inform homeowners of their rights.
• Providing homeowners a “last resort” option to remain in their homes by voluntarily transferring their home to a community land trust (CLTs) or other organizations in exchange for clearing their tax debt while retaining some equity in their homes. This provides a pathway for homeowners to stay in their communities and increases the stock of permanently affordable housing in the City.
• Outreach to tenants living in tax distressed properties and affirmatively addressing conditions in these properties.
• Addressing distressed rental buildings by inspecting properties of landlords who are repeatedly eligible for the lien sale for HPD violations. This will help improve living conditions for tenants and could provide a pathway for converting these properties to resident ownership.

Additionally, the City Council has launched a new $1 million per year initiative that will include estate planning workshops, legal assistance and counseling on clearing titles on homes where the legal ownership is not clear due to lack of estate planning or other issues (tangled titles), and other related services.

Despite this progress, the legislation is only a beginning. The Coalition continues to call for the full abolition of the predatory tax lien sale, which has enabled investors and private debt servicers extract massive amounts of wealth from low-income Black and brown communities, push elderly and low-income homeowners and tenants into further distress, and leave neighborhoods littered with tax distressed vacant lots.

For the past four years, the coalition has tirelessly highlighted these detrimental impacts, advocating for alternatives like community land trusts to preserve affordable housing and meet other urgent community needs. The coalition’s extensive outreach, report production, and public rallies have been instrumental in bringing this issue to the forefront. While the city’s actions reflect these advocacy efforts, more must be done to ensure an equitable property taxation system and comprehensive support for tenants in tax-distressed properties. We call on the City to:

• Fully Abolish the Predatory Tax Lien Sale and implement our proposed replacement system (released Feb. 2023). The newly formed Task Force, which thanks to the advocacy of the Coalition includes community representation, must devise a debt collection system that is accountable to New Yorkers.
• Pass legislation that meaningfully supports tenants living in tax-distressed properties. The City Council must pass a reformed city foreclosure program for distressed properties, a Land Bank, and the NYC Community Land Act package to bolster permanently affordable, community and tenant-owned housing across the city.
• Work with Albany to implement a fair and equitable property taxation system. As it stands, New York’s property tax system imposes disproportionate burdens on Black and Brown communities. By asking property owners and tenants (who by extension contribute to the tax base through their rental payments) to pay more than their fair share in taxes they experience a disproportionate risk of being impacted by the lien sale.

Read New Economy Project’s June 18, 2024 Testimony before the New York City Council Committee on Finance, on Legislation to Reauthorize the City’s Tax Lien Sale

Read coverage of the reauthorization of the City’s tax lien sale in The City.