The Tax Lien Sale privatizes a core government function by transferring the management and  collection of property tax arrears to private investors. As a result, 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. Through the lien sale, the City also squanders powerful leverage it would otherwise have to develop and preserve tax- distressed properties as permanently affordable housing that New Yorkers urgently need, and for other community needs.

In 2020, we formed The Abolish the Tax Lien Sale Coalition to bring attention to the speculation and displacement fueled by New York City’s tax lien sale. Over the past four years, our coalition has led the call for an abolition of the tax lien sale and the creation of a new, equitable debt collection system that works for all New Yorkers. We conducted outreach to countless homeowners and tenants, produced reports, held rallies and press conferences, and beat the drum about the predatory nature of the lien sale. 

After years of our advocacy and organizing, the City Council and Administration has finally recognized that the lien sale exacerbates inequity. At last the City will implement long overdue, commonsense protections for some of those harmed by the lien sale, including implementing pieces of our Coalition’s proposed framework:

• 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 that will stem displacement of homeowners. 
• Comprehensive notice that will let owners know the exemptions they may be entitled to, payment plans available to them, and other options they can use to avoid being included in the lien sale.
• 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. For homeowners who want to remain in their home and community, this provides a pathway to do so while increasing the stock of permanently affordable housing in the City. 
• Outreaching to tenants living in tax distressed properties and affirmatively addressing conditions in these properties.
• Dealing with distressed rental buildings. Landlords repeatedly eligible for the lien sale will have their buildings inspected for HPD violations. This can help address quality of life issues for tenants and could provide a pathway for resident ownership.

We are also relieved that the City Council has launched a new $1 million per year initiative that will include estate planning workshops; assistance drafting wills and other related legal documents; legal assistance and counseling on clearing titles on homes where the legal ownership is not clear due lack of estate planning or other issues (tangled titles); referrals to other services to address liens and other encumbrances on tangled titles; and other related services.

However, this legislation is only a first step towards a more just and equitable municipal debt collection system. We call on the City to:

• Fully Abolish the Predatory Tax Lien Sale and implement our proposed replacement system. 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 the people of New York.  
• Pass legislation that meaningfully supports tenants living in tax-distressed properties.  NYC City Council should 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.