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The Tax Liens Program in New York City

Giuliani's Tax Lien Program Continues Today
During the Giuliani reign, the mayor created a tax lien program in which homeowners and landlords could easily lose their homes and apartment buildings. If a homeowner fell behind in his tax payments, the finance department would notify the homeowner and after waiting a short period of time, the finance department would sell the tax lien to a private corporation, a trust, created by the mayor that would charge additional fees and 18 percent interest and attempt to collect the long, overdue taxes. If unsuccessful, the trust would foreclose on the homeowner. The city would have one more homeless family or families.

Loss of Low-Income Housing
There is another consequence to foreclosure. Homes are often bought by developers and renovated into market rate housing. This means that such homes are no longer available to low-income families.

Of course, it is isn't just homeowners who find they can no longer pay their property taxes but it is landlords of large buildings. the consequence of foreclosure for tenants in this buildings is often disastrous since no one is in charge of maintaining the building.

The Scope of Tax Lien Programs
Based on the City’s best data, it is estimated that $350 to $400 million is received annually during the period between the 90-day notice and the lien sale as payments on delinquent tax, water, and sewer, and other municipal liens during that period.

From 2008 to 2016, the number of liens sold to the Trust has averaged about 4,600, or 18.3 percent of the liens noticed in the 90-day notice.
Atempt to End the Tax Lien Program
In 2017, Letitia James, the Public Advocate, introduced new legislation to stop homeowners and landlords from losing their homes and to keep homes available to the low-income market. She has asked the city council to create a preservation trust that would purchase the tax debt and sell the buildings to nonprofits that would preserve the housing as affordable. Although her model needs to be examined, it clearly makes more sense than the disastrous program established by former Mayor Giuliani.

James' Legislation
In 2017, James put forth legislation before the City Council (Int 0218-2018). The summary reads that it would require "the Department of Housing and Preservation and Development (HPD), in conjunction with the Department of Finance (DOF), to promulgate rules establishing a preservation trust program which would allow for the sale of negotiated sale of tax liens on distressed properties to a trust created for the purpose of rehabilitating and preserving affordable housing. The legislation would also authorize DOF to sell such tax liens to a trust eligible under the preservation trust program and expand the definition of distressed property."
And there it sits assigned in the Committee of Finance.


  1. I wonder if Latishia James will be able to move this issue forward at AGs office?

  2. I hadn't known about the tax lien program. Thanks, Lynne.


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