AG James and Coalition of Elected Officials Demand Delay, Reforms to, and Removal of Over 4,700 Homes from Tax Lien Sale to Protect New York Homeowners

NEW YORK – New York Attorney General Letitia James and a group of 57 elected officials urged New York City Mayor Bill de Blasio to delay the city’s annual tax and water lien sale in order to protect homeowners as the COVID-19 crisis continues. In a letter to Mayor de Blasio, Attorney General James and other elected officials called for the removal of more than 4,700 Class 1 Properties, or residential buildings with three or fewer units, from the tax lien sale scheduled for September 4, 2020. As New Yorkers are still facing significant financial burdens due to the pandemic, including these homes in the tax lien sale will only exacerbate the economic crisis and result in homeowners — mostly in communities of color — potentially losing their homes during this time.

“Now is the time to support hardworking homeowners, not saddle them with undue financial burden,” said Attorney General James. “The tax lien sale has a disproportionate impact on communities of color and will only exacerbate the financial hardships so many are already facing in the middle of a pandemic. It’s incumbent on government to protect the people — not kick them when they’re already down — and I urge Mayor de Blasio to take action immediately.”

Every year, the New York City Department of Finance (DOF) holds a tax lien sale, whereby the tax liens on properties for unpaid property taxes and water bills are sold off in an auction. The terms imposed by the tax lien sale on New Yorkers are dramatic: mandatory five percent surcharges, legal fees, and a nine or 18 percent interest rate that compounds daily. These additional fees can quickly turn a relatively small tax lien into an overwhelming financial burden, eventually pushing homeowners into foreclosure.

The buildings included in the sale every year are disproportionately located in communities of color. In fact, according to the Coalition for Affordable Homes, the city is six times more likely to sell a lien on a property in a majority Black neighborhood and two times more likely to sell a lien on a property in a majority Hispanic neighborhood than in a majority white neighborhood.

The city generally conducts vigorous outreach to property owners to ensure residents in debt to the city are aware that they are in jeopardy of entering the lien sale process and knowledgeable about alternative payment plans. This year, however, because of the severe constraints that COVID-19 has placed on outreach efforts, much of this work was not done at nearly the same levels as in years past. In addition, Mayor de Blasio only just announced on August 23, 2020 that the sale would in fact occur on September 4, 2020, giving New Yorkers only a fraction of the time to plan. As a result, many vulnerable families and individuals may not have any information about how to remove their homes from the sale or even be aware that their property is included in the sale.

Attorney General James has long advocated for reforms to the lien sale program to address some of its gravest injustices and renews those calls today, including:

  • Eliminating water and sewer lien sales for low and middle-income occupants of one-to-three family homes (there are currently 2,639 Class 1 properties on the list that have water debt only);
  • Creating a “Homeowner Advocate” position who would help homeowners navigate different agencies involved in the tax lien sale (no such position currently exists); and
  • Excluding nonprofits and houses of worship from both the water and the property tax lien sale (there are currently 49 non-profit properties on the list, all resulting from water debt).

The letter was signed by a coalition of 57 elected officials, representing New Yorkers at the federal, state, and city level.

Congressman Gregory Meeks
Congressman José Serrano
New York City Comptroller Scott Stringer
Speaker of the New York City Council Corey Johnson
Manhattan Borough President Gale Brewer
Brooklyn Borough President Eric L. Adams
Queens Borough President Sharon Lee
State Senator Jamaal Bailey
State Senator Leroy Comrie
State Senator Andrew Gounardes
State Senator Brad Hoylman
State Senator Robert Jackson
State Senator Liz Krueger
State Senator John Liu
State Senator Zellnor Myrie
State Senator Kevin Parker
Assemblymember Inez Dickens
Assemblymember Harvey Epstein
Assemblymember Deborah Glick
Assemblymember Richard Gottfried
Assemblymember Yuh-Line Niou
Assemblymember Danny O'Donnell
Assemblymember Nick Perry
Assemblymember Dan Quart
Assemblymember Karines Reyes
Assemblymember Linda Rosenthal
Assemblymember Rebecca Seawright
Assemblymember Aravella Simotas
Assemblymember David Weprin
New York City Council Member Adrienne Adams
New York City Council Member Alicka Ampry-Samuel
New York City Council Member Justin Brannan
New York City Council Member Fernando Cabrera
New York City Council Member Robert E. Cornegy, Jr.
New York City Council Member Laurie A. Cumbo
New York City Council Member Vanessa Gibson
New York City Council Member Mark Gjonaj
New York City Council Member Barry Grodenchik
New York City Council Member Robert Holden
New York City Council Member Ben Kallos
New York City Council Member Andy King
New York City Council Member Peter Koo
New York City Council Member Karen Koslowitz
New York City Council Member Brad Lander
New York City Council Member Mark Levine
New York City Council Member Farah Louis
New York City Council Member Alan Maisel
New York City Council Member Carlos Menchaca
New York City Council Member Bill Perkins
New York City Council Member Donovan Richards
New York City Council Member Carlina Rivera
New York City Council Member Debi Rose
New York City Council Member Helen Rosenthal
New York City Council Member Rafael Salamanca, Jr.
New York City Council Member Mark Treyger
New York City Council Member Eric Ulrich
New York City Council Member Paul Vallone

“We cannot allow this health crisis to become a housing crisis, which would disproportionately effect minority and underserved communities and displace them because of the economic crisis COVID has caused,” said Congressman Gregory Meeks. “I stand with the Attorney General in calling on the City to use its discretion and suspend tax lien sales throughout the pandemic so we can provide interim relief for families struggling to make ends meet.”

"The COVID-19 pandemic has laid bare the deep, systemic inequities in our city and disproportionately impacted communities of color,” said New York City Comptroller Scott Stringer. “As a city, we must do everything we can to lessen the devastation on New Yorkers who have already been struggling. I join the Attorney General in her call to protect communities who need our help the most.”

“A lien sale in the midst of an unprecedented economic and public health crisis will make matters worse for New Yorkers struggling with the effects which are still ongoing, particularly communities of color that are the hardest hit and most vulnerable,” said Manhattan Borough President Gale A. Brewer. "We should be protecting people's housing, not endangering it.”

“The massive financial hardships caused by the COVID-19 pandemic continue to burden families in Queens,” said Queens Borough President Sharon Lee. “It would be inhumane and unjust to proceed with the New York City tax lien sale at this time. Many of the homeowners and residential property owners at risk are members of the communities hit hardest by the pandemic. The City will not solve its financial troubles by pushing its most vulnerable families closer to the precipice of foreclosure.”

“For the Mayor to proceed with a tax lien sale in the midst of the pandemic and the highest unemployment in a generation is unconscionable,” said State Senator Brad Hoylman. “To do so in the middle of a national conversation about systemic racial inequity is intolerable. Small homeowners need a champion right now and they have one in Attorney General Letitia James. I’m proud to stand with her, as well as my colleagues who have introduced legislation on this issue, Senator Leroy Comrie and Assembly Member David Weprin, in the fight to protect New Yorkers from foreclosure.”

“At a time of deep financial instability across our city, especially in vulnerable communities of color, I urge the Department of Finance to cancel this year’s lien sale for small property owners,” said State Senator Zellnor Myrie. “City government should be working to support homeowners burdened by the pandemic and recession, not selling off their accumulated wealth to the private market.”

“I always vote against lien sales — period,” said Assemblymember Deborah Glick. “I am grateful to Attorney General James for taking a stand against the damaging practice of selling tax liens. Government must follow certain procedures that offer some protection to homeowners — these sales eliminate those procedures.”

"A moratorium on property tax sales is important for keeping people from losing their homes, just like the moratorium on evictions," said Assemblymember Richard Gottfried.

“This is not the time to be burdening small commercial property owners and homeowners. It sends the wrong message to ‘mom and pop’ businesses, hard-working families who already in severe financial distress due to the COVID pandemic,” said Assemblymember Rebecca Seawright. “I am calling on the Mayor to hold lien sales in abeyance during the pandemic and work with small property owners to give them the time they need to get back on their feet.”

"With so many New Yorkers affected economically by the COVID - 19 pandemic, especially individuals in communities of color, it unquestionably wrong for the City of New York to proceed with the tax lien sale this year,” said Assemblymember David I. Weprin. “Continuing with this sale will only exacerbate struggles for families across New York, including owners of small homes in my Assembly district, and I once again call on the Mayor of New York City to cancel the NYC tax lien sale in 2020. I am also incredibly grateful to Attorney General Letitia James for joining our effort to stop the sale during this incredibly difficult time for so many New Yorkers and look forward to hearing a positive development on this matter from the City soon.”

"Communities of color have suffered disproportionately from the impacts of COVID-19 and moving forward with the 2020 lien sale will further compound recovery,” said New York City Council Member Adrienne Adams. “Housing instability was a major problem in this city before the pandemic and moving forward with the 2020 lien sale will only exacerbate that. We must ensure that financial hardships are not heightened at this time and cancel the lien sale.”

“We are in the midst of the worst financial and public health crisis in decades. Small homes must be removed from the 2020 New York City tax lien sale, and liens should not be sold during the pandemic,” said New York City Council Member Fernando Cabrera. “Allowing the sale of these liens would dramatically increase homelessness, which we have worked so hard to overcome, destabilize families as well as put more people at risk for COVID-19, in a second wave of infections. Historically, people of color have struggled to own and keep homes, which are the most common form wealth passed to future generations, keeping families financially stable over time. As we saw in the last financial crisis, recovering financially and emotionally from the loss of a home can take years, and might be impossible for some families. We cannot allow this to happen.  As I have supported protections for tenants during this crisis, I am also calling for protections for small homeowners, in the name of justice and compassion.”

"Our homeowners, especially our homeowners of color, are financially burdened as a result of the COVID-19 pandemic,” said New York City Council Member Vanessa Gibson. “It would be unfair and unjust for us to proceed with the tax lien sale when we know many of our homeowners are in desperate need of support and that our African-American and Latinx neighborhoods will be disproportionately affected. I join with Attorney General Letitia James and my colleagues in government in urging the Commissioner of Finance to reverse this decision.”

“Including small homeowners in this year's tax lien sale will only guarantee the financial ruin of hundreds of families across the city, especially in Black and brown communities in the outer-boroughs,” said New York City Council Member Carlina Rivera. “We need to recognize that for many families, homeownership is a major financial asset that they can't afford to lose. COVID has already stripped so many of us of economic stability, and forcing homeowners into this position is the last thing we should be doing.”