The New York Metropolis Council is transferring to remodel the town’s tax lien sale course of with a bundle of payments that will use a city-established land financial institution to gather excellent municipal money owed.
A land financial institution is the follow of shopping for and holding undeveloped land for future sale, managed by a board composed of appointees from the mayor, commissioner of finance, commissioner of housing preservation and growth (HPD), and speaker of the council. The town-run land financial institution the council is aiming to create would have the authority to purchase tax liens from the town, ideally protect homeownership, and acquire money owed to create income for the town.
When a property is on the tax lien sale listing, it typically means the proprietor owes property taxes or has past-due water, sewer, and different property-related prices. The town can then promote the debt to a licensed purchaser who has the proper to gather what’s owed, opening up owners to predatory debt collectors. For New York Metropolis, that’s often the Financial institution of New York Mellon and their servicer corporations, MTAG Companies, LLC and Tower Capital Administration.
Industrial properties could be on the listing for one yr, whereas a residential property can have as much as three years earlier than the town strikes ahead with foreclosures. This course of has put many owners liable to dropping their properties since its first implementation in 1996, notably amongst Black and Brown people, seniors, and veterans.
Earlier in 2025, the Division of Finance revealed the tax lien listing for all 5 boroughs for the primary time in 4 years. The listing had been paused in 2020 because of the COVID pandemic.
“We have been doing doorknocking in regards to the tax lien sale and rather a lot [of people] have been residents renting from non-public LLCs or in two-family properties. These individuals are paying their cash and the owner wasn’t paying the water payments or no matter municipal payments the town needs them to pay,” stated Alexis Smallwood-Foot, 42, founding father of the ReAL Edgemere Neighborhood Land Belief (CLT). She began the belief in 2021 to construct housing on vacant land and tackle local weather resiliency points nonetheless plaguing the Rockaways in Queens after Hurricane Sandy.
“There are additionally properties [on the list] which might be [in] at-risk weak populations, [belong to] senior residents, these in housing applications or with psychological sickness in restoration,” stated Smallwood-Foot. “You could have daycares on the listing as a result of they’re hooked up to properties and church buildings on the listing. You’re dropping areas the place folks of shade congregate.”
Queens Assemblymember Khaleel Anderson stated the town’s tax lien sale system is the farthest factor from equitable for small owners in locations just like the Springfield Gardens, Jamaica, Rochdale Village, Laurelton, Arverne, Rosedale, Edgemere, and Deerfield neighborhoods. Generally folks come to his workplace in literal tears over a past-due water invoice within the 1000’s that that they had no information about, he stated.
“The language I take advantage of is that the town descends upon its residents, and to that finish, it turns into predatory each from the town and the banks to focus on these of us with out regard to socioeconomic circumstances,” stated Anderson. His crew is engaged on laws to handle foreclosures in the neighborhood. “You could have of us [who] have paid off their properties and [can’t pay] these money owed, even with different metropolis and state applications that might and will assist them.”
Anderson’s workplace is adept at serving to some constituents contact metropolis companies to arrange a fee plan, discover assets, apply tax credit, and enroll in exemption applications, such because the New York State Faculty Tax Aid (STAR) or Senior Citizen Householders’ Exemption (SCHE). He firmly believes that the tax lien sale ought to be abolished and there ought to be an entity that helps New Yorkers pay down their money owed. He additionally stated that the town does “a really poor job” of informing neighborhood members about their money owed.
This problem is certainly not relegated solely to neighborhoods in Queens. In response to the Metropolis Council, tax liens are offered in Black and Brown districts everywhere in the metropolis. This contains District 12, which encompasses Eastchester and Co-op Metropolis within the Bronx; Districts 36, 37, 42, 45, and 46 — Bedford-Stuyvesant, Crown Heights, Brownsville, Cypress Hills, East New York, Canarsie, Flatbush, East Flatbush, and Flatlands in Brooklyn; and District 49, the Northshore on Staten Island.
In August 2025, Filmore Brown, a 62-year-old Jamaican immigrant and small-business proprietor with a paid off three-story home in East Flatbush, misplaced his home in a foreclosures. His house was auctioned off with out his information over a past-due $5,000 water invoice. Brown stated he wasn’t knowledgeable about what was occurring till the supposed new house owners breached the home in the midst of the night time, drilled out the locks, and put in surveillance cameras whereas his household and tenants have been woke up from their sleep.
Alice A. Nicholson, Brown’s legal professional, stated that Brown continues to be in his house and they’re preventing the foreclosures in courtroom. She handles quite a few instances the place Black and Brown owners are dropping their properties due to payments they declare they know nothing about. She says she is satisfied that at this level, it’s a rip-off that hunts minority, aged, and even lifeless owners with paid-off or nearly no mortgage funds. “I’m afraid to look and see for myself,” stated Nicholson about her house in Brooklyn.
“Longtime New York Metropolis owners face a number of challenges, together with a lien sale course of that may be opaque and complicated,” stated Brooklyn State Senator Zellnor Myrie in a press release. His current Invoice 8595 offers with stopping foreclosures. “Weak owners, notably Black and [B]rown property house owners, deserve assist relating to remaining within the properties they’ve spent generations defending and enhancing.”
To handle these inequities, housing advocates have lengthy prompt to both reform the tax lien sale course of or, as demanded by CLT teams, to abolish all of it collectively.
The council’s finance and land use laws contains 5 payments, sponsored by Council Speaker Adrienne Adams and Councilmembers Justin Brannan, Gale Brewer, and Sandy Nurse, that goal to reform the method, prioritize neighborhood wants, keep away from pointless displacement of householders, and guarantee tax-delinquent properties are returned to productive use, stated the town.
“The present tax lien sale course of has disproportionately harmed Black and Brown owners. This ongoing racial disparity is why the Council created the tax lien job drive, which I co-chaired. This legislative bundle comes from some suggestions of that job drive, however goes additional,” stated Nurse.
Councilmembers held the ultimate vote on the tax lien reform payments on December 18 per this yr’s final acknowledged assembly. After a prolonged session, the measures handed.
The town claims the shift to a land financial institution would stop the circumstances that usually result in foreclosures by sending DOF notices to apartment boards in massive buildings previous to a sale, require the DOF to observe unresolved tax liens after three years, shift focus from debt assortment to debt decision, recurrently talk the money owed owed, and hold major resident properties till money owed equal $200,000 or 20% of the market worth of the property.
“It could take a holistic strategy and shift the town from the sale of liens to an opaque belief and towards a land financial institution mannequin that prioritizes each tax enforcement and neighborhood stability,” stated Nurse. “I’m assured that the bundle will stop displacement whereas supporting long-term homeownership and the retention of generational wealth in communities of shade most impacted by the tax lien sale.”
Advocates corresponding to Smallwood-Foot are skeptical that land financial institution laws will assist with out correct administration and transparency on the town’s half.
The DOF has been lower than supportive of the invoice bundle. The Metropolis Council reauthorized the tax lien sale via December 31, 2028, underneath Native Legislation 82. The DOF claims present reforms underneath the legislation, together with elevated concentrate on house owner safety and debt decision in 2024, resulted in 85% of the 30,000 liens on the 90-day discover listing being eliminated earlier than the sale. A DOF spokesperson offered this determine, however not the demographic breakdown of these eliminated.
“For this yr’s sale, we additionally strengthened outreach via partnerships with nonprofits, Metropolis Council members, and different metropolis companies,” stated a DOF spokesperson. “In consequence, a document variety of properties have been faraway from the preliminary lien sale listing, with 1000’s of householders making minimal funds, getting into fee plans, or making use of for exemptions. It’s a basic misunderstanding of the function of land banks to include assortment of tax revenues into an entity designed for functions of neighborhood growth. No different land financial institution within the state conducts tax enforcement.”
As well as, a DEP spokesperson stated in a press release that they have been nonetheless reviewing the proposed laws earlier than the vote and upheld the tax lien sale as a crucial device for debt assortment.
“DEP and DOF all the time notify clients a number of instances earlier than a property is listed or offered within the lien sale and work with them to enter into fee agreements,” stated a DEP spokesperson. “DEP’s precedence is to assist clients stay in good standing earlier than enforcement ever turns into mandatory. The lien sale stays a crucial collections device, however together with a property in a lien sale is really a final resort. In partnership with DOF and the Metropolis Council, DEP has carried out reforms to provide property house owners extra time, data, and assets to pay their money owed.”
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Editor’s Notice: This story has been up to date to replicate the passage of the tax lien biills.
