When New York City agreed last year to restart its program of selling the outstanding property tax and water debts owed by thousands of homeowners, officials pledged to enact guardrails to limit the disproportionate impact on poor and largely non-white New Yorkers.
But just days before the sale resumes, only about one-third of nearly 30,000 delinquent properties have been removed from the lien sales list, despite a $2 million campaign by the city to promote programs helping owners to do so.
That drop-off rate tracks closely with the numbers in the days before New York’s last lien sale, in 2021, according to a data analysis by Bloomberg Tax. And about 70% of the remaining liens are in neighborhoods that are mostly non-white, an analysis of Census data shows.
The looming May 20 sale brings back into focus the needs and criticism of New York and other cash-strapped cities and states that sell off such liens to private collectors.
Since the city paused the program amid the pandemic, property tax delinquencies have surged from $575.5 million in fiscal 2022 to $785 million in fiscal 2024, according to New York City’s finance department.
The lien sale model allows the city to recover some of that revenue, but lien buyers can ramp up the pressure on debtors, including by hiking up interest payments and eventually initiating foreclosures or evictions.
About half of the more than 18,000 properties remaining on this year’s list are residences with one-to-three units and condominiums under three stories, owing an average of a little more than $30,000. Roughly two-thirds of the liens are in Brooklyn or Queens, the city’s most populous boroughs.
Albert Scott, chair of the East New York Homeowners’ Association, said the city’s efforts to reform the process have been underwhelming and underscore why advocates want the lien sales abolished.
“What we’re seeing is homeowners are still struggling,” he told City Council members at an April 30 hearing.
Other housing advocacy groups say the city should at least end the sale for owners of family homes, condominiums, and cooperatives and create its own debt-resolution program focused on keeping residents in their homes and affordable housing.
“Even if there are guardrails on it, to have a commodified system around taxes is predatory and really beneath New York City,” said Kevin Wolfe, deputy director of advocacy and public affairs at the Center for NYC Neighborhoods, a group that promotes affordable homeownership.
One of the new options the city touted was an “easy exit” program, allowing owners of family homes or condominiums to remove themselves from the lien list for one year if they have a combined income of no more than $107,300. As of May 6, 437 had applied for the program—only 209 were approved.
Still, Finance Commissioner Preston Niblack was optimistic that more delinquent taxpayers would find a way to get off the list in time.
“The level of outreach is very, very high,” Niblack told Bloomberg Tax in late April. “I think that we will start to see the results of that as we get closer to the lien sale.”
Ryan Lavis, a spokesperson for the Finance Department, said the city is “actively working” to help as many property owners as possible avoid the sale and expects the number of liens ultimately sold to be “significantly” lower by the May 20 deadline.
“It’s important to note that the final list of properties included in this year’s lien sale has not yet been determined,” he said in a statement.
A Pandemic Pause
New York City’s program dates to 1996, when Mayor Rudolph Giuliani’s administration used it to target revenue from delinquent building owners while the city was filled with thousands of mostly decrepit buildings abandoned in the wake of the 1970s fiscal crisis.
In 2020, New York Attorney General Letitia James and 57 elected officials raised concern over the lien sales’ disproportionate impact on communities of color as residents grappled with job losses and other hardships during the pandemic. A few days later, Gov. Andrew Cuomo issued an executive order granting their request to suspend the lien sale. The city held a sale in 2021, excluding liens on water debt, but the Council declined to reauthorize it the following year without reforms.
Mayor Eric Adams proposed permanently ending the program as part of his 2021 campaign. But he ultimately negotiated last year with City Council to restore it with changes, even as other officials and advocates pressed for a different system.
“People wanted the city to be more directly involved in collecting municipal debt,” said Council Member Sandy Nurse, who represents some of Brooklyn’s hardest-hit neighborhoods, such as East New York, and who co-sponsored the legislation resuming the sales.
About 15% of the delinquent properties on this year’s list are Brooklyn apartments and about one in five are properties with one-to-three units or condominiums under three units in the borough.
Homeowners end up on the lien sale list if they have $5,000 in property tax debt that is at least three years overdue, or between $1,000 and $3,000 in water debt at least one year overdue. Owners of one-family houses can’t end up on the lien sale if they only have unpaid water bills.
Properties with only water debt represent nearly 40% of all the liens on this year’s list, the data shows. Water delinquencies rose from roughly $823 million in fiscal 2022 to around $1 billion in fiscal 2024, according to the New York City Department of Environmental Protection.
“We’ve offered amnesty and conducted extensive outreach, but ultimately we need this vital enforcement tool to recover funds from delinquent accounts,” DEP Commissioner Rohit Aggarwala said in a statement.
Property owners on the list get multiple notices urging them to settle their debts before the city sells it to a private trust for roughly 70 cents on the dollar. The trust then contracts with private collection companies, some of which charge as much as 18% interest, plus other fees. Small debts can quickly snowball to unsustainable levels, increasing the odds of foreclosure.
Critics of the program assail the imbalance of the impact.
The city is six times more likely to sell a lien in a majority Black neighborhood than a majority white neighborhood, and twice as likely to sell a lien in a majority Hispanic neighborhood than in a majority white neighborhood, according to the Center for NYC Neighborhoods.
They also point to more forgiving debt collection processes in other major cities. San Francisco, for example, is in a “tax deed” state that imposes a lien on properties with delinquencies, but lets the local government hold it until the debt is settled. Baltimore removed owner-occupied homes from its tax lien sale five years in a row, focusing on homes assessed under $250,000 in recent years.
Niblack said New York’s lien sale remains an “efficient and effective mechanism” that induces New Yorkers to deal with their debt before facing foreclosure.
“The problem about abolishing the lien sale for any particular class of property is that you’re essentially writing blank checks to people who will just take advantage of the fact that there’s no enforcement,” he said. “That’s fundamentally unfair to everyone who pays their taxes in good faith when they were due.”
‘A City Mouse’
In addition to the new easy exit program, New York increased the combined income eligibility to enter the Property Tax and Interest Deferral Program from $86,400 to $107,300. The program allows eligible homeowners to defer property taxes for a fixed or indefinite amount of time.
Households also have options to enter hardship plans that limit how much they pay to between 2% and 10% of their income. As of May 9, only 31 property owners had taken advantage of the program this year, compared to 67 throughout 2021, the Department of Finance said.
Paula Swann, a 63-year-old Brooklyn homeowner, was able to get off the list with a new payment plan for her more than $5,000 water bill.
“I feel like the city has been generous to me,” Swann said after finalizing the plan at an April outreach event in Cypress Hills, Brooklyn. “Help was available.”
That gathering was among 50 the city hosted as part of its $2 million campaign to alert delinquent homeowners of new pathways to resolve their debts. City officials also made 40,000 robocalls to owners on the lien list, knocked on thousands of doors, and sent targeted mailers.
Natasha Hinckson, a community outreach coordinator for Brooklyn Neighborhood Services, a nonprofit that promotes long-term homeownership, said the lien sale is less of “a black box” than it used to be—but more still needs to be done to reach property owners.
“These events have a pretty low turnout compared to the amount of people on the tax lien list,” Hinckson said in an interview at the Cypress Hills event.
Even those who attend don’t always find a simple solution.
Ramon Juan Lopez Sr., who has lived in his Brooklyn brownstone for 40 years, said he came to the event hoping to take advantage of the city’s easy exit program. Lopez, 67, said he had accrued more than $17,000 in water debt after suffering a stroke and losing his job around 2017.
But Lopez said the process was “confusing” and he was struggling to get the required documentation together, some of which must be collected in person to get stamped. His mobility issues have exacerbated the challenge, and he was unsure if he’d get off the lien list before next week’s sale.
“I love being in Bushwick—I’ve watched this neighborhood change three or four times. I’m a city mouse,” he said.
Even after next week’s sale, changes are likely. The city’s decision to resume the lien sale included the creation of a 10-member task force to explore potential reforms or replacements to the city trust that buys the tax liens.
That task force of city officials and budget policy analysts has already issued preliminary recommendations calling for more transparency on the trust’s activities and for more affordable housing preservation opportunities prior to beginning the foreclosure process. Its final recommendations are due in September.
Nurse, the council member who co-sponsored the legislation reforming this year’s lien sale, said “there’s no doubt” the Council wanted to go further in improving the tax collection process for vulnerable homeowners. But she said this year’s reforms provide more support than before.
“Time will tell if we’re able to make a dent with the changes that were put in,” she said.
How we did it:
Tax lien sale data was taken from the New York City Department of Finance’s 90-, 60-, 30-, and 10-day notice sale lists, downloaded on May 12, 2025. The data was merged with the city’s Building Classifications list and the Property Valuation and Assessment Data for Tax Classes One through Four based on the property’s borough, block, and lot address. Also, data from the last sale for 2021 was downloaded from NYC Open Data and similarly analyzed. The Census data was gathered from the 2023 five-year American Community Survey on the tract level for the non-Hispanic white population. About 4% of the data could not be tied to Census tracts through geocoding. The tract was deemed majority white if more than 60% of the people in the tract are non-Hispanic white and roughly equal if the non-Hispanic white population is between 60% and 40%. About 0.1% of liens on geocoded properties were in areas where the margin of error made it impossible to accurately determine majority or did not have race data at all.
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