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New York Revives Property-Tax Lien Sales Paused During Covid (1)

Dec. 17, 2021, 9:45 AMUpdated: Dec. 17, 2021, 8:03 PM

One of the last acts of the outgoing administration of Mayor Bill de Blasio will be to sell the homes of New Yorkers who fell behind on their property taxes.

After pausing tax-lien sales for most of the Covid-19 pandemic, New York City’s Department of Finance scheduled a sale for Friday—just a week before the Christmas holiday. The administration decided to press ahead, despite calls by community advocates to delay the sales until residents impacted by Covid-19 can apply for federal aid to catch up on payments.

There were 7,500 single- family homes, condos and others on the lien sale list as of Dec. 10. The number fell to roughly 3,200 as taxpayers rushed to pay off their debts and avoid foreclosure, and is expected to decline further as transactions get completed, according to the city’s finance department on Friday. Fewer than 1,000 received hardship exemptions for Covid-19 or severe weather.

“Putting homeowners in a position where their homes are likely to be foreclosed upon in the midst of the pandemic is wrong and short-sighted, given that federal funding will be released in the coming weeks or months to prevent foreclosures,” said New York state Attorney General Letitia James, who sent a letter to de Blasio in late October urging him to delay.

“This public health crisis has exacerbated the impact of lien sales on our vulnerable communities,” she said, “and we must do all we can to allow them time to apply for federal funding, while also supplying them with the resources to help them recover.”

A spokeswoman for the mayor’s office didn’t respond to requests for comment. The attorney general’s press office said it never received a response from de Blasio on the matter.

Federal Aid On the Way

In a little over two weeks, Covid-affected homeowners will be able to apply for government aid to cover housing costs, if not, they will face burdensome surcharges and fees that will be immediately applied once the liens are sold, legal advocates argue. Homeowners who apply post-sale will then need more money from the limited set of funds than would otherwise had the liens not been sold.

“Most of the homes are in communities of color that have already borne the brunt of the Covid-19 pandemic,” said Jacquelyn Griffin, senior staff attorney in the Neighborhood Economic Justice Project. “Selling these liens will subject homeowners to high interest and transaction fees, and many of them will end up in foreclosure.”

To be sure, homeowners on the 2021 lien sale list had fallen behind prior to the pandemic’s eruption, but job loss, family deaths, and other hardships may have handicapped their ability to dig out of debt.

Most homeowners on the list are likely eligible for some type of protection—an exemption for senior, disabled, or veteran homeowners—that could prevent the lien from being sold. However, many residents are usually not aware of the exemptions or city financial programs available to them to help pay or subsidize their property taxes.

“DOF is more comfortable as a collection agency up until the point of sale than it is in their legislated role as the agency that also implements protective programs,” said Griffin. “The lien sale kicks people while they’re down, and over time it has led and will continue to lead to rapid gentrification and loss of affordable housing and equitable and diverse communities.”

Pandemic Shield

New York residents have been shielded from being subject to a tax lien sale since state and city officials agreed in 2020 to give struggling residents more time to pay off debt and enter payment plans. The temporary pause coincided with other measures taken by city and state officials to offer eviction and foreclosure moratoriums during the pandemic.

When residents fall behind on property taxes, water and sewer bills, their homes can become subject to a lien sale, and if unpaid, could end in foreclosure. Tax lien sales typically work as an enforcement mechanism, used by cities across the country as a last resort to recoup lost tax revenue when property owners become seriously delinquent.

The program brings tens of millions of dollars to the city’s coffers each year to help pay for services like police, garbage collection and other items. It dates back to former Mayor Rudy Giuliani.

During the last lien sale in 2019, the city sold more than 3,700 liens generating about $80 million in revenue and recouped $300 million in unpaid property taxes prior to sale.

“It is a legitimate policy tool to collect unpaid taxes, water bills, and other charges that are legitimately due to the city,” said Ana Champeny, deputy research director for the Citizens Budget Commission, a nonprofit think tank. “During an emergency such as the pandemic and recession, the city should ensure that the appropriate exceptions are in place for homeowners facing distress.”

(Updates with reduced number of at-risk homes in third paragaph. )

To contact the reporter on this story: Donna Borak in New York at

To contact the editors responsible for this story: Bernie Kohn at; Jeff Harrington at