NEW YORK CITY (WABC) — The City of New York may have a big budget shortfall, but it’s not going to sell your home to make up the difference.
7 On Your Side Investigates has reported for the past year on the issues surrounding the city’s tax lien sale. On Wednesday, Mayor Zohran Mamdani said he’s putting a pause on the entire process for at least six months.
“Our current property tax lien sale process to collect overdue taxes and fees is broken — allowing predatory debt collectors to profit off the backs of working and middle-class homeowners, driving New Yorkers out of their homes,” said a statement from a City Hall spokesperson.
The statement went on to say, “We are pursuing ways to improve outreach, utilize new tools such as a landbank, and develop protections for descendants living in their family home.”
Housing advocates are commending the administration for pausing the sale this summer.
“It’s a great decision to just reevaluate and look at the tax lien sale as a practice because ultimately, we want to help homeowners who need help,” said Iziah Thompson with the Community Service Society.
Here’s how the process has worked for the past 30 years.
If you have a higher unpaid property tax or water bill, the city sells those bills at a discount to what’s called a trust, which is a group of private investors. It’s then up to the investors to collect the money with interest. If the balance isn’t paid, the home could go into foreclosure and be bought at auction.
As Eyewitness News first reported last August, that’s what happened to Filmore Brown.
“I don’t want anybody to go through what I’m going through, it’s more than I can bear,” Brown said.
He paid off his $1 million Brooklyn home but it was sold out from under him over a $5,000 unpaid water bill. A bill he says he didn’t know he had.
“It was stolen from me, I need it back,” Brown told Eyewitness News.
Brown’s attorney, who deals with cases like his every day, says the lien sale negatively impacts people in minority communities the most.
“The whole system is prioritizing short-term revenue instead of long-term community stability,” said attorney Alice Nicholson. “The whole system of selling to investors needs to be eradicated.”
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