The tax lien sale is coming up on Dec. 17, where overdue property taxes are sold to a third party trust. It often spells foreclosure for those with difficulty paying, as the fees, once their debt is sold, can be high. Brooklyn City Council Member Robert Cornegy is leading a large group of council members in putting a halt to the lien sale until conditions are better. It’s evidence that COVID-19 has upended yet another city process.
Cornegy said, “the sale this year will likely force minority property owners to lose generational wealth. It also threatens the homes of many renters, all while we are still reeling from the impacts of the COVID-19 pandemic.”
The group of 17 council members covering all boroughs noted in a letter to Mayor Bill de Blasio Oct. 27 that people are still recovering financially from the economic shutdown caused by the pandemic. Council Member Fransico Moya (D-Queens) says those who will face qualification for the lien sale are the most “financially vulnerable.”
“The City must postpone the December 17th property tax lien sale if we are to truly ensure that we are supporting a fair recovery,” Moya said.
Currently, property owners can submit a COVID-19 hardship declaration to try and remove their property from the lien sale. This is exclusive to individuals, not businesses, who own buildings with 10 or fewer residential units and have experienced a COVID-related hardship. Besides a severe loss of income during the pandemic, the owner may qualify if one or more of their tenants were unable to pay rent in full since March 1, 2020.
The council members say this particular situation puts property owners in an even worse position, and it’s not the first time the council fought with the mayor’s office over the lien sale. In 2020, Council Speaker Corey Johnson tried to put a stop to the sale of the property owners’ debts, after it was already delayed by the start of the pandemic.
Some members of the council saw this as a chance to finally reform the initiative. “In good times, the lien sale is highly unfair and unnecessary, as the city has more than sufficient collection tools at its disposal. But these are far from good times,” said Council Member Kalman Yeger (D-Brooklyn).
During the 2020 debate on this issue, Cornegy and Yeger’s districts were going to be highly affected by the lien sale. According to 2020 data from the Department of Finance, Cornegy’s District 36, which covers Bedford-Stuyvesant and parts of Crown Heights, had 227 properties on the lien sale list. Now they’re in a similar position, waiting for the mayor’s response again before the December 17 sale, and there are 375 properties in Cornegy’s district on the list today.
A City Hall spokesperson told Politics NY, “Over the past year, the City has greatly reformed the lien sale to help more homeowners while maintaining essential city services. We are currently working with the Task Force on further reforms.”
The sale is still planned for December. The city has also increased the amount of money for advocates to do outreach with property owners, but it is unclear how much of that will be achieved as the pandemic rages on.