Replacing the Predatory Lien Sale

Since 1996, the NYC Tax Lien Sale privatized a core public function by transferring the management and collection of property tax arrears to private investors. Investors and private debt servicers extracted massive amounts of wealth from low-income Black and brown communities, pushed elderly and low-income homeowners and tenants into further distress, and leave neighborhoods littered with tax distressed vacant lots. Through the lien sale, the City squandered powerful leverage it could have used to develop and preserve tax- distressed properties as permanently affordable housing that New Yorkers urgently need, and for other community needs.

In April 2020, following the leadership of East New York CLT, we formed the Abolish the NYC Tax Lien Sale Coalition to bring attention to the speculation and displacement fueled by New York City’s tax lien sale. Our coalition led the call for an abolition of the tax lien sale and the creation of a new, equitable debt collection system that works for all New Yorkers. We conducted outreach to countless homeowners and tenants, produced reports, held rallies and press conferences, and beat the drum about the predatory nature of the lien sale. After years of our advocacy and organizing, the City Council and Administration has finally recognized that the lien sale exacerbates inequity.

In December 2025, our organizing won a package of City Council bills that would lead to the complete abolition of the lien sale by 2029 and its replacement with a land bank. The land bank would be charged with keeping people in their homes, preserving homeowners’ equity, and supporting the growth of affordable housing under community control. Mayor Eric Adams vetoed this bill package; the City Council now has until February 7, 2026 to override the veto set lien sale abolition into motion.

As a result of reforms our Coalition pushed for in 2024, if the City holds any lien sales between now and 2028, they will include:

Robust funding for community based organizations to assist property owners. This assistance will help ensure that owners avail themselves of all that they have a right to, including exemptions, payment plans and the other options that will stem displacement of homeowners and fund outreaching to tenants living in tax distressed properties to support their organizing for improved conditions and future community control.
Affirmative inspections of buildings that are chronically on the lien sale list to help address quality of life issues for tenants.
Comprehensive notices that will let owners know the exemptions they may be entitled to, payment plans available to them, and other options they can use to avoid being included in the lien sale.
A voluntary “last resort” option for owners to remain in their homes by voluntarily transferring their home to a community land trust or other organizations in exchange for clearing their tax debt while retaining some equity.

Testimony

Testimony the NYC City City Council Committee on Finance (11/13/2025): “For years, my team and I have been working on a parcel-by-parcel basis to achieve better outcomes for communities living near, tenants living in and owners of properties with municipal debts. We have filled out exemption forms, trained advocates on COVID exemptions and last year’s novel “Easy Exit,” removed the authority for liens to be sold while an exemption denial is pending appeal, spent hundreds of hours on the phone with Tax Payer Advocates and Ombudspersons, and have only chipped away at the edges of a broken system. Today, I am thrilled to see our work pay off and path forward that does not include any liens sold to investor-backed trusts.”

Testimony the NYC City City Council Committee on Finance (1/14/2025): “Intro 783 would require Department of Finance to record tax liens in ACRIS once that debt exceeds five thousand dollars past due for a period of more than three years, even when that lien continues to belong to the City and is not sold. This can alert property owners to accruing debt about which they may not be aware and help them avoid the lien sale, speculation, and foreclosure. It will aid owners themselves, not speculators, who already have all the tools they need to find distressed property owners, including the lists of likely- distressed property owners that are published in connection with the lien sale which provide a city-wide road-map directing them to which individuals might be a good target, see “How Savvy Investors Can Spot Distressed Properties Before NYC’s 2025 Tax Lien Sale.” Recording by property in ACRIS would give owners new tools, thus leveling the playing field.”

Testimony to the NYC City Council Housing and Buildings Committee on Proposed Legislation to Restart City Foreclosure Program for “Distressed” Properties (10/4/2024): “Thank you so much for accepting our comments on the Housing Rescue and Resident Protection Act today. We are thrilled that we share a priority for using municipal debt collection as a strategy for tenant protection, increasing cooperative homeownership opportunities and the preservation and development of homes and other community assets. We also share the Council’s urgency to bring a city foreclosure program for distressed properties back online as a tenant protection measure–the longer we don’t have such a program, the more tenants make their homes in buildings that are not safe for their occupancy while landlords shirk their obligations to maintain safe housing..” (Hearing video, 9/30/2024).

Testimony to the NYC Council Committee on Finance (6/18/2024): I am very encouraged that the reauthorization bill the Committee Chair plans to introduce this week incorporates many new preventative measures to divert indebted low income homeowners from the lien sale, provide new options for them to stay in their homes and will require HPD to inspect some rental buildings that are included in the lien sale process (those with a lien to value ratio of 15% and inclusion in two of four proceeding lien sale notice processes). That being said, TakeRoot hopes that there is still room for improvements before the bill is voted on by the full Council: (1) Incorporate tenants! (2) Limit the authorization term to three years. (3) Reveal who puts the trusts together. (4) Keep public control of debt on problem properties.

Testimony to the NYC Council Committees on Housing and Buildings and on Government Operations (6/6/2023, updated 6/7/2023): Worse, the lien trust system is based on the existence of a “graveyard” trust (established in 1998 and called “1998-2”) which accepts liens on properties that would pose a risk to bond offering. Unlike the trusts created in each sale year, this one does not expire when investors have been paid and bonds satisfied; it continues to this day and currently holds nearly 6,000 liens that have not been redeemed or defected, accumulated during the quarter century of lien sales and assignments from trusts that were closed down after investors were paid.

Testimony to the NYC Council Committee on Finance on FY24 Budget (3/6/2023): I am here to draw attention to the need to adjust the preliminary budget to reflect the fact that the City does not have authority to sell tax liens and to add support for a new collection system for municipal arrears; the preliminary budget’s inclusion of $80 million revenue from the lien sale in the budget is misplaced. On the expenditures side of the budget, the amount allocated to the Department of Housing Preservation and Development for Community Land Trust (CLT) contracts must be increased to reflect the expanding capacity of community land trust organizations and the expanded opportunities for the City to partner with CLTs on crucial preservation and development projects that stabilize housing and other key types of real estate across New York City Neighborhoods.

Testimony to the NYC Council Committee on Finance at Oversight Hearing on Tax Reform (11/15/2022): The tax lien sale is the definition of bad policy that prioritizes private investors over homeowners, tenants and the future of our City. We ask that this committee ensure that the tax lien stays in our past. We urge you not to support ANY legislation that involves selling property tax debt to an unaccountable third-party entity. We also ask that this committee work with us to institute a new system of enforcement with the following goals: 1) re-municipalizing public debt collection, 2) preventing displacement of homeowners and tenants, 3) promoting long term affordability through community land trusts and partnerships with trusted non-profit developers, and 4) creating a pathway for productive use for vacant lots and unoccupied buildings.

Testimony to the NYC Council Committee on Finance on FY23 Budget (3/2/2022): We must make sure that the Department of Finance has the resources to bring debt collection into the ambit of the City in this and coming years. We would like to see a system that both incentivizes timely payments and allows owners who simply cannot pay to resolve their debt in a manner that increases the City’s supply of affordable housing. The City’s growing number of Community Land Trusts (“CLTs”), located in nearly every neighborhood, would be ideal partners for such a system: the City could forgive the debts of owners who voluntarily transfer the land beneath their properties to CLTs. This would allow them and their tenants to stay while preserving some equity.

Testimony to the NYC Council Committee on Finance on Tax Lien Sale Reauthorization (December 9, 2020): TakeRoot called on the City Council to abolish the lien sale and expand the pipeline of properties headed for transformation to social housing and community ownership.

Testimony to the NYC City Council Oversight Hearing: Examining the City’s Deed Theft and Deed Fraud Crisis (October 13, 2020): TakeRoot testified to connect the dots between the deed fraud crisis and the NYC Tax Lien Sale.