Defending Community Anchors: Protecting Our Places from Tax Lien Foreclosure

Charity organizations own buildings that house daycares and mosques, arts organizations and churches, food pantries and theaters; they own land for community gardens, playgrounds and farms. State law is clear that they are all entitled to property tax exemptions from the date they purchase the property until they don’t own it anymore.

On February 27, 2020, at the urging of the Protect Our Places Coalition*, the New York City Council passed Int. 245-2018, forbidding the Department from selling tax liens on charity-owned properties that it had granted exemption to in either of the last two years, on properties for which owners have filed an application for an exemption that the Department has not yet responded to, and on properties that the Department denied exemption where owners filed an appeal of that denial to the Tax Commission. The law went into effect on March 27, 2020.

City Council authorization is required for the annual lien sale to continue for any debt owed to City agencies; the current Council authorization for the administration to sell any liens at all expires at the end of 2020. In response to advocates’ concerns about charity properties being swept up in the annual lien sale without any acknowledgement by the Department in years prior, the City Council’s reauthorization of the lien sale in 2017 required the Department of Finance to post a separate list of all properties that it identifies for inclusion in the lien sale that have had exemptions in any of the last five years at least ninety days before the lien sale happens. Triumph: the list for the 2020 sale does not include any charity properties for which Intro 245 forbids the sale of liens due to property tax arrears.

Our primer, “Protecting Our Places: Know Your Rights on Not-for-Profit Property Tax Exemptions,” helps charities protect community property from tax-lien sales and apply for nonprofit tax exemptions.

*The ProtectOurPlaces Coalition is the Mary Mitchell Center Family and Youth Center, Northwest Bronx Community & Clergy Coalition (NWBCCC), Al Muneer Foundation, Fifth Avenue Committee, Bangladeshi American Community Development and Youth Services (BACDYS), Fort Apache Youth Center, Haven Ministries, Masjid Al Aman, Judson Memorial Church, Bricks and Mortals NYC, St. Nicks Alliance, New York State Council of Churches, Interfaith Assembly on Homelessness and Housing, The New York Board of Rabbis, Lawyers Alliance for New York, United Methodist City Society, Nonprofit New York, Presbytery of New York City, The 400 Foundation, the New York City Community Land Initiative & TakeRoot Justice.

Selected Press

After Years of Community Organizing, Nonprofits Now Get Much-Needed Relief from Dangerous Tax Lien Sale, Gotham Gazette | Mara Kravitz | March 27, 2020

New York City Council Examines Bills Aiming to Support Nonprofits, City & State: NY Nonprofit Media | Kay Dervishi | November 20, 2019

Stop selling tax liens against community charities, NY Daily News | Paula Segal and Frank Lang | Oct. 17, 2018

CityViews: Stop the Reverse Robin Hood Tax Scheme Threatening Community Nonprofits, City Limits | Paula Segal and Kobir Chowdhury | September 6, 2018

Department of Finance creates a taxing nightmare for nonprofits, Daily News | Edward Garcia, Lindsey Johnson, Felix Kuadugah | May 17, 2018

Crotona’s Mary Mitchell Center faces tax lien battle, Bronx Times | Sarah Valenzuela | May 15, 2018

It’s time to stop tax lien sales from snaring New York City’s nonprofits, City & State: NY Nonprofit Media | Council Member Antonio Reynoso | May 15, 2018

CityViews: The Council Must Protect Nonprofits from Lien Sales, City Limits | Rev. Richard Hartley | November 9, 2017

New Bill Would Protect Hundreds of NYC Community-Owned Properties, Next City | Oscar Abello | June 26, 2017

Not-for-Profits Facing Tax & Water Liens Get Reprieve from City, City Limits | Jarrett Murphy | June 2, 2017

City delays tax lien sales for houses of worship, other nonprofits, The Real Deal | Will Parker | June 1, 2017

City must stop tax-lien sale or erroneous bills will trigger foreclosures, Crains | Paula Z. Segal | May 9, 2017

Hundreds Of Nonprofits At Risk Of Having Their Tax Debt Sold—Even Though Many Should Likely Be Tax Exempt, Gothamist | Nathan Tempey | May 9, 2017

New York City Must Prevent Nonprofit Properties from Falling to Private Capital, City & State New York | Josh Bisker | May 3, 2017

Tax Trouble for Hundreds of City Non-Profits as Lien Sale Nears, City Limits | Jarrett Murphy | April 14, 2017

Tax Lien Sale Threatens Hundreds of NYC Nonprofits, Next City | Oscar Abello | March 24, 2017

Opinion: City Must Remove Nonprofits from Tax Lien Sale, Gotham Gazette | Richard Semegram | January 6, 2017

For Sale: Nonprofits, Urban Omnibus | D.W. Gibson | November 9, 2016

CityViews: Stop the Tax-Lien Sales That Will Destroy Community Gardens, City Limits | Paula Z. Segal | May 10, 2016

Advocacy Before the NYC Tax Commission

TakeRoot supported the Mary Mitchell Family and Youth Center, based on the Crotona neighborhood of the Bronx, in re-establishing a charity property tax exemption for a building the Center is developing. The Commission found that the NYC Department of Finance (DOF) had unlawfully revoked a previously established exemption. The Commission was clear that when the DOF attempts to remove exemption, it has the burden of proof to show that revocation is proper.

In this case, the DOF did not meet the burden. The Commission found that the Center had been taking consistent steps towards development of the building, even though a significant period of time had passed since acquisition. The Commission was convinced by the Center’s participation in the Community Land Trust Learning Exchange, by multiple design efforts and by its ongoing capital campaign.

Read the full decision here.

Testimony

Testimony to City Council Committee on Finance on Bills Aimed at Protecting Charity Organizations (11/19/2019): In support of the #ProtectOurPlaces coalition, TakeRoot testified for reforms in Department of Finance’s administration of the charity property tax exemption that is mandatory under New York State law. Video of the hearing, including TakeRoot and ProtectOurPlaces Coalition members testimony, is here.

Testimony to City Council Committee on Finance on Tax Lien Sale Bill (1/11/2017): TakeRoot, in collaboration with the New York City Community Land Initiative, called for changes to a bill reauthorizing the City’s tax lien program so that non-profit organizations and community members occupying properties with tax liens may continue to do so, and unused properties may be used in the ways that most benefit the surrounding communities.