Activists And Electeds Cheer End Of The Rudy Giuliani Created NYC Tax Lien Sale

February 28, 2022

Today, activists and elected advocates gathered on the steps of City Hall to celebrate the end of the Rudy Giuliani-created Lien Sale program. Since 1996, New York City has been selling the right to collect delinquent property tax and water debt at a discount to a privately administered hedge fund-backed Lien Trust.

Investors in the trust and private debt collection agencies made millions of dollars every year since then collecting New Yorker’s debts.

Investors in the trust and private debt collection agencies made millions of dollars every year since then collecting New Yorker’s debts.

As of today, the City can no longer continue this practice unless the City Council passes a bill to reauthorize it. The lien sale was conducted in December 2021 was the last sale the City Council had authorized.

Under the expired system, the City transferred all the debt that New York property owners owed to it to a third party Lien Trust not invested in the future of our neighborhoods.

The Trust in turn hired debt servicing firms that would make millions every year just from fees charged to homeowners and landlords who have their tax, water, sewer, and emergency repair bills sold as liens to the Trust.

The servicing firms … were private companies with little transparency, patchy pasts, and a history of lobbying for laws and policies that will directly benefit their bottom line.

The servicing firms used by Lien Trusts formed in recent years (MTAG Services, LLC and Tower Capital Management, LLC) were private companies with little transparency, patchy pasts, and a history of lobbying for laws and policies that will directly benefit their bottom line.

To raise money to buy the City’s collectible debt at a deep discount – approximately 72% of the face value of the bills sold – the Lien Trust sold private bonds to investors who were repaid with interest through interest and additional fees added directly to individual liens, and through post-foreclosure sales of the buildings themselves.

By submitting this form, you are consenting to receive marketing emails from: Harlem World Magazine, 2521 1/2 west 42nd street, Los Angeles, CA, 90008, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Because bond sales are done through a private placement, the identity of those investors has never been revealed and will never need to be.

In general, the industry is dominated by large-scale investors and hedge funds that have no stake in our communities.

“We are so glad to stand together with our elected advocates today to celebrate the end of the Lien Sale, which has lined debt collection firms’ and investors’ pockets with money and property taken from low-income New Yorkers for far too long,” said Debra Ack, East New York Community Land Trust. “Tenants and homeowners should have the option to stay in their communities even when they fall behind on payments to the City. Community land trusts in all five boroughs are ready to work with City agencies and property owners in arrears to the city to secure affordable housing for the long term and stabilize our communities.”

“The old system enabled debt collectors and hedge funds to make millions at the expense of New York families and neighborhoods,” said Paula Segal, Senior Staff Attorney at TakeRoot Justice. “The future of our neighborhoods is bright as we stand together with Council Members and other elected advocates who prioritize stability and affordability instead of a quick up-front payment and a cash cow for finance. What is lost when longtime residents are pushed out by the Lien Trust and its debt collectors is worth so much more than the partial bill payments that the City gets from the Trust when liens are sold. With Lien Sales behind us, New York will benefit from neighborhood stability and the resilience of communities that have emerged together through the recent pandemic and the crises of investment of the last century.”

Advocates are urging the City to develop a system for collecting municipal debts that prioritizes neighborhood stabilization and provides options for homeowners and tenants to remain in the neighborhoods they have helped create.

“Today marks a new chapter for New York City,” said Council Member Sandy Nurse. “For years, the tax lien sale has disproportionately harmed districts like mine and has stripped Black, brown, senior and low-income homeowners of their homes while inviting predatory real estate practices into our neighborhoods. We now have a unique opportunity to implement a more just system that keeps people in their homes, builds true community wealth, and maintains permanent affordability while fostering real accountability. We look forward to working with the administration, the Speaker, and all of the organizers on the ground to build this better future.”

“The tax lien sale is an outdated and ineffective relic that shows its age in its disproportionate impact on people of color and senior citizens,” said Council Member Carlina Rivera. “As the legislation authorizing the lien sale expires, we have an opportunity to stop the harmful practice of balancing the City’s books at the expense of our most vulnerable communities. In its place, we must create and advocate for policies that keep people in their homes, uplift systemically overlooked communities, and preserve intergenerational financial stability.”

“We’re happy to celebrate the expiration of the tax lien sale, which has placed the financial futures of communities of color in the hands of third-party debt collectors. It has been a grave injustice,” said Council Member Shekar Krishnan. “We must stop selling our residents’ debts to private investors, and instead move to alternatives like community land trusts. We must keep New Yorkers in their homes.”

“On the night before we end the practice of the lien sale, I look forward to waking up to a New York that prioritizes our communities of color, that fights to preserve generational wealth, and stands firmly against economic injustice and predatory real estate practices,” said Council Member Crystal Hudson. “I am inspired by the work activists, organizers and our neighbors put in to make this happen. It is proof that solidarity and organizing are winning strategies in the fight for the more just and equitable world we strive for. While we celebrate today, we should feel a renewed confidence and drive to continue our fight for racial and economic justice tomorrow.”

“Today is a historic and formidable day as we gather to celebrate the sunset of the Tax Lien Sale law,” said Council Member Farah N. Louis. “Black and brown homeowners have disproportionately faced economic hardship since the Giuliani-era law took effect, designed purposefully to help hedge-fund investors raise revenue from the city. Our city must stand by its commitment to end racial inequality by identifying alternate ways to support its economic growth without destabilizing marginalized communities.”

“The tax lien sale has not supported our homeowners,  said Chair of the Housing and Buildings Committee Pierina Sanchez. “I join my colleagues and advocates reiterating why a renewal of the tax lien sale in this current form will not protect our most vulnerable homeowners. As I have said before, the tax lien sale has turned out in practice to be another predatory attack on homeownership and wealth-building against NYC’s communities of color. Let this expiration serve as an invitation for us to create an innovative and equitable way for homeowners to pay necessary liens without losing their homes. As Chair, I commit to doing the work to stem displacement, protect homeownership, and build inter-generational wealth within our City.”

“The tax lien sale is a relic of an era in which New York’s government was not just nonresponsive to the needs of the people, but often openly antagonistic to them,” said Council Member Chi Ossé. “That era is over. As this predatory policy expires, this new City government must enact policy that protects the wealth of marginalized communities, stabilizes our neighborhoods and keeps people in their homes.”

“Historically, the tax lien sale has disproportionately stripped generational wealth away from working-class homeowners of color by selling off their debt,” said Comptroller Brad Lander. “This debt sale practice hit struggling families the hardest during the pandemic. Now that the practice of tax lien sales is ending, we must use this moment to collectively create new models of community ownership, while addressing outstanding debts and maintaining funding for the delivery of basic public utilities.”

“Today is a day to celebrate and thank activists and elected officials who have fought to eliminate the Rudy Giuliani-created Lien Sale program, a program that has benefited developers while leading to displacement and loss of generational wealth,” said Brooklyn Borough President Antonio Reynoso. “We’re overdue on putting real people and their benefits first and developing policies that are good for individuals and communities at-large.”

“It is 25 years past the time to end the City’s lien sale. It enriches wealthy investors at the expense of low- and moderate-income New Yorkers, and most New Yorkers of color, who are put at risk of displacement,” said John Krinsky, board member of the New York City Community Land Initiative. “There is no excuse to privatize the debt and allow our neighbors to be threatened or left exposed to scams. When New Yorkers are in trouble, we need to extend a hand; when their homes are at risk, we need to find ways to stabilize them.”

“With the expiration of the city’s tax lien sale authorization, we call on the Mayor and the City Council to replace this harmful, Giuliani-era system with a new program that keeps low-income homeowners in their homes and creates a pathway for the development of safe, stable, and permanently affordable housing,” said David R. Jones, Community Service Society of New York.

For decades the City’s tax lien sale has served to destabilize and extract wealth from Black, brown, and low-income neighborhoods…

“For decades the City’s tax lien sale has served to destabilize and extract wealth from Black, brown, and low-income neighborhoods,” said Will Spisak, senior program associate at New Economy Project. “As we celebrate the sunsetting of the lien sale authorization, we call on the City to make sure that this predatory policy is abolished once and for all and to build, in its place, an equitable system that keeps people in their homes, builds community wealth and expands permanently-affordable housing and community space across the city.”

“In an era where Americans are acutely aware of how far-reaching the effects of racism continue to be, it’s unconscionable for New York City to continue using such blatantly racist a system as our tax lien sale, which benefits a few private individuals at the expense of hard-working New York homeowners- a disproportionate number of them with darker skin,” said Memo Salazar of Western Queens Community Land Trust. “With the rise of Community Land Trusts in this city, we now have a Plan B. It’s high time we ditch Plan A.”

“If the Adams administration is truly committed to protecting affordable housing, especially in Black, brown and AAPI communities, they will abolish the tax lien sale in NYC,” said Rachel Goodfriend of Brooklyn Level Up. “There are several alternatives to the lien sale including the transfer of vulnerable properties to community land trusts that are dedicated to providing crucial and desperately needed affordable housing for homeowners and tenants at risk of displacement. The tax lien sale is an unjust and racist (in its impact) legacy of unsound Giuliani era policies that denies long-time New Yorkers their most valuable assets and devastates BIPOC communities. It strips families of intergenerational wealth and by extension, neighborhoods of communal wealth. The devastation must come to an end.”

“East New York and Brownsville are home to a majority Black and brown homeownership,” said Alexa Sloan, Coordinator of the Coalition for Community Advancement. “Our homeowners are seniors, City workers and front line workers. We are under attack. In 2021, while mortgages were in forbearance and the tax lien sale was on hold, 20% of homes in East New York were bought by investors and a quarter of homes in Brownsville. Now with mortgage forbearance lifted and with the tax lien resuming, we are hearing from many of our members that they are facing foreclosure. The city needs to act now. The tax lien must sunset today and never return.”

The Abolish the Tax Lien Sale Coalition is made up of East New York Community Land Trust, Community Service Society of New York, New Economy Project, TakeRoot Justice, Western Queens CLT, Brooklyn Level Up, Bronx Community Land Trust, Northwest Bronx Community and Clergy Coalition, Coalition for Community Advancement and the New York City Community Land Initiative.

We're your source for local coverage, we count on your support. SUPPORT US!
Your support is crucial in maintaining a healthy democracy and quality journalism. With your contribution, we can continue to provide engaging news and free access to all.
accepted credit cards

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles