On Friday, Sept. 4, the ongoing, apparent feud between Gov. Andrew Cuomo and Mayor Bill de Blasio was, once again, played out in public when the governor undercut plans by Mayor Bill de Blasio to re-schedule the City’s annual tax lien auction to Sept. 25.

 

According to the Coalition for Affordable Homes, every year, homeowners who fall behind on their tax or water bills can find themselves subject to the City’s annual lien sale, a process through which the City sells outstanding tax and water debts, and the ability to collect them, to private investors. After the sale, the investors, through a trust, add steep interest and fees to the debts, which quickly balloon in size, vastly increasing the amounts owed by the homeowners.

 

This annual tax lien auction or sale is a financial headache for homeowners at the best of times, but the economic crisis arising from the coronavirus pandemic has clearly exacerbated the issue for many who are already dealing with the threat of foreclosure because they cannot meet their mortgage payments. Meanwhile, as the City tries desperately to prevent impending lay-offs of City employees in October, the tax lien sale was seen as one of the ways to raise much-needed revenue.

 

A representative from the Independent Budget Office said, “Based on the budget adopted in June [2020] and the city’s financial plan, we estimate a gap of $4.5 billion for 2022. the upcoming fiscal year, while the Mayor’s Office of Management and Budget estimates a $4.2 billion shortfall. For 2023, the Independent Budget Office estimates a $2.6 billion shortfall, while the Mayor’s Office of Management and Budget estimates a $3.0 billion gap.

 

The sale was originally scheduled to take place in the spring, then later in May, when it was once again postponed. On July 7, Mayor Bill de Blasio and Department of Finance Commissioner Jacques Jiha announced a further postponement to Sept. 4. As of Aug. 17, a total of 1,307 Bronx homes were subject to the tax lien auction or sale.

 

On Aug. 31, Attorney General Laetitia James and a group of 57 elected officials, including State Sen. Jamaal T. Bailey, State Sen. Luis R. Sepúlveda, City Council Member Mark Gjonaj, City Council Member Andy King, City Council Member Vanessa L. Gibson, City Council Member Fernando Cabrera, Congressman José E. Serrano, and City Council Speaker Corey Johnson signed a letter to the mayor, in which they called for the removal of 4,700 Class 1 properties or residential buildings with three or fewer units from the tax lien sale scheduled for Sept. 4, and to abstain from selling such liens until the conclusion of the COVID-19 emergency.

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Amid growing opposition from homeowners already struggling financially, the mayor issued a statement on Sept. 4 postponing the sale, once more, to Sept. 25. “COVID-19 has hit the pocketbooks of New Yorkers hard, and we’re doing whatever we can to give New Yorkers some relief,” the mayor said. “Postponing the lien sale will allow New Yorkers more time to work with the City on their best path forward.”

 

However, on the same day, the governor stepped in, extending the prevailing emergency statewide “PAUSE” order, already in effect since March when the pandemic hit, until Oct. 4. The order effectively gives him the authority to “…temporarily suspend or modify any statute, local law, ordinance, order, rule, or regulation, or parts thereof, of any agency during a State disaster emergency, if compliance with such statute, local law, ordinance, order, rule, or regulation would prevent, hinder, or delay action necessary to cope with the disaster emergency or if necessary to assist or aid in coping with such disaster..”.

 

This extension of the statewide PAUSE order renders it impossible for the City to proceed with the Sept. 25 tax lien sale. In fact, a separate statewide executive order issued by the governor dated Aug. 5, declaring a state of emergency following Storm Isaias, expired on Sept. 4, which coincided with the date on which the City’s tax lien auction was due to take place.

 

Both James and Cuomo released statements following the governor’s further extension of the executive “PAUSE” order. “As the economic impacts of COVID-19 rage on, the tax lien sale puts an unnecessary financial burden on New York’s homeowners, and especially communities of color,” said James. “It is the responsibility of government to relieve the financial hardships of the people wherever possible, not exacerbate them. I am proud that my office worked with Governor Cuomo and his team to take immediate action to protect hardworking homeowners during this stressful time.”

“COVID-19 caused enormous disruption in the daily lives of New Yorkers, including their ability to keep a roof over their head,” Cuomo said. “The tax and water lien sale was delayed in May in recognition of this hardship, and given the current economic climate it makes sense to delay it again so that homeowners aren’t facing further uncertainty. This measure is part and parcel with our ongoing efforts to help New Yorkers weather the ongoing public health emergency.”

 

Last month, on Friday, Aug. 21, Councilman Andy King arranged an impromptu press conference on the corner of Bruner Avenue and Pitman Avenue in the Wakefield section of the Bronx, where he had encouraged homeowners to sign a petition if they supported his call to ask the mayor, New York City Council Speaker Corey Johnson, and the City’s department of finance commissioner to pause the tax lien sale for homeowners until the economy stabilized.

 

“Let’s do away with it until we’re finished with the pandemic and we’re out of the state of emergency that we’re in,” he said. “You can’t ask people to try to figure out how to finance themselves, finance their families, and they’re worried about keeping a roof over their head. We’re talking not just over 200 houses in this district, but we’re talking thousands of properties in the city of New York.”

 

King said that homeowners were traditionally not as vocal as renters who made their concerns very clear throughout the pandemic and who succeeded in having their rent payments postponed. He said homeowners needed to similarly organize and be heard too.

 

“We are still dealing with the effects of COVID-19,” King said. “People are still having challenges with income. Families are still trying to adjust with this new normal, whatever that looks like. As we’re trying to put our children back into school, a lot of families will have lost jobs, a lot of people have debts, a lot of people are dealing with new health conditions.”

 

King said there were 268 properties in the whole neighborhood of Wakefield that were eligible for the tax lien sale in 2020, and added that there were 14,000 private homes in the whole community, which made it different from other communities which, by comparison, had a lot more rentals and therefore did not have to deal with tax liens.

 

“Out of the City of New York, the 12th Council District is number 10 on the list,” he said referring to home ownership rates. “Number one comes out of Brooklyn, number two, and three and four come out of Queens; those neighborhoods, those districts are the largest home-owner districts in the City of New York.”

 

He added that Manhattan had the lowest homeownership rate. “They don’t have the challenges that the property owner has here in the Bronx,” King said. “What people do not understand about homeowners is their taxes pay schools, our taxes pay for street cleaning, our taxes pay for quality of life that some people don’t have to pay, because they don’t own it,” he said. “But our reality is that as homeowners, we help sustain New York.”

 

King said that when he was a member of the budget negotiating team, and when the mayor would talk about housing, he and his other council members would frequently say that the mayor would exclude home ownership from housing discussions.

 

He said homeownership was a way to allow people to build equity and capital within themselves. “We got to get to a place that we urge people to have home ownership, but then, we got to protect home ownership in the same conversation,” he said. “That’s what today is all about. These tax lien sales have a greater impact on communities of color, as well as [on] our seniors, and this neighborhood truly meets that identification, because our neighborhood is made up of people of color who got hit the hardest in COVID-19. So, it only makes sense that the department of finance does something else different in this climate.”

 

King said homeowners shouldn’t have to be stressed out about a property tax system in the middle of a pandemic because of a $3,000 or a $5,000 bill when they were already worried about losing their homes.

He added that he was sure there were homeowners who didn’t even know that they were on a tax lien list either because they were not that adept at technology when it came to checking the situation online, or because they may have missed some notifications sent in the mail. He also decried the practice of selling the tax liens to private investors.

 

“Someone who’s outside of the neighborhood will say, ‘Well, I’ll pay that $5,000 back and then, they will negotiate with the lien when selling it back to you, and they want to charge you $10,000 when the bill was originally $5,000, and if you don’t pay over on time they have the right to claim the property,” he said. “I don’t know what you all are sensing but something’s wrong with that. I told the City that just sounds like a property grab to me.”

 

He said there were homeowners who were trying to figure out how to raise the money to pay the tax because their priority was their mortgage, keeping a roof over their heads, and keeping food on the table. “There are homeowners right now who just don’t know, so why are we going to put them in a scenario that they can lose their property to somebody who has no relationship to a neighborhood, but who can just buy the finance to buy a tax lien,” he said.

 

Juan Santana from The Bronx Neighborhood Housing Services CDC, Inc. also spoke at the event. He said his organization had been in partnership with the City of New York and the State for almost 35 years helping homeowners keep their homes by providing downpayment and closing cost assistance to buy homes and increase equity.

 

“We think that the City should look at the situation, should look at that financial tsunami that’s coming up because it’s coming – all of the forbearance agreements will sunset very, very soon,” he said. “So if you put on top of homeowners having to come up with $20-30,000, just to get back on their mortgage, just to get covered on their mortgage, now we are asking them that on top of that, worry about the tax lien and the sale of your tax lien, we agree with Council Member King that it should be postponed.”

 

On the corner of Bruner Avenue and Nereid Avenue in the Wakefield section of the Bronx on Aug. 21, a sign was affixed to a pole advertising the purchase of houses for cash in the neighborhood.

 

Norwood News asked the councilman if the City had done anything to liaise with the financial services industry in order to come up with some sort of agreement to help homeowners renegotiate their mortgage payments, giving the current economic crisis.

 

“Right now, there has been no such conversation,” he said. “The Department of Finance has the ability, and sometimes I pray for them, because sometimes they only look at the number, they look at a spreadsheet, they don’t see any human being behind that spreadsheet, and all decisions move in that direction, so sometimes we got to really put the pressure, and show the human component because their job is to collect the data for the City of New York.”

 

King added that if the mayor is the head of the ship, and the mayor says push the button to collect, then that’s what they do. “So, I’m asking the mayor, I’m asking Corey Johnson, more important, I’m asking the commissioner of finance, let’s do the right thing,” he said. “For one of the first times, let’s do the right thing by homeowners.”