Every year, the New York City Department of Finance sells the liens of properties that have unpaid debts. Missed payments, small or large -- such as property taxes or water bills -- can result in a lien sale and may eventually result in foreclosure.
To address this problem -- and help the city keep its commitment to remaining affordable for low- and middle-income families -- the Center for NYC Neighborhoods, an organization committed to preserving and protecting affordable homeownership in New York, launched a Web-based tool that tracks homes with liens that are currently scheduled to be sold.
The tax lien tracker shows users via an interactive map how many households in each Community District and City Council District fit into this category
“This is about making sure tax liens that come from unpaid property taxes or water bills don’t lead to additional foreclosures,” said Matt Hassett, director of Policy and Communications for the Center for NYC Neighborhoods. “It’s a complicated and slow-moving process as the city looks at those properties, and we noticed it was hard to figure out how the homes were broken down by geography. So we analyzed the lien sale data and sorted it by Community District and City Council District and used that to develop this tool to help the city and the city council members get a strong sense of where the tax lien risk is in their districts.”
The goal is to allow communities and stakeholders to assess the risk of their neighborhoods and aid neighbors in getting off the sale list by alerting them of their options, such as payment plans or special exemptions, before the sale. Once a tax lien is sold to a third-party collection agency, the company can add fees and high interest of up to 18 percent onto the debt.
“This provides city council members and neighbors a tool to reach out and help those that may be at risk,” said Hassett.
The tracker, said City Council Member Donovan Richards, is a tool to help keep hardworking families in their homes. “It contains 16,000 homes, listing them by council district and community board," he said. "District 31, which includes the neighborhoods of Laurelton, Springfield Gardens, Rosedale and the Rockaways, has some of the highest lien rates citywide.”
A public version of the tracker shows how many homes are on the list and in which general areas. But Councilmembers or Center for NYC Neighborhood partners can further sort the lien sale properties by address and see the exact number of people on the list at every stage of the process.
“Once a lien is sold, a third party then gets involved in collecting the debt,” said Hassett. “The city prefers not to sell the debt and to get people into a payment plan instead, so it’s helpful for the city to see this information and help people before it’s too late.”
Information about lien sales was previously available from the Department of Finance only in spreadsheet form, making it difficult to see what homes were affected in a particular neighborhood, Hassett explained.
“This is a big leap forward in terms of making this information more accessible so the city can get those property owners into repayment plans,” he said.
The lien tracker also contains information on payment agreements and exemption status for those who qualify, such as seniors and veterans.
“There are a lot of people who are eligible for exemptions but maybe don’t know about it,” said Hassett. “We are trying to alert people that there are exemptions and there are affordable payment plans with the city, and the city and advocates like us want you to take action and get back on track rather than having to deal with this third party, which can be overwhelming and scary. It’s all about the city’s mission of preserving and strengthening the stability of our neighborhoods.”
Richards said he believes the new Web tracker is something other cities could benefit from as well.
“If other cities are facing high rates of lien sales in addition to a home foreclosure crisis, this may also be an invaluable tool,” he said. “Pairing this information with increased access to resources to address this problem will be a lengthy but worthwhile process for our city, and I am certain that this success can be replicated elsewhere.”
This year, the New York City Department of Finance’s annual tax lien sale is scheduled for May 15, 2015.
Seniors, disabled individuals, or veterans, relatives of veterans, or active-duty military personnel, may qualify for an exemption. Others can enter into a payment plan of up to 10 years with the city.