Urging the Mamdani Administration to Suspend Tax Lien Sales

SUMMARY

The Housing and Urban Development (Farhana H. Choudhury and Julia Solo, Co-Chairs) issued a letter urging Mayor Mamdani to permanently stop New York City’s practice of selling municipal tax liens on real property to private, investor‑backed trusts. While the administration’s six‑month pause on the 2026 lien sale is welcomed, the Committee argues that continuing to sell liens to private entities undermines public accountability and harms homeowners and tenants. The letter emphasizes that recent City Council legislation authorizes delaying all lien sales until they can instead be transferred to a publicly accountable New York City Land Bank beginning in 2029, which the Committee views as a more equitable and transparent alternative.

The letter further explains that the existing tax lien sale system established in the 1990s allows financial institutions to purchase unpaid municipal debts at steep discounts and profit through added fees, interest, and foreclosure actions. The Committee echoes Mayor Mamdani’s own characterization of the lien sale as an outdated and harmful policy that disproportionately destabilizes communities and threatens affordable housing. The Committee calls for an end to private lien sales in favor of reforms that protect homeowners, prevent displacement, and align City practices with long‑term housing and equity goals.

REPORT

The Honorable Mayor Zohran Mamdani
Office of the Mayor
City Hall
New York, NY 10007

RE: Suspension of Tax Lien Sales to Protect Tenants, Homeowners and Communities

Dear Mayor Mamdani,

The New York City Bar Association’s Committee on Housing and Urban Development (the “HUD Committee”) calls on the Mamdani Administration to stop all sales of City-owned liens on real property due to municipal arrears until such sales can be made to a publicly-accountable New York City Land Bank starting in 2029, as authorized by Local Laws 56 and 62 of 2026.[1] The six-month pause the your administration has implemented, cancelling the 2026 lien sale, is a step in the right direction[2], but we urge your administration to stop all sales to investor-backed trusts that are managed by private corporations and not directly accountable to the City of New York.

The HUD Committee is composed of attorneys from the public and private sectors, not-for-profit organizations, academia, and law students. We meet regularly to discuss legal and policy issues related to the preservation and development of affordable housing in New York City. Our work includes issuing reports, making recommendations on policies and legislation, and hosting events designed to educate and facilitate discussion on crucial affordable housing issues.

As you clearly articulated in your campaign, the New York City Tax Lien Sale is “a relic of the Giuliani-era that has been a blight on our city for decades.”^[3] The lien sale is centered on the creation of an investment instrument managed by banks that purchase unpaid bills from the City at a steep discount, and then make money for its administrators and investors by charging fees and interest on the original amounts owed. The “trusts” formed to carry out these transactions not only take over the City’s role as debt collectors; they also obtain the right to foreclose on properties and auction them to the highest bidders.

The system has strained both renters and homeowners for decades, leaving tenants living in dangerous conditions and stripping families of property.^[4] It has also left neighborhoods to deal with blighted properties without help from government as crumbling buildings are excluded from lien sale year after year, and others have liens sold but the trust does not commence foreclosure for decades.

The 2025 Lien Sale proved that the lien sale is beyond reform. Despite well-meaning process changes legislated in 2024 intended to improve outcomes for both tenants and owners, the 2025 sale did not deviate from the pattern of pre-reform Lien Sales: the City published a list of nearly 30,000 properties with unpaid bills early in 2025, providing speculators a roadmap for finding owners who might be convinced to sell for less than market value or be susceptible to other schemes and three months to target these owners. Despite “Easy Exit” and payment plan options, approximately 15% of properties on the list had liens sold, consistent with the proportion sold each year 2015 through 2019.^[5]

Your administration made a promise to “stop the lien sale on Day One” and create a new collection system;^[6] our Committee respectfully urges to follow through. The City Council has already provided the structure for such a system, with a New York City Land Bank at its heart, and passed legislation to authorize selling liens to the New York City Land Bank starting in 2029.^[7] A pause on sales while a replacement system is established would give New Yorkers the promised relief while having a minimal negative impact.^[8] The New York City Land Bank is waiting in the wings; we urge you to take the next steps in its empowerment as the central force in the new era’s equitable municipal debt collection system.

Respectfully submitted,

Housing and Urban Development Committee
Farhana H. Choudhury, Co-Chair
Julia Solo, Co-Chair
Alexandra Hohauser, Co-Secretary
Gerrald Ellis, Co-Secretary

CC: Hon. Dean Fuleihan, First Deputy Mayor
Hon. Leila Bozorg, Deputy Mayor for Housing and Planning
Hon. Julie Su, Deputy Mayor for Economic Justice
Elle Bisgaard-Church, Chief of Staff
Ahmed Tigani, Commissioner for the NYC Department of Buildings