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PUBLIC TESTIMONY

Testimony by Paula Segal, Representative from Abolish the NYC Tax Lien Sale Coalition

2:18:23

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9 min

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Paula Segal, representing the Abolish the NYC Tax Lien Sale Coalition, testified on proposed legislation to reform New York City's 3rd party transfer (TPT) program. She expressed support for using municipal debt collection as a strategy for tenant protection and increasing cooperative homeownership opportunities, while emphasizing the urgency of bringing a city foreclosure program for distressed properties back online.

Segal outlined three main categories of comments on the bill: which properties should be included in the foreclosure program, owners' rights, and harnessing the preservation powers of community land trusts.
She emphasized the need to focus on properties that fall between those the agency can handle administratively and those that have liens sold to privately managed tax trusts.
Segal advocated for stronger language to prioritize non-profit organizations and community land trusts in property disposition, and suggested improvements to the handling of HDFC cooperatives within the program.

Paula Segal

2:18:23

Thank you so much.

2:18:25

I think I'm gonna go over I hope that's okay.

2:18:28

And thank you so much for this hearing.

2:18:30

It's been really insightful.

2:18:32

I'm also happy if anybody has questions that are burning to maybe try to answer it.

2:18:39

Anything.

2:18:41

But I'm gonna be delivering testimony on behalf of the abolished Attack Fintile Coalition.

2:18:46

The Coalition is made up of grassroots groups and technical assistance providers, New York City Communities for change, Eastern York Community Land Trust, Western Queen CLT, Brooklyn Level Up, Bronx Community Land Trust, the Northwest Bronx Community, Clarity Coalition, the Coalition for Community Advancement, the New Economy Project, the New York City Community Land Initiative, many management, and my organization take rate justice, where I am seeing your staff attorney in our equitable neighborhoods practice.

2:19:14

We're all thrilled that we share a priority for using municipal debt collection as a strategy for tenant protection, for increasing cooperative homeownership opportunities and for the preservation and development of homes and other community assets.

2:19:27

We also share the council's urgency to bring a city foreclosure program for distressed properties back online as a tenant protection measure.

2:19:35

The longer we don't have such a program, the more tenants make their homes and buildings that are not safe.

2:19:40

Well, landlords jerk their obligations and continue to collect rent.

2:19:44

It's really hard to hear that it sounds like the agency understands that urgency.

2:19:49

As well, and I hope we'll be able to get this done by the end of the year.

2:19:54

Our comments on the bill fall into 3 categories, which properties should be included in the foreclosure program, owners rights, and harnessing the preservation powers of community land trusts.

2:20:07

We'll be submitting and writing, but I wanna share fire highlights and respond to a few things that I heard in the conversation.

2:20:14

That was awesome, and thank you for all your questions before.

2:20:19

So first of all, I just wanna make sure that that gap, that is be the falls between the number of properties that the administration Would

Pierina Ana Sanchez

2:20:26

you like to continue?

Paula Segal

2:20:28

Yes.

2:20:28

I would.

2:20:28

Thank you so much for the Thank you.

2:20:32

So I just wanna make sure that we're really focusing on the properties that fall on the gap between the properties that the agency thinks it can handle, through administratively, for closing on and routing to responsible owners and the properties that have lien sold to privately manage tax and trust.

2:20:51

And we just wanna make sure that we're not recreating a situation where anything that the agency can't handle just goes to these private managers that have no responsibility to you all, that have no accountability to any of the community boards above presidents, any of the elected officials in the city.

2:21:09

There needs to be an automatic removal from the lien sale, based on set criteria, even if actual foreclosure by the city is staged and prioritized to honor capacity limitations.

2:21:23

Just wanna remind everybody that the taxing trust is not an our ally.

2:21:28

And it's run by private companies, and we've seen decades of its past practice.

2:21:33

There are lots of situations where it will not foreclose quickly.

2:21:36

And if it does, of course, the property goes to auction to be bid on by the highest bidder, not to be transferred to a responsible vetted.

2:21:44

Landlord by HPD.

2:21:46

We also want to see language added that were that would require all vacant land with debt no matter the tax class to be routed directly to city foreclosure.

2:21:56

Without any reference to violations.

2:21:57

It was really heartening to hear that HPD turns out does have a way to do this with neighborhood restore.

2:22:03

They're working on 8 vacant lots and getting them to developers.

2:22:06

That's awesome.

2:22:07

Let's get the rest.

2:22:08

We are some vacant land in the city is tax class 1, some is tax class 2, some is tax class 4.

2:22:17

How those tax classes got assigned?

2:22:19

Does that seem to have any rhyme or reason?

2:22:20

And for some reason, the current program only takes the text class 102 ones.

2:22:26

That makes no sense.

2:22:27

Let's get rid of that.

2:22:29

We also wanna make sure that unoccupied buildings, particularly ones with vacate orders, where there hasn't been any step there haven't been any steps towards resolution.

2:22:38

Get the same treatment.

2:22:39

Let's get those out of the hands of folks who are warehousing those properties and into the hands of responsible developers as quickly as possible because neighborhoods are suffering.

2:22:52

That was number 1.

2:22:52

Number I'm gonna go a little faster.

2:22:54

Number 2, we heard the administration called this a companion program to the lien sale.

2:22:59

We absolutely agree with thinking of it that way.

2:23:02

And in that light, we wanna make sure.

2:23:05

And this is Council member Brewer.

2:23:07

I'm really glad you're here for this.

2:23:08

I think this will help.

2:23:10

I wanna make sure that as the criteria for the new city foreclosure program, is revamped, the agency is required to take a look back at all the liens that have been sold and are currently being held by the 2 remaining tax lien trusts.

2:23:27

There's a trust that's called 19982, There's a trust called that's called 2021a.

2:23:33

2021a is gonna close soon, maybe by the time this is done, we're just gonna be talking about 1998 too.

2:23:40

But either way, once we have these new criteria and this new program, the agency should be required to look back, and any liens that were sold on buildings that would otherwise qualify for the program in 2025 should be defected and the process that we're designing today should start for those buildings.

2:24:03

And hopefully, that'll capture the brownstones you've been really flagging for us, council member Brewer.

2:24:09

If that doesn't help, I'm happy to Look at look at the specifics, but that should.

2:24:16

It also seems like based on the discussion today that such a review should happen, not just once, but maybe at every round of city foreclosure, because I'm worried about that gap, and it does seem like maybe we're gonna keep selling liens on properties that should be going into city foreclosures.

2:24:33

So maybe we just check every year, and then we'll all be a little bit less anxious.

2:24:40

We wanna see switching gears a little bit to HDFC cooperatives.

2:24:44

We wanna see some more robust supportive services and at minimum, a majority that that HPD meet with a majority of shareholders or the duly elected Board of Directors to discuss the possibility of renewed regulatory agreements and retroactive exemptions before any payment plan or foreclosure process.

2:25:07

Says pursued.

2:25:08

Right now, it's it is I think the legislation says it has to provide notice, and that's not enough.

2:25:15

And that's and there has to be either a majority of show shareholders or a duly elected board.

2:25:21

That is speaking for those shareholders and some verification that, you know, if you're meeting with 3 people out of a 100 unit coop, the rest of the people in that building know what's going on.

2:25:35

This is where it gets a little sticky.

2:25:38

We are a little worried that there could still be buildings going into the program where what the owner owes to the city is actually less than what the property is worth.

2:25:48

And we wanna make sure that there's some clarity about how that works, how that accounting is gonna happen.

2:25:55

Based on our observations and our research, we actually think that usually it's gonna zero out or what it costs to fix the building.

2:26:02

Which is a cost the city is gonna take on with its partners is gonna cost more than what the building is worth.

2:26:07

But in the few cases where the owners owed something, we wanna make sure that that is handled both ethically and legally.

2:26:18

And finally, we wanna see see language adjusted to harness the preservation powers of communal interests and other community development corporations.

2:26:28

The village drafted requires HPD to consider whether A third party applying for property disposition is a responsible legal tenant, not for profit organization, neighborhood based for profit individual organization or community land trust.

2:26:44

We think this language is not strong enough.

2:26:47

We think the agency should be prohibited from awarding property to a for profit unless no legal tenant, not for profit organization.

2:26:57

Our community land trust has expressed a willingness And a further improvement would be to to require priority to be given to legal tenants, not for profit organizations, and neighborhood based for profit organizations or individuals that are partnering with community land trusts.

2:27:16

So priority for anybody that's partnering with a CLT for permanent preservation.

2:27:22

Thank you so much for the indulgence.

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Testimony by Will Depoo, Senior Campaign Organizer at Association for Neighborhood & Housing Development (ANHD) on the Housing Recovery and Resident Protection Act

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Testimony by Will Spisak, Senior Program Associate at New Economy Project, on Third Party Transfer Program Reform