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PUBLIC TESTIMONY
Testimony by Ann Korchak, Board President of Small Property Owners of New York, on the Impact of Tax Lien Sales on Small Property Owners
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3 min
Ann Korchak, representing Small Property Owners of New York (SPANY), testifies about the negative impacts of the city's tax lien sale program on small rental property owners. She argues that the program is inequitable and counterproductive, particularly in light of pandemic-related challenges and housing court backlogs.
- Korchak emphasizes that the lien sale disproportionately harms small property owners of color who provide naturally occurring affordable housing.
- She highlights the financial distress caused by inability to collect rent, unpaid water and sewer bills, and property taxes, leading to crushing interest rates and debt levels.
- Korchak urges for reforms, including creating a municipal debt resolution program, tax abatements for uncollected rent, and reinvestment in solutions to keep both tenants and owners in their homes.
Ann Korchak
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Hi.
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Good morning.
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My name is Anne Korchak.
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I believe so.
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So good morning, council member nurse and the members of the task force.
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My name is Anne Korchak, and I'm serving as the board president of SPANY, the small property owners of New York.
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We have hundreds of members throughout the city who own and operate nearly 6,000 units of housing.
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I'm here to speak about the deeply inequitable and counterproductive nature of the city's tax lien sale program, particularly its impact on small rental property owners.
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City and state policies fall out from the pandemic and a dysfunctional housing court system have plunged our properties into economic distress, hurling us into a lien sale tantamount to a predatory loan shark type program, Disproportionately harms small property owners of color who are among the largest providers of naturally occurring affordable housing that we see in the four family homes and the small rent stabilized walk up buildings that we see in every multicultural immigrant communities throughout the boroughs.
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What other industry is expected to provide services indefinitely with no guarantee of payment and no relief in sight?
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Without the ability to collect rent and in many cases never receiving ERAP funds or waiting years for housing court cases to be resolved, many owners have fallen into deep financial distress.
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Mounting unpaid rents means we cannot pay water and sewer bills and property taxes.
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The result, we're hit with the crushing interest rates and debt levels that are impossible to recover from.
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The lien sale will push small property owners into deeper economic distress and risk further tenant displacement and loss of affordable units.
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Buildings become unmanageable under the weight of the city imposed lien and the sale to private collectors at an interest rate that can be as high as 18%.
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This will inevitably result in foreclosure, neglect, and ultimately abandonment, undermining stability and safety in black, brown, and immigrant neighborhoods, and further shrinking already fragile affordable housing stock.
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While large corporations can absorb the financial shocks and navigate the bureaucratic process with ease.
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Small owners often face steep challenges due to temporary hardships, illness, gaps in communication with city agencies.
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The consequences are devastating.
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Loss of generational wealth for families that have owned and operated buildings for decades, increased risk of tenant displacement as properties fall into the hands of speculative actors, erosion of community stability, especially in black, brown, and immigrant neighborhoods, and no pathway for redemption that's accessible or humane to the small property owners.
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I urge the council to support meaningful reform and land lean sales to private investors, create a municipal debt resolution program with reasonable payment plans and legal support for small rental property owners who are impacted by the rental arrears that tenants were unable to pay, tax abatements or credits for uncollected rent, and reinvest in solutions that keep people in their homes, both tenants and owners, such as targeted emergency rental assistance programs that can provide immediate relief to tenants.
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This will help the tenants get back on their feet while ensuring that landlords receive the necessary support to keep their properties viable.
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Small rental owners can't loot can't house people for years without collecting rent, and currently, that's our reality given the understaffed and slow moving housing courts.
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It isn't just about fairness.
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It's about preserving the diverse working class communities that make New York City strong.
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Thank you so much for testifying today.
Rachel Geballe
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Is the
Sandy Nurse
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is the red light on?
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Okay.
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It is.
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Yes.