The City Council held a hearing on Monday on legislation that would allow the city’s Department of Housing Preservation and Development to seize buildings from landlords who have racked up housing code violations and debt from unpaid taxes and fines and turn them over to owners they deem more responsible, according to Gothamist.
Lawmakers killed a previous iteration of the program, known as “third-party transfer,”or TPT, in 2019 after finding that it disproportionately stripped homes from smaller, low-income owners of color without compensation.
Council Member Pierina Sanchez, a Bronx Democrat who chairs the housing committee, said failure to replace the program has allowed problems to fester for tenants, with no accountability in sight. She sponsored legislation to bring back a version of the program that she said will be “hyperfocused on the worst of the worst” landlords, without hurting smaller owners with little debt, the news site reported.
Her legislation would specifically apply to buildings with unpaid taxes equal to a quarter of the property’s value, or 15% if the property also has an average of five or more housing code violations per unit or at least $1,000 in emergency repairs paid by the city.
The city's housing agency would then create a ranking of the most distressed properties, Gothamist reported.
During the hearing, HPD officials said they were in favor of modernizing the TPT program, and said there were about 3,000 apartment buildings that could be eligible for foreclosure and transfer under the new legislation due to housing code violations and unpaid taxes and fines.
There is a subset of 200 buildings that have amassed more than $250 million in cumulatively unpaid debts and around 14,000 severe housing code violations, Gothamist reported.
The City Council suspended the program in 2019 and specifically condemned a provision called “block pick-up” that exposed homeowners with tax or water liens to municipal foreclosure simply because they were located near another home already designated for foreclosure. Properties caught up in the sweep could be worth orders of magnitude more than their municipal debt, as home values have soared citywide in contrast to decades earlier.
The city used the program just once in the last eight years on a building that qualified prior to the Council’s suspension. The owner of the building owed the city nearly $28 million in taxes and penalties, Gothamist said.
