Good afternoon. .

My name is Ann Korchak and I’m a member of SPONY – Small Property Owners of NY. My family has been operating two small buildings on the UWS since the 1940's I’m speaking today in opposition to the resumption of the lien sale.

Last year at this time the lien sale was being discussed and I penned an oped in the Daily News with two fellow SPONY Members Jane Lee and Aaron Weber. At that time we wrote

“It is a draconian process that allows the city to sell off property tax and water/sewer debt to a nonprofit trust – which is really a predatory debt collector that charges usury interest rates of 18 percent and tacks on thousands of dollars in legal fees.

The majority of its victims are generational small building owners – like us – and most of them are immigrants and people of vast ethnic diversity.”

Fast forward 12 months and we are again discussing the lien sale. I think it is grossly unfair for the city to do this to property owners while the pandemic is still ongoing. Small landlords have been particularly hard hit by the pandemic and every level of government has failed us. We were not eligible for PPP loans and the delayed and flawed rollout of the ERAP program means that rental relief has not yet reached many building owners. How can the city consider holding a lien sale when the promised relief is still not flowing as originally planned?

We’ve continued to operate our buildings under very stressful conditions during the pandemic. We are essential workers but have been vilified and abused by advocates, the media and some in government. Until our sector of the economy has recovered I beg you to have some MERCY and permanently end the tax lien sales.

It’s Time to Permanently End Tax Lien Sales

by Jan Lee, Ann Korchak, and Aaron (insert last name)

(The authors are the owners of small family-owned buildings in Chinatown, the Upper Westside and Harlem, respectively.)

The approaching expiration of the city’s tax lien sale moratorium is an ideal opportunity for lawmakers to consider a proposal that New York State Attorney General Letitia James floated at a recent City Council Finance Committee hearing: End the lien sale altogether.

It is a draconian process that allows the city to sell off property tax and water/sewer debt to a nonprofit trust – which is really a predatory debt collector that charges usury interest rates of 18 percent and tacks on thousands of dollars in legal fees.

The majority of its victims are generational small building owners – like us – and most of them are immigrants and people of vast ethnic diversity. Yet, our purportedly progressive Mayor, Bill de Blasio, has done nothing to address this systemic racism.

To no one’s surprise, the Mayor didn’t testify at the City Council hearing. On the Friday before Labor Day, Mr. de Blasio warned property owners that it was deadline day to work out a payment plan with the city to avoid the lien sale list.

This shouldn’t be an exercise in survival of the fittest – not when it comes to those providing affordable housing, and certainly not during a pandemic. Thankfully, Gov. Andrew Cuomo recognized this and extended the moratorium, which expires Nov. 3.

A tsunami of lien sales is coming. A handful of small building owners will stay the course even if it means being debt-ridden for the rest of their lives. But thousands will be pushed off the cliff, these authors potentially among them, when the next property tax bill comes due in January.

The city argues that lien sales create budget stability. But that thinking may have worked in good times under normal circumstances – when the city’s Department of Finance would provide several notices to struggling building owners before the lien sale, giving them a chance to keep their buildings and holding the number of lien sale properties to a minimum.

In the midst of this global health and financial crisis, DOF will undoubtedly be overwhelmed with unprecedented numbers of distressed properties. The results are bad enough when spread over time, but happening all at once will bring unfathomable calamity to tenants, affordable housing, and neighborhoods – not to mention that it will snuff out thousands of generational owners, replaced by faceless corporate landlords that would be hard-pressed to know any of them by name.

Our visibility, keeping our buildings safe and sanitized, and helping families work through rent issues, has to count for something. The personal struggles of our parents, and the blood, sweat and tears that we pour into our buildings every day, makes us committed stakeholders in our neighborhoods of Chinatown, the Upper Westside and Harlem.

It’s the homes where we grew up, and it has been home for decades for many tenants who have become part of our families. We take pride in helping them achieve a standard of living that they deserve.

Due to the high vacancy rate, as well as the rent concessions that we have provided to existing residential and commercial tenants to keep them in their homes and businesses during the pandemic, we now need nearly 50 percent of our buildings’ rent revenue to cover our property tax bills – that’s 50 percent of the rent going straight to the city. Crazy, right?

The inability of restaurants, bars and other retail to pay rent has been catastrophic because these commercial tenants anchor mixed-use buildings to help owners make ends meet. No matter what the fall-off in rent revenue, the city still expects us to pay 100 percent of our property taxes and meet our full obligation of maintaining and repairing our buildings. Our minimal emergency reserves are long gone, and we have seen a 20 percent surge in operating expenses due to increased cleaning services, water usage, and refuse collection since tenants are working from home.

How do we keep thousands of small building owners off the lien sale list? Rather than saddling them with debt or selling the debt at a discount to third parties, it would make more sense for the city to work with these distressed owners on payment schedules with manageable interest rates. Lawmakers need to get past the politics and view us as part of the solution and include us in the decision-making process.

But if ending the tax lien sale is too progressive a policy, then lawmakers, at the very least, should support legislation proposed by State Senator Leroy Comrie and Assemblyman David Weprin that would delay lien sales for up to 12 months.

Hopefully, the City Council will use its power to permanently end the lien sale when this ill-fated policy comes up for renewal at the end of the year – because it’s clear that we can’t count on City Hall. #