(The Center Square) — New York City Mayor Zohran Mamdani is freezing tax lien sales as the city conducts a review of claims that the process exposes homeowners to “predatory” debt collectors.
Mamdani’s preliminary $127 billion budget plan calls for suspending the city’s annual sale of unpaid tax liens and water debt to a private investor-backed trust this year will conduct a six-month review looking into the system, which has been criticized for disproportion and harm to low-income and minority neighborhoods.
“Our current property tax lien sale process to collect overdue taxes and fees is broken — allowing predatory debt collectors to profit off the backs of working and middle-class homeowners, driving New Yorkers out of their homes,” a City Hall spokesperson said in a statement.
The mayor’s budget projects that halting sales will cut near-term revenue by about $80 million, according to the Mamdani administration. The six-month review will focus, in part, on finding ways to offset the loss to the city’s tax coffers from eliminating the program. Mamdani also wants to hire more auditors for the city’s Finance Department as part of his initial spending plan.
Housing advocates have argued for years that the process is predatory because it converts public debt into private debt collectors that often use aggressive tactics to collect unpaid bills.
Under the tax lien sales, New York City bundles unpaid property taxes, water and sewer charges, and other municipal debts into a trust that is then sold to a private buyer to collect. In 2025, the city sold tax lien debts totaling about $220 million, according to a report by the city comptroller’s office.
City officials halted tax sales during the COVID-19 pandemic and again in 2022, and the City Council recently approved reforms to protect homeowners from predatory debt collectors.
But Mamdani campaigned on a pledge to eliminate the tax sales, pointing out that New York City is an outlier among major U.S. cities in privatizing the collection of municipal tax debt, which is generally a core government function.
“They get rich on the backs of small homeowners behind on their bills,” Mamdani said in a campaign statement outlining his housing priorities. “Too often, after they’ve extracted as much as possible, they’ll move to foreclose, pushing families out of their homes.”
Mamdani’s plans to pause the tax lien sales also come as he has threatened to raise property taxes to close a budget gap if state lawmakers fail to raise rates on the wealthiest New Yorkers.
He has also backed a controversial proposal to seize large apartment complexes from owners who rack up debt and code violations and transfer ownership of the properties.
