🏚️ What's Broken in How the City Enforces Property Violations

🌟 Author’s Note

Hello to the 125 members of the Better Block Project. Here is the TLDR (Too Long Don’t Read) for this week’s update:

• This week, we met with an official from the Department of Finance who educated us on how collection of ECB/OATH violations works

• Department of Finance doesn’t exercise any subjectivity on which fines they choose to collect. They have to follow the city law strictly to determine how and what they collect

• Department of Finance only collects docketed violations, which don’t get forwarded to them from OATH for at least 6 months. Shortening this time frame to 3 months could lead to faster collections

• Local Law 153, which governs what violations can become tax liens, favors large property owners today. You could imagine amending that law to focus less on unit size, and more on repeat violations, to improve the enforcement mechanism

For the full update, read below!

🏚️ What’s Broken in How the City Enforces Property Violations

This week, we had the opportunity to meet with an official at the NYC Department of Finance to learn more about how the city collects property violations. The Department of Finance is in charge of administering the city’s tax and revenue laws. When you are paying your property tax bill, you pay it to them. If you are paying a parking ticket, you pay it them.

When it comes to the Department of Finance, if a property is not paying their violation, they are the city agency that is in charge of collecting it. As we have written about in prior updates, NYC is owed $573M dollars in outstanding ECB violations. Our goal with the call was to understand more clearly why so many of these violations went unpaid. We had a few hypotheses going in on what was happening, some which turned out to be true, others were not.

Hypotheses #1: Department of Finance only collects a portion of outstanding ECB violations, not all, resulting in less enforcement

Outcome: True

Our first hypotheses was that ECB/OATH, the city’s administrator of violations, didn’t pass all of their violations on to the DOF to be collected. It turns out, this is true. The Department of Finance only collects on violations that are docketed or in judgement. If a violation is simply defaulted, the DOF is not actively collecting on it. From analyzing violations in the 11238 zip code (this is where 1105 Fulton and 26 Jefferson are), it looks like it takes ~6 months for a defaulted debt to become docketed. Over the past year, there have been 111 docketed or defaulted judgements for the Department of Buildings in that zip code. All of the 49 judgements before July 1, 2025 are now in the docketed status.

You could imagine adjusting the law so instead of waiting 6 months for a default judgment to become docketed, that is reduced to 3 months. In this world, all of these debts would be forwarded to the Department of Finance sooner, and as a result be put in their collection funnel faster and we would likely see faster remedies. For residents who have to navigate pass these property violations every day, 3 months matters a lot.

Hypotheses #2: The Department of Finance exercises judgment on which properties to collect debt on

Outcome: False

In our research, it wasn’t clear exactly how a violation would make it on to the property tax bill, increasing the enforcement power from the city. One hypothesis was the DOF was using judgment and essentially picking which properties to go after, based on their own decision making process. This turned out to be false. The Department of Finance is strictly governed by city law on exactly what they can do, and they follow that law when it comes to determining which violations become liens on property, and which do not. This is a thread I have learned to appreciate as I have interacted with other city agencies, like NYPD, and I think a genuine bright spot in how our city enforcement works.

Despite this conclusion, it is still opaque on exactly what criteria goes into determining if a violation that is unpaid can become a lien on a property. In our call, we discussed the city law (discussed more below), exemptions (e.g., non-profits) and timing all have a role to play. The official we spoke with couldn’t articulate the clear flow chart of what happens when, but it is something Better Block hopes to put together to get a clearer picture of exactly why some properties have violations with liens, while others do not.

Hypotheses #3: Local Law 153, which governs which ECB violations can become tax liens, is a clear opportunity to improve the status quo

Outcome: True

In our discussion with DOF, we discussed how amending Local Law 153 is a clear opportunity to better target which properties have violations that become tax liens, and which do not. The full text of the law can be found here, but the basic details are:

• An ECB judgment can become a property tax lien

• For private dwellings with 3 or less units, any qualifying judgment can become a tax lien

• For dwellings with 6 to 19 units, total judgments need to reach at least $30,000 before they can become a lien

• For dwellings with more than 20 units, total judgments need to reach at least $60,000 before they can become a lien

The interesting thing we discussed about this law is it explicitly favors larger property managers. Owners of smaller properties have no thresholds for what can become a tax lien, while larger property managers are given a “budget” of violations they can have on their properties before any one of those violations can become a tax lien.

Reflecting on this, the way this law is written also doesn’t seem to reflect how property violations actually manifest on our blocks. In the properties we’ve observed, violations tend to cluster with properties, and while unit count matters, it’s not the only factor. The blighted properties we have observed have an average of 10.3 violations in the last year, compared to 0.5 for neighboring properties on the same block. As an example, 525 St. Marks, a 20 unit property has 8 violations in the past year and $25,000+ in docketed fines. According to neighbors, it is an objectively problematic building, but according to this law they have not reached the threshold for the violations to become tax liens. On the contrary, 26 Jefferson has $113K in violations and only 2 units, so they would be eligible.

You could imagine an amendment to this law where we lowered the threshold for larger properties to have violations as tax liens and raised the threshold for smaller property violations to have tax liens. In this world, both 26 Jefferson and 525 St. Marks could face tax liens, and more smaller property owners could be more protected than they are today by this current law.

🏃 Our next steps

With our new insights from the Department of Finance, we plan to take another look at NYC Open Data to get a clearer picture of what is broken with fines today, along with applying these challenges to our existing properties to ensure whatever policy solution we come up with drives the outcome we are looking for. We’re also going to work on a detailed flow chart of how it works and aim to speak to OATH as well to continue to get smarter on the problem.

As we have shared in other updates, we hope to come up with a final policy solution in the next month or so to start pitching to partner organizations and elected officials, so we can ultimately pass policy that improves the status quo.

That’s all for this week’s update. Next week, we’re going to cover our progress with the MTA on the lighting situation at the bus stop. As usual, if you like what we’re doing at the Better Block Project, forward this to someone you know that is looking to get more engaged in the neighborhood. The larger our community, the bigger our impact can be.

See you next week,

David