As Million$ In Unpaid Real Estate Taxes Pile Up, City Reluctant To Foreclose, Seize Deteriorating Multi-Unit Residential Buildings

In New York City, The New York Times reports:

• Hundreds of buildings, from the South Bronx to central Brooklyn, whose renovation and rescue from ruinous debt were critical to the rebirth of blighted neighborhoods, are again in severe financial trouble. That poses a dilemma for the city, which began unloading the properties in the mid-1990s as part of an arduous effort to divest itself of thousands of decrepit buildings seized because of tax delinquencies.

• Filled with unemployed tenants unable to make rent or mortgage payments and squeezed by soaring city fees, about 442 buildings are in serious default on property taxes and far behind on municipal bills. As the number of imperiled buildings grows, the city, struggling with its own cash shortage, faces unappealing choices. Seizing the buildings is not an option. The city’s previous role as a master landlord was widely deemed a disaster, with many buildings locked in chronic states of disrepair.

• Instead, housing officials must either force deadbeat owners to pay their debts, or else foreclose on the buildings and find new owners in a harsh real estate climate. A total of $140 million is owed on the buildings, and nearly half of them have arrears of at least $3,000 of debt per unit, according to the city’s housing department. Many of the buildings are now slipping into the kind of shoddy conditions from which they had been saved.

For more, see Rescued From Blight, Falling Back Into Decay.