The New York City Council is slated to introduce a new way to collect unpaid property and water bills totaling more than $1.8B, replacing a system that relied on tax liens.

The city council and Mayor Eric Adams have spent months negotiating the replacement for the tax lien sales program introduced under former Mayor Rudy Guiliani. New legislation known as the Home Preservation and Debt Resolution Reform Act went before the city council’s finance committee Tuesday, The City reported.

The new legislation will distinguish between owners with the ability to pay and those who would but can't, New York City Finance Commissioner Preston Niblack said at the hearing.

“Our goal is to help taxpayers resolve their debt and to dramatically reduce the number of owners that face enforcement actions,” he said during testimony, according to The City.

Property owners owe roughly $1B in unpaid water bills and $839M in unpaid property tax bills, according to data from the Department of Finance.

The new bill would create exemptions for homeowners in certain circumstances, offer new routes to debt resolution and allow homeowners staring down debts to transfer titles to a third party as a way to stay in their homes.

The legislation would also require the DOF to conduct more outreach to owners to ensure they are aware of those options.

In the case of multifamily properties, the city’s Department of Housing Preservation and Development would be required to inspect the properties and do outreach to renters about their rights.

Under the previous program, which expired in February 2022, the DOF issued liens on properties with unpaid property tax or water bills and sold those liens to private investors.

Those investors could then collect the debt, which added interest and payment fees to the sums already owed, potentially pushing owners even closer to foreclosure.

While the program generated revenue for the city, it had long been unpopular with community advocates, who argued that homeowners and renters of color were disproportionately impacted.

Local legislators believe the new bill is better than its predecessor, as it takes underlying circumstances into account, Council Member Justin Brannan said.

“It’s part one of an ongoing process to rethink and reimagine and continually improve how we approach the resolution of property taxes and other city charges,” he said, according to The City.

However, tenant advocates said the new legislation contains some of the same problems as the old program, such as including homes with four or fewer units.

“The same families and communities that have struggled to recover from the pandemic — who lost their jobs, whose small businesses and family finances suffered — are the same communities most likely to be targeted by the tax lien sale,” Center for NYC Neighborhoods Deputy Director of Advocacy and Public Affairs Kevin Wolfe said in a statement provided to Bisnow. “Mayor Adams and the Council must prioritize committing and effectively deploying the necessary resources for outreach to homeowners to do right by them.”