Getting Water Boarded

Last week, the NYC Water Board approved a modest 3.35% increase in the city's water rate, extended the deadline for appeals and suspended lien sales during the appeals process. But it may be a drop in the bucket compared to the dramatic rise in unpaid water liens.

Under the new rate, which takes effect on July 1, the average single-family homeowner in New York City will see an increase from $992 to $1,025 a year. Only the 25% or so of single-family homeowners in New York City who use less than 100 gallons a day will be spared a rate increase.

The city collected a record $34 billion in water bills in 2013, as the total amount of unpaid bills rose to $644 million.

When the unpaid bills are a year old, the city sells them as liens to private companies with the power to recoup their investment by foreclosing on the properties. Last year, the city made $20 million selling water liens on two-and-three family dwellings and mixed-use properties to water bill collectors.

Over the past five years, the number of unpaid water bill liens the city has sold to outside collectors has jumped by 41%, from under 1,000 in 2008 to over 1,300 in 2013, which could result in a wave of foreclosures. The city says the spike in lien sales is partly due to owners failing to honor negotiated extended payment plans going back as far as 2008.

After a respite in 2009, the total number of city properties under lien shot back up in 2013 to nearly 2,000. The number of liens sold on two-and-three family homes doubled in 2013, despite the city giving homeowners with $1,000 or more in unpaid water bills a 1-year extension in 2012.

Homeowners contend that their water bills mysteriously soared after the city shifted to an electronic meter-reading system in 2009, and that the city provides no due process to homeowners who challenge what they believe are erroneous readings. One Queens owner discovered that his boarded-up property had somehow managed to rack up $36,000 in unpaid water bills -- of which he had no notice.

Housing advocates say the city's middle class homeowners are struggling to pay water bills that have shot up by almost 80% since 2005, calling the system unfair to those who lack the sophistication to fight the "lien machine."

The Daily News article.

It's not just homeowners who are underwater:  three Brooklyn Hospitals owe a combined $7.8 million in delinquent water bills [Daily News.]

Back in 2012 when he was Public Advocate, Mayor Bill deBlasio also saw a problem with the city's new electronic metering system.

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