Council Speaker Adrienne Adams in her State of the City speech on Wednesday will announce efforts to protect homeowners from predatory real estate speculation, according to her office.

Forthcoming proposed legislation will seek to inform homeowners and those who inherit property of the fair market value of their homes and help them protect their assets through a new assistance program. Details of the efforts have yet to be hammered out.

The planned measures come in response to an investigative series from THE CITY detailing how real estate speculators target properties in New York’s gentrifying, historically Black and Latino neighborhoods, typically owned by homeowners who died without wills. The speculators find property that legally belongs to a patchwork of far-flung heirs who may have no idea of the worth of their fractional shares of the property they inherited.

Speculators may low-ball heirs for their shares and then, under state law, can go to court to demand a forced sale of the house, which in turn may push out family members who still live there. Or, speculators can attempt to acquire the full property through multiple fractional shares — allowing them to evict longtime tenants and flip the property for many times what they paid.

Such practices can siphon off considerable generational wealth from Black and Latino families and have contributed to New Yorkers of color leaving the city.

Protecting Assets

One piece of legislation Speaker Adams envisions would require housing speculators to disclose the fair market value of properties to owners, in an effort to prevent unsuspecting heirs from accepting low-balled offers.

THE CITY’s reporting showed that real estate investors often approach distant heirs with offers to buy the heirs’ shares of property, but heirs don’t always know that those offers could be for far less than their market value. Some of the heirs who agreed to sell their holdings told THE CITY they had no idea they were getting a raw deal, and said they felt cheated to learn the speculators flipped properties for several times what they had paid.

The Council has yet to detail how this disclosure would work, including when in the process the fair market value would be determined and by what method. 

Property owners already receive some disclosures, but these can be misleading. The “total assessed value,” which is used to calculate property taxes, appears on a state form included in deed transfer paperwork. But that figure is typically much lower than what the property would sell for.

Another bill would require the city Department of Consumer and Worker Protection to develop a program to help New Yorkers manage an inherited property and protect their assets. This program would assist people who inherit property in making the decision about whether or not to sell and offer guidance in navigating tenant agreements, property taxes and other processes.

In addition to the legislation, the Council plans to host district-based events offering free legal services to older homeowners to help them prepare wills and work on other aspects of real estate planning. These events will be held in partnership with community organizations and local law schools, specifically focusing on neighborhoods speculators target — typically gentrifying areas with historically Black and Latino populations.

“We want to plan for the successful wealth of our lineage,” said Tuulikki Robertson, director of operations for The Black Institute, which has been engaged with the Council in planning these forthcoming events. “There are predators out there and it’s important to get your will done.”