Several members of the city council’s Black Caucus are pushing for the state to pass theEnd Toxic Home Flipping Act — a tax on corporations and wealthy investors who quickly buy and resell homes in Black and Brown communities.
Essentially, home flipping is when small family homes are purchased by professional investors with big real estate backers. They buy a property cheaply, remodel it, and then sell it for quick profit at a high price point. According to a 2024 report from the Pratt Center for Community Development, this industry is largely concentrated in the city’s communities of color and neighborhoods with low- and moderate-income residents, eventually driving up housing prices and contributing to racial displacement in those vulnerable areas.
“Wealthy and corporate investors are buying up homes, usually in historically marginalized neighborhoods, and flipping them for quick, huge profits. It’s a toxic practice that is driving up the cost of homes and rent, pricing out long-term residents, and harming too many Black homeowning communities,” said State Senator Julia Salazar, who sponsored the bill, in a statement. “Families and homeowners deserve to live in their communities without the fear of being displaced — they deserve the End Toxic Home Flipping Act.”
Salazar’s bill would impose a tax on companies buying residential properties that are sold within two years and on the transfer of certain properties sold for $1 million or more. Some exemptions to the tax, like property owners selling to another family member or homeowners who can demonstrate a financial hardship in the face of a foreclosure sale, are included in the bill.
From 2019 to 2023, a total of 11,688 homes were flipped across Brooklyn, Queens, and the Bronx. The community districts with the top ten rates of home flipping citywide were more than 90% people of color, and more than half were majority-Black, said the Pratt Center report. Communities like Harlem, East New York, and Bed-Stuy were hit the hardest.
Rev. Christine Valentine, 62, runs the Tabernacle Baptist Church and heads the New Lots Nehemiah Homeowners Association in Brooklyn. She has been a homeowner in East New York for 21 years. Valentine used to work as a paralegal before the COVID pandemic, making a much higher salary, she said. But she lost that job, and now works as staff for the Department of Education (DOE), supporting her household solely with her income.
“There is a rise in property values in the neighborhood, and we’d say that is a positive in equity and wealth, but that means higher property taxes. That makes it harder for long-time residents to pay bills,” said Valentine.
Generally speaking, her monthly mortgage payment is about $2,500, and her annual property taxes are about $5,800. She said that doesn’t include her utilities, water bill, heat/gas, or electric bill payments.
Valentine said she is disheartened by the change in the neighborhood as outside investors accelerate the effects of gentrification. “The cultural impact of homeownership from generation to generation should be protected. My nephew is 38 years old, and he can’t afford to buy a home here. So loss of generational wealth is a problem,” said Valentine.
“We cannot stand by while harmful, speculative home flipping accelerates the disappearance of our Black communities. As a city, we have a responsibility to protect Black families, especially senior homeowners facing relentless pressure and first-time buyers locked out of an increasingly all-cash market,” said Black Caucus Co-Chair and Councilmember Sandy Nurse, who reintroduced Resolution 326 to call on the state legislature and the Governor to sign the bill.
In a letter sent last week, Black Caucus councilmembers railed against the inflated costs that longtime Black homeowners have to contend with, pointing out that over 200,000 Black New Yorkers have already fled the city in search of affordable housing and job opportunities between 2010 and 2022.
“Our neighborhoods should not be commodities for quick profit. I was proud to stand with members of the New York City Black Caucus in urging Governor Hochul to support and ultimately sign the legislation this session, for the protection of our generational wealth and long-term prosperity of the Black community in NYC,” said Nurse.
[updated Fri, March 13]