The Big Apple has agreed to pay $60 million to property owners whose buildings were seized under a controversial city program that Mayor Zohran Mamdani has vowed to revive.
Under the settlement agreement filed in Manhattan federal court Friday, owners of 64 properties seized by the city over unpaid tax debts will receive the payouts, nearly a decade after the class-action lawsuit was filed.
“We’re grateful to be able to finally give some relief to some of these families,” said Sara Kane, one of the attorneys representing the homeowners.
The plaintiffs argued that the properties were seized without “just compensation,” in violation of their constitutional rights — and alleged the city never notified them that their homes were being seized, according to the suit filed in 2019.
Under the “Third Party Transfer program,” ownership of buildings that have racked up housing code violations and owe significant property taxes can be transferred to a nonprofit organization, which then finds an affordable housing developer to take them over.
But court documents claim that often, the seized real estate was worth well over what the homeowner owed in taxes.
The settlement — one of the largest in the last decade by the city — comes as the Mamdani administration looks to revive the program as part of the mayor’s “Fix the City” housing plan.
“The City maintains that the transfer of properties did not violate the former property owners’ rights, but the City is settling to resolve this longstanding litigation,” said Andrew Stern, spokesman for the city’s Department of Housing Preservation and Development.
The settlement would cover the most recent group of properties seized in 2019. But more than 500 other properties remain as part of the class-action suit, according to attorneys for the plaintiffs.
“We hope that the court system allows for the rest of the rounds to have a similar result,” Kane said.
