Mayor Zohran Mamdani has vowed to wrest control of apartment buildings from the city’s worst landlords in order to improve life for tenants. Now the City Council may give him a legal pathway to do it — though its future is far from certain.
While a new measure has the support of some in the real estate industry, it has yet to earn backing from the Council speaker, who will decide whether it is brought forward for a vote.
The Council held a hearing on Monday on legislation that would allow the city’s Department of Housing Preservation and Development to seize buildings from landlords who have racked up housing code violations and debt from unpaid taxes and fines and turn them over to owners they deem more responsible.
Lawmakers killed a previous iteration of the program, known as “third-party transfer,” in 2019 after finding that it disproportionately stripped homes from smaller, low-income owners of color without compensation.
Councilmember Pierina Sanchez, a Bronx Democrat who chairs the housing committee, said failure to replace the program has allowed problems to fester for tenants, with no accountability in sight.
She sponsored legislation to bring back a version of the program that she said will be “hyperfocused on the worst of the worst” landlords, without hurting smaller owners with little debt.
“If you are a chronically negligent actor who has your tenants living in dangerous conditions, you do not deserve to be in ownership and you, after a fair process, will have your property taken from you,” Sanchez told Gothamist ahead of a Council hearing Monday.
Her legislation would specifically apply to buildings with unpaid taxes equal to a quarter of the property’s value, or 15% if the property also has an average of five or more housing code violations per unit or at least $1,000 in emergency repairs paid by the city.
The city's housing agency would then create a ranking of the most distressed properties.
City Council Housing Chair Pierina Sanchez speaks in support of legislation to revive the "Third-Party Transfer" program, which allows the city to seize distressed properties and turn them over to new owners.
Sanchez cited the owner of two decrepit Washington Heights apartment buildings, who was arrested twice in 2024 for failing to complete court-ordered repairs.
The owner, Daniel Ohebshalom, faces criminal charges for harassing tenants and endangering the welfare of a child after Manhattan prosecutors say a ceiling collapsed on a young child. Ohebshalom has pleaded not guilty and maintains ownership of the buildings.
If passed, the Safer Homes Act could allow Mamdani to fulfill his campaign pledge to take buildings from landlords that expose tenants to dangerous living conditions.
Mamdani described that strategy at length last year as he was running for mayor, but the city currently lacks a clear legal pathway for accomplishing it.
Mamdani’s spokesperson Matt Rauschenbach declined to comment on the measure and instead referred to testimony from top officials at the Department of Housing Preservation and Development who praised the bill at the hearing.
“ HPD views the program as a key part of our broader enforcement and preservation toolkit to ensure that housing remains safe and livable for New Yorkers,” said Rosa Kelly, chief of staff to the housing commissioner. “We’re very pleased that the council has reintroduced legislation to modernize [the third-party transfer program].”
During the hearing, Kelly narrated a slideshow presentation showing that about 3,000 apartment buildings could be eligible for foreclosure and transfer under the new legislation due to housing code violations and unpaid taxes and fines.
She specifically focused on a subset of 200 buildings that have amassed more than $250 million in cumulatively unpaid debts and around 14,000 severe housing code violations.
Supporters of the new bill say it will eliminate problems that plagued the third-party transfer program since it was first created in 1996 under then-Mayor Rudolph Giuliani.
The city enacted the program to pass distressed buildings on to new owners after foreclosing on them, rather than keeping the city in control. The city had long struggled to maintain thousands of properties abandoned by their owners and acquired through foreclosure starting in the 1960s.
The City Council suspended the program in 2019 and specifically condemned a provision called “block pick-up” that exposed homeowners with tax or water liens to municipal foreclosure simply because they were located near another home already designated for foreclosure. Properties caught up in the sweep could be worth orders of magnitude more than their municipal debt, as home values have soared citywide in contrast to decades earlier.
The city used the program just once in the last eight years on a building that qualified prior to the Council’s suspension. The owner of the building owed the city nearly $28 million in taxes and penalties.
The new measure already counts 34 sponsors, a clear majority of the 51-member Council. But it lacks one key backer: Speaker Julie Menin.
Council speakers rarely cosponsor legislation and Menin’s spokesperson, Rendy Desamours, said the speaker “has not taken a position on the bill.” He did not explain why in response to questions from Gothamist. Menin did not sign on to a previous version of the legislation introduced by Sanchez in 2024.
Late last year, Menin maneuvered to kill another housing bill that was backed by Mamdani and a majority of councilmembers who had tried to override a veto by former Mayor Eric Adams.
That measure, known as the Community Opportunity to Purchase Act, or COPA, would have given tenant groups, nonprofits and some private developers a head start in buying some distressed apartment buildings, but the bill faced concerted opposition from landlord and real estate groups, including the influential Real Estate Board of New York, or REBNY.
Ann Korchak, board president of the landlord group Small Property Owners of New York, likened the new third-party transfer bill to COPA and said her organization opposes the measure.
“It's still the same wolf in sheep's clothing that would illegally take private property and life investments of struggling small generational, immigrant owners,” Korchak told Gothamist in a written statement.
But in written testimony Monday, REBNY’s director of urban planning, Maddie DeCerbo, said the group backs the new third-party transfer legislation because it “outlines a clear definition of distressed properties” to cover only the most extreme cases, and because it eliminates the “block pick-up” provision that swept up properties near a building targeted for foreclosure and transfer.
“REBNY supports the goal of ensuring that distressed properties are rehabilitated and that tenants live in safe, well-maintained housing,” DeCerbo said. “The [third-party transfer] program can serve as an important enforcement tool in truly extreme cases where long-term neglect of properties threaten residents and neighborhoods.”
