Politics
NEW: Zohran Mamdani Suffers Significant Legal Setback On Top Campaign Promise
A federal judge on Thursday blocked New York Mayor Zohran Mamdani’s effort to intervene in the sale of thousands of rent-stabilized rental properties in the city.
Mamdani’s administration had sought to intervene and block the sale of the properties after tenants complained that the property owner, Pinnacle Group, had failed to adequately maintain units. The administration indicated that it had concerns that the prospective buyer, Summit Properties USA, would have similar issues.
The mayor’s administration had sought to intervene on the basis of being a creditor to Pinnacle. According to a report from the Gothamist, Pinnacle Group currently owes the city over $12 million in unpaid fines.
Bankruptcy Judge David Jones rejected Mamdani’s effort, however, marking an early legal setback for the new mayor.
Mamdani, a self-styled socialist who assumed office on January 1, had immediately moved to aggressively penalize negligent property owners and protect rent-stabilized housing. Hours after his inauguration, he visited a Pinnacle-owned building in Flatbush, Brooklyn, and announced the city’s involvement, citing Pinnacle’s $12.7 million in unpaid fines to the city as grounds for creditor status.
Mamdani delivers his inaugural address on January 1, 2026
On January 5, city attorneys, led by Corporation Counsel nominee Steven Banks, filed a motion seeking a 30-day delay to scrutinize Summit’s bid. The filing expressed doubts about Summit’s ability to fund repairs and maintenance while servicing debts, given the regulated rents averaging low figures.
Judge Jones, presiding over the case in federal bankruptcy court, rejected the city’s plea without granting the requested reprieve. His decision emphasized proceeding with the auction timeline, dismissing concerns about the bidder’s viability as insufficient grounds for delay.
The sale now awaits final court approval at a hearing on January 15, though objections from tenants or other parties could still arise.
In response to the ruling, Mamdani’s administration vowed to persist with their efforts. “We will continue to fight to ensure any owner of this portfolio makes necessary repairs to bring the buildings up to code and respects the rent stabilization regulations,” said Deputy Mayor for Housing Leila Bozorg.
The ruling carries profound implications for Mamdani’s campaign promises, which centered on making New York affordable through intervention in the housing market. In order to do so, he has pledged to freeze rents for two million rent-stabilized tenants by appointing sympathetic members to the Rent Guidelines Board, build 200,000 affordable units over a decade, and force negligent landlords to sell properties to the city if fines go unpaid.
The Pinnacle case was widely viewed as a litmus test for these goals, with Mamdani aiming to steer the sale toward tenant-friendly outcomes, potentially involving city or nonprofit acquisition.
