Judge Throws Wrench In Mamdani’s Plan to Take Over NYC Housing
A federal bankruptcy judge on Thursday shut down New York City Mayor Zohran Mamdani’s attempt to interfere in the sale of thousands of rent-stabilized apartments, dealing an early blow to the progressive mayor’s effort to reshape housing policy through the courts.
The Mamdani administration sought to delay the transaction after tenants accused the current owner, Pinnacle Group, of failing to properly maintain the properties. Tenants also voiced concerns that the prospective buyer, Summit Properties USA, could continue the same practices if the deal moves forward.
City officials argued they had legal standing to intervene because New York City is listed as a creditor of Pinnacle, which allegedly owes more than $12 million in unpaid fines, according to Gothamist.
U.S. Bankruptcy Judge David Jones rejected that argument, blocking the city from participating in the sale and marking a significant setback for Mayor Mamdani’s legal strategy, Fox Business Network reported. Jones could approve the sale to Summit as soon as Thursday, though the mayor’s office says it is still weighing its options.
“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,” Deputy Mayor for Housing Leila Bozorg told the outlet.
Ideological Turmoil Inside City Hall
The courtroom loss comes amid growing controversy surrounding Mamdani’s housing agenda, particularly his appointment of Cea Weaver to lead the Mayor’s Office to Protect Tenants. Weaver has previously claimed that homeownership is a “weapon of white supremacy” and argued that private property should be treated as a “collective good.”
Facing backlash, Weaver said she regrets “some” of her past comments, though she declined to specify which ones. She emphasized that her focus remains on addressing what she described as systemic inequities in housing.
“But, you know, I do think my decades of experience fighting for more affordable housing sort of stands on its own,” Weaver said. “I’m proud to be in this role fighting for stronger tenants’ rights. And I think that for many years, people have been locked out of the property market, that has produced systemic and racial inequalities in our system.”
“I want to make sure that everybody has a safe and affordable place to live — whether they rent or own,” she added. “And that is something that I’m laser-focused on in this new role.”
Billions at Stake in Bankruptcy Sale
Pinnacle, owned by billionaire Joel Wiener, controls approximately 140 buildings and nearly 9,000 apartments throughout New York City, according to court filings. After filing for bankruptcy, Summit Real Estate Holdings submitted a $450 million bid to purchase dozens of Pinnacle properties across Brooklyn, Manhattan, the Bronx, and Queens. The transaction cannot proceed without court approval.
“Completion of the bankruptcy auction process will bring financial stability along with the opportunity to stabilize services, outcomes which we would expect the City would not want to disrupt,” Pinnacle attorney Ken Fisher said in a recent statement regarding the proposed sale.
City lawyers, however, raised alarms in court filings about Summit’s financial capacity, warning that the buyer may lack the resources to meaningfully improve conditions at the properties.
“Continuing losses and mounting expenses might lead to the need for additional bankruptcies or reorganizations, a state of financial and social chaos potentially worse than the current situation of the debtors themselves,” the city argued.
Tenant activists remain unconvinced. The Union of Pinnacle Tenants — formed to oppose the sale — alleges the current landlord neglected repairs, failed to pay utility bills, and allowed buildings to deteriorate. Members fear that a new owner will bring more of the same.
The dispute over the Pinnacle portfolio became a flashpoint in the recent mayoral race, as housing activists highlighted New York City’s soaring rents and housing costs. Critics argue that years of aggressive regulation and political interference have only worsened affordability, pushing low-income residents closer to homelessness in one of the most expensive housing markets in the nation.