New York City Just Paid Sixty Million Dollars for a Housing Program Mamdani Wants Back

Mayor Zohran Mamdani wants city hall to start seizing apartment buildings again.

New York already ran this exact play once before.

Sixty million dollars just went out the door for a program city hall is racing to bring back.

The Program New York Already Tried and Already Regretted

New York City has a name for taking property away from owners who fall behind: the Third Party Transfer program.

City Hall created it in the 1990s under Mayor Rudy Giuliani.

The pitch was simple.

Seize buildings over unpaid taxes or water bills, hand them to developers, and turn blight into affordable housing.

It did not work out that way for the people who lost their homes.

Nearly 700 homeowners, most of them Black and Latino, say the city never properly notified them before their deeds changed hands.

Sherlivia Thomas-Murchison was one of them.

City workers handed her Bedford-Stuyvesant co-op, plus a unit she had inherited nearby, over to a private developer in 2018, and she and her two kids had nowhere left to live.

"The same laws were craftily manipulated … to steal resident-owned cooperative units and eradicate our right to pass shares to our children," Thomas-Murchison testified.

She and two other homeowners, McConnell Dorce and Cecelia Jones, sued the city and its developer partners in 2019.

They argued the program was a vehicle for gentrification that pushed Black and Latino families out of their own neighborhoods, and they sought roughly a billion dollars in lost equity and wealth.

A federal appeals court let the case move forward after a lower court tried to stall it.

A Bed-Stuy Grandmother Lost Her Home and City Hall Just Paid for It

New York City has now agreed to pay sixty million dollars to property owners whose buildings were taken under that same seizure program.

Sixty million dollars is not an abstraction.

It is a number that exists because a government agency took people's homes first and asked questions never.

City Hall does not write checks that size for programs that worked.

Mamdani Wants to Run the Same Play With a New Name

While that settlement was getting finalized, Mayor Mamdani rolled out a housing plan called Block by Block.

Buried inside it is a promise to go after landlords he brands "negligent."

"For buildings that have suffered chronic neglect, we will work to transfer ownership to responsible stewards, stewards that include community land trusts, nonprofits, or even the tenants themselves," Mamdani said in unveiling the plan.

His team has said it will "take aggressive legal action to remove negligent owners and property managers."

Ann Korchak, board president of Small Property Owners of New York, called the plan "a one-sided, pro-tenant plan" that ignores distressed small rent-stabilized owners.

Those are landlords squeezed by the same rent-stabilization rules city hall wrote, not the deep-pocketed operators Mamdani says he is targeting.

New York Tried This in the Seventies Too

Seizing property from owners in the name of housing justice is not a new idea in this city.

New York ran a similar experiment decades ago, taking over abandoned buildings and eventually pushing many of them into nonprofit hands.

It did not produce a housing paradise.

New York City itself became "the state's largest slumlord," according to the Manhattan Institute, with government-run buildings falling into the same disrepair the seizures were supposed to fix.

Mamdani is not proposing an experiment.

He is proposing a rerun, dressed up in the language of community land trusts and responsible stewardship, of a program this city just admitted it botched.

City hall wrote a sixty million dollar check admitting the last version of this program went too far, and it is already building the next one.

Sources:

• Sherlivia Thomas-Murchison, McConnell Dorce, and Cecelia Jones v. City of New York, class-action complaint, U.S. District Court, Eastern District of New York, filed 2019.
• NBC News, "Black New Yorkers Strike Back at City Program Seizing Their Properties," NBCBLK, 2026.
• Manhattan Institute, "Mamdani's Plan to Seize Property, Explained," Manhattan Institute, 2026.
• Legal Insurrection, "Inside Mamdani's Plan to Seize 'Neglected' Properties, Redistribute to 'Responsible Stewards,'" Legal Insurrection, 2026.
• New York Post, "NYC Agrees to Shell Out $60M to Property Owners Whose Buildings Were Seized Under Program Mamdani Vows to Revive," New York Post, Sept. 15, 2026.