New York City Mayor Zohran Mamdani signed legislation Tuesday giving vetted nonprofits a first shot at buying troubled city apartment buildings.
The new measure arrived too late to spare hundreds of rent-stabilized units from foreclosure, a second loss in Mamdani’s bid to protect such units.
Mamdani ran for office and won on creating and protecting affordable housing. National attention has since focused on his efforts to build more housing and cut red tape. His political inspiration and influence have spread to other parts of the country.
Nithya Raman is a prime example. Under a similar affordability theme, the Los Angeles City Council member, also a member of the Democratic Socialists of America, ousted an incumbent to become L.A. mayor.
The Community Opportunity to Purchase Act, known as COPA, requires owners of covered buildings to notify the city and qualified nonprofits before selling. Those groups then get time to make an offer and a right to match a later one. The law takes effect one year after enactment, after the Department of Housing Preservation and Development writes rules.
“This law will give New Yorkers a tool to keep their homes out of the hands of predatory investors seeking to make a quick and easy buck,” Mamdani said at a signing event Tuesday.
He also won in court last week. A Brooklyn appellate panel ruled Nov. 4 that the administration can resume collecting its pied-à-terre tax on high-end second homes, reversing a Staten Island judge who found the rollout flawed. Mamdani says the tax could raise $500 million a year. Other legal challenges remain.
But his administration could not stop the sale of a 38-building portfolio with 850 mostly rent-stabilized apartments. Spatial Equity, an affordable housing developer with City Hall’s backing, failed to close a deal to buy the portfolio before an East Harlem auction began Tuesday afternoon.
Had COPA been in effect, a deal like Spatial Equity’s might have followed a defined timeline. Once notified of a sale, qualified groups have 20 days to tell the owner and the Department of Housing Preservation and Development they intend to buy. They then have 70 days to submit a competitive offer.
The clock favors the owner if no one steps forward. A property can go to the open market if no group signals interest in the first 20 days. The same goes if the owner rejects every offer by the end of the 70-day window.
Eligible buildings have four or more units and meet at least one test: a year in a city housing enforcement program, an average of three or more hazardous violations per unit, or affordability restrictions under agreements with HPD.
“Those buildings are not just any buildings, Mamdani said. “They are multifamily buildings that have long been victim to pernicious cycles of speculation.”
The failed bid
The 38 buildings belonged to bankrupt Emerald Equities Group. Banks and other institutions that control about $250 million in mortgage loans will foreclose on each building over three auction days.
Lenders rejected Spatial Equity’s initial $68 million bid, according to a City Limits report. They also turned down a $110 million offer last month, tenant leader Cara Polte told Gothamist.
Polte said tenants will keep pushing for a buyer committed to fixing the buildings. Tenants had hoped to turn her building and four others on the block into a community land trust.
A trust managed by several banks and by Sabal Investment Holdings controls the loans. Freddie Mac partially insured them. Sabal has yet to respond to media requests.
Cea Weaver, director of the Mayor’s Office to Protect Tenants, said the sale does not end the city’s effort to force owners to improve conditions.
A second test after Pinnacle
This setback follows Mamdani’s first loss on this front. On Jan. 1, he stood in a Pinnacle-owned building and vowed to take on bad landlords. He then sought a 30-day delay of the bankruptcy auction of Pinnacle’s rent-regulated portfolio, hoping to find a buyer other than Summit Properties USA.
A judge allowed the sale to proceed. Summit won about 5,100 mostly rent-stabilized units from Pinnacle, which had filed for Chapter 11 after Flagstar Bank foreclosed.
Debt, disrepair and the 2019 law
Emerald bought the 38 buildings for $350 million in 2016 and began raising rents on stabilized apartments. It took out another $180 million loan in December 2018, six months before state lawmakers passed tenant protections that outlawed many of those tactics.
Lenders foreclosed in 2024. Emerald filed for bankruptcy a year later.
A state investigation found Emerald had illegally removed 21 apartments from rent stabilization. The buildings had more than 2,300 housing code violations in April. A retaining wall behind buildings on East 103rd Street collapsed earlier this year, days before Mamdani and Weaver visited in March.
Distress across the stabilized stock
About 1,600 rent-stabilized buildings face financial distress, according to Rent Guidelines Board data. Landlord groups blame rent restrictions, including the board’s two-year rent freeze. Tenant advocates say owners like Emerald borrowed heavily expecting rent increases that later law barred.
In June, Mamdani won a rent freeze through the Rent Guidelines Board for the city’s roughly 1 million stabilized apartments.
Landlords sued to reverse the freeze. The case began in Staten Island, but Justice Ralph Porzio moved it to Manhattan in August, handing Mamdani a partial win. In September, the judge ordered City Hall to turn over communications with the board and signaled he would likely not rule by Oct. 1.
Oct. 1 came and went without a ruling, and the freeze took effect for new and renewing leases.
Meanwhile, a federal lawsuit remains pending over a 2019 state law that limits rents on stabilized units. Small property owners sued in November 2025, arguing the law unconstitutionally keeps stabilized apartments vacant.
COPA’s path was uneven until Mamdani took office. The City Council passed an earlier version in December 2025, but then-Mayor Eric Adams vetoed it, and the Council did not override him. A revised, narrower version passed Oct. 22.
“Progress … is something that we celebrate, and also, we know that it is not inevitable,” Mamdani said. “It has to be won.”
