Judge Orders Mamdani to Scrap, Redo Pied-à-Terre Rollout

A judge ordered Mayor Zohran Mamdani’s controversial pied-à-terre surcharge back to square one on Tuesday, finding that the initial rollout must be redone to reach a narrower group of eligible homeowners.

The suit, spearheaded by former Deputy Mayor Randy Mastro, was brought on behalf of homeowners who believed they shouldn’t have been named on any list of homeowners potentially eligible for the pied-à-terre tax. The supplemental tax roll that included their names must be removed from the Department of Finance website and the mailed notices homeowners already received must be canceled, Judge Wayne M. Ozzi said in his order.

The Staten Island judge directed the city to file a new “limited” supplemental roll reflecting only properties that are subject to the surcharge and ordered the city to mail new notices that specifically identify the non-primary residence in question and point to factors used to determine eligibility.

The initial supplemental roll published by the DOF included more than 900,000 homeowner names and addresses that met its value threshold of $5 million for one-, two-, and three-family homes or above $1 million for co-ops and condos, intended to identify properties potentially subject to the surcharge. The city also sent notices to more than 17,000 homeowners informing them they may be subject to the second-home surcharge.

The judge said that the Mamdani administration didn’t undergo adequate due diligence in determining who would receive the letters or which homes would appear on the list. He also found that the exemption application process the city put forth amounted to “unlawful burden shifting,” calling out the administration for taking “shortcuts” that violated due process.

“Today’s decision is wrong, and we will invoke a stay of the injunction,” mayoral spokesperson Matt Rauschenbach said in a statement. “With a stay, we will continue implementing the surcharge fairly, efficiently and in full compliance with the law, as we have since day one.”

The deadline for homeowners who received letters to submit exemption applications, which has already been extended twice, is fast approaching on Oct. 6.

“We have opposed this tax from day one. But this case was about something even more basic,

whether the City follows its own rules before it puts the burden on the people it serves,” Jason Haber, co-founder of the American Real Estate Association, said in a statement. “The administration should not spend the next several months defending a process that failed.”

This wasn’t Mastro’s only pied-à-terre legal maneuver of the day. The lawyer also represents homeowners who filed a broader constitutional challenge to the pied-à-terre tax itself on Tuesday in Suffolk County Supreme Court, which alleges that the state put forth a discriminatory law. The suit echoes arguments in a separate suit filed Monday by hotelier and developer Steve Wynn, former commerce secretary Wilbur Ross and his wife, philanthropist Hilary Geary Ross.

“I guess I’m blessed to have had a big day, but no it’s entirely coincidental that these two things happened on the same day,” Mastro said. “Each case rises or falls on its own merit … I feel blessed to be helping so many New Yorkers who have the courage to fight City Hall.”

The case filed in Richmond County court, which counts Kenneth Fishel of Renaissance Properties and two family members of Council member Frank Morano among its petitioners, is limited in scope. The August complaint took aim only at the allegedly “botched” rollout of the surcharge, which Judge Ozzi found arbitrary and capricious, “affected by errors of law” and in violation of the letter recipients’ due process rights.

“Our Administration is fighting every day to deliver for working New Yorkers. The ultra-wealthy are fighting in court to avoid paying their fair share,” Rauschenbach said. “They have filed lawsuit after lawsuit to protect their privilege, and we will not back down.“New York is a city for the many — not a tax haven for the wealthy few.”

Judge Ozzi ordered the city to use the most recent available tax information in making its determination of primary or secondary residence status, a point that Mastro seized upon at oral arguments when he argued that the city relied on outdated tax information to craft its initial list and letters.

“They published a log of hundreds of thousands of New Yorkers who are homeowners to embarrass them,” Mastro said. “Sometimes city administrations screw up. This one’s a whopper, and that’s what a judge has now found. So do it over again and do it right, Mamdani administration.”

Mastro encouraged any appellate panel not to automatically stay Tuesday’s order pending the outcome of an appeal.

“I’ve sued Bloomberg, De Blasio, even Adams before I became first deputy mayor and now Mamdani,” Mastro said. “I’m a non-denominational lawyer. I don’t care whether you’re a Republican, Democrat or socialist.”