Three homeowners — including the wife and father of a Republican city councilmember — sued New York City on Friday, seeking to postpone the implementation of Mayor Zohran Mamdani’s new pied-à-terre tax over what they claim was a chaotic and rushed rollout.
If the legal challenge is successful, it could delay the city’s ability to begin collecting an estimated $500 million in revenue.
The lawsuit, which doesn’t challenge the tax’s merits, seeks to extend the deadline for homeowners to respond and prove whether they are full-time residents. The plaintiffs argue that the Mamdani administration “caused mass confusion” last month when it announced the rollout of the tax by publishing a database of properties that were mostly not subject to the tax.
The homeowners are asking the court to force the city to take down the database, which features information that is publicly available on other city-run sites.
The surcharge applies to those who own second homes worth more than $5 million and condos and co-op second homes with “market values” of more than $1 million.
The confusion emerged late last month when city officials published a database of more than 900,000 properties they said might be subject to the surcharge. They eventually sent notices to a much smaller set of 17,000 people saying they were identified as potentially being subject to the tax.
“The mayor wanted a headline, and he got one,” said lawyer Randy Mastro, who is representing the homeowners and was first deputy mayor under previous Mayor Eric Adams. “Thousands of people who owe nothing have been confused, exposed, and put to real expense so this administration could make a political point. That is not lawful notice.”
Matt Rauschenbach, a spokesperson for Mamdani, said the city’s Law Department would “vigorously defend the city against this suit” and that officials have been “working around the clock” to respond to questions about the tax.
“The pied-a-terre surcharge will help deliver the city New Yorkers deserve: cleaner parks, safer streets and critical public investments that make our city a more affordable place,” he said in a statement. “As the mayor has said, we also know that whenever government asks something new of New Yorkers, we have a responsibility to make the process clear, transparent and accessible.”
The three homeowners who brought the suit are Rachel O’Brien, Carmine Morano and Simon Hedley. O’Brien is married to Republican City Councilmember Frank Morano, who represents parts of Staten Island. Carmine Morano is his father.
Mamdani has defended the city’s process, saying the database was a routine release of the city’s property tax roll required under state law. Nonetheless, many city homeowners panicked after they saw their names on the list. Tax attorneys said they were flooded with calls.
The city’s Department of Finance later amended its website to note, “The vast majority of properties and units listed in the roll will NOT be subject to the surcharge.” Earlier this week, the mayor announced that the city would extend the deadline for people who received the letters, which was originally Aug. 21. They now have until Sept. 18 to respond.
“The thing we did not want to do was levy this charge without giving New Yorkers a period of time where they could engage with the city,” Mamdani told reporters on Monday. “And now that’s this period of engagement.”
Hedley, a Manhattan homeowner, identified himself as a Mamdani supporter. He said in the suit he did receive a letter indicating he had been identified as subject to the second home tax.
“As a full-time New York City resident and homeowner, receiving a threatening letter warning of a potentially massive pied-à-terre surcharge bill was deeply unsettling,” he said in a statement. “The city has endless ways to verify residency; resorting to a scattergun approach and demanding that residents prove their status is disturbing, and not a very friendly act toward someone who lives in New York City.”