A federal housing block delivered an early legal setback to New York City Mayor Zohran Mamdani after a bankruptcy judge rejected the city’s attempt to intervene in the sale of thousands of rent-stabilized apartments. The ruling halted Mamdani’s first major effort to assert control over a private real estate transaction tied to tenant complaints and unpaid city fines.
On Thursday, U.S. Bankruptcy Judge David Jones blocked the city’s bid to slow the sale of properties owned by Pinnacle Group to Summit Properties USA. Mamdani’s administration argued the city qualified as a creditor because Pinnacle owes more than $12 million in unpaid fines. The court rejected that position, clearing the way for approval of the sale as soon as this week.
City officials said tenants raised concerns about poor maintenance under Pinnacle and feared similar treatment from the prospective buyer. Despite the housing block, the administration signaled it will continue pushing regulatory oversight. “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,” said Leila Bozorg, the city’s deputy mayor for housing.
The ruling follows fresh controversy surrounding Mamdani’s housing agenda. His decision to appoint Cea Weaver to lead the Mayor’s Office to Protect Tenants drew scrutiny over past statements describing home ownership as a “weapon of white supremacy” and arguing property should be treated as a “collective good.”
Weaver later said she regretted “some” prior remarks and emphasized her current focus. “But, you know, I do think my decades of experience fighting for more affordable housing sort of stands on its own,” Weaver said. “I want to make sure that everybody has a safe and affordable place to live — whether they rent or own.”
