Three New York City homeowners have taken Mayor Zohran Mamdani's administration to court, arguing that the city's rollout of a new tax on luxury second homes wrongly swept up thousands of full-time residents who don't owe the surcharge at all. The petition was filed Friday in Staten Island's Richmond County Supreme Court and does not challenge the legality of the tax itself — only how City Hall went about identifying who might owe it.
Who's Actually Suing
The so-called pied-à-terre tax targets one-, two- and three-family homes valued at $5 million or more, along with co-ops and condos worth $1 million or more, whenever the property isn't the owner's primary residence. To administer it, the city's Department of Finance posted a public database naming upward of 900,000 property owners whose homes could theoretically fall under the surcharge, then mailed roughly 17,000 formal notices demanding proof of residency.
The three plaintiffs are Staten Island homeowners Rachel O'Brien and Carmine Morano, plus Manhattan's Simon Hedley — and their political profile is more layered than "ordinary owner." O'Brien and Morano are, respectively, the wife and father of Frank Morano, a sitting Republican city councilman representing part of Staten Island who has been a consistent Mamdani critic and voted against the mayor's own budget in June. Hedley, notably, cuts against that pattern entirely: he's described himself as a Mamdani supporter who nonetheless received a notice on the Chelsea home he's owned and lived in for more than a decade.
The suit, filed as O'Brien v. City of New York (Index No. 85217/2026), names both Mamdani and Finance Commissioner Richard Lee. Leaning on an affidavit from former Finance Commissioner Martha Stark, the complaint alleges the city's own data shows only about 24,000 properties citywide actually meet the tax's value thresholds — yet notices went out to more than 70% of that pool, which the plaintiffs' filing calls roughly triple the number Stark's analysis suggests are truly liable. It's worth stressing this is the plaintiffs' characterization of their own expert's numbers, not city-confirmed data.
"The Mayor Wanted a Headline"
The homeowners are represented by Randy Mastro, who served as first deputy mayor under Eric Adams before resigning after Mamdani's 2025 election win, and who has since filed a string of suits against the new administration — including one seeking to block an East Village intake shelter and another, on behalf of landlords, trying to unwind Mamdani's rent freeze. Speaking to Gothamist, Mastro summed up his read of the tax rollout bluntly: "The mayor wanted a headline, and he got one." He's also disclosed that he personally received one of the disputed notices for his own Manhattan home.
The petition asks a judge to void the public database and the 17,000 notices, order the property list scrubbed from the Finance Department's website, and pause enforcement while the case proceeds. A Richmond County judge was set to hear arguments on a temporary restraining order Monday afternoon at 2:15 p.m.
City Extends the Deadline, Defends the Rollout
City Hall has already softened part of its approach. After the initial backlash, the administration pushed the residency-verification deadline from Aug. 21 to Sept. 18, and the Finance Department says it will accept tax returns, government IDs or comparable records as proof. Roughly 2,600 New Yorkers had filed exemption paperwork as of last week — among them Marvin Ciporen, an 82-year-old retired teacher in Park Slope, Brooklyn, who's owned his home since 1973 and was staring down an estimated $41,000 tax increase before Councilmember Shahana Hanif's office helped him file.
A Mamdani spokesperson pushed back on the lawsuit, telling CNN "the Law Department is prepared to vigorously defend the city against this suit." Mayor Mamdani has separately argued the confusion stemmed from conflating two different things — the broad property database, which he's said was a routine disclosure required under state law, and the much narrower set of 17,000 actual surcharge notices.
What the Tax Is Actually Funding
The pied-à-terre tax cleared the state legislature on May 26 with Governor Kathy Hochul's backing and is projected to bring in roughly $500 million a year toward closing New York City's budget gap. It's a piece of the $125.8 billion budget the City Council formally adopted on June 30 for the fiscal year that began in July — notably larger than the $124.7 billion figure floated in Mamdani's original proposal back in May. City Hall has pitched the tax as a fairness measure targeting absentee millionaires and foreign buyers who treat New York real estate as a vault rather than a home, and administration officials pointed to 93% public support for the idea when it was first floated in April.
That same budget commits roughly $4 billion in capital funding to the city's housing agency over five years, plus an additional $500 million in fiscal year 2031 earmarked for deeply affordable housing, and another separate $500 million in fiscal year 2028 for NYCHA repairs — investments the administration has tied directly to the broader push to close the budget gap. The city's own Comptroller's office, however, has cautioned that the $500 million projection carries real uncertainty, pointing to unresolved questions about how many high-value units are actually rented out full-time, how LLC and trust ownership will be treated, and how the city's habit of under-assessing luxury condos could affect final collections.
