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New York City just agreed to pay $60 million to owners whose homes were seized under the old Third‑Party Transfer program. That payout landed in federal court this week as Mayor Zohran Mamdani pushes to revive and reshape the same tool under his “Block by Block” housing plan. The settlement is a wake‑up call. It should make city leaders slow down and fix the program — not rush to repeat its worst mistakes.
The $60 million settlement — a warning sign
The city’s $60 million deal covers Round 10 of the Third‑Party Transfer (TPT) program. That round involved 64 properties and about 839 housing units that were taken and transferred in 2017–2018. Owners sued, arguing the city seized buildings without giving proper notice or fair pay for equity above taxes and liens. The city says it does not admit wrongdoing but chose to settle to end a long fight. A federal judge still must approve the deal, so the matter is not fully closed.
Third‑Party Transfer: good idea, bad execution
TPT was supposed to rescue buildings with big code violations or tax debts. In practice the program sometimes swept up whole blocks because of one troubled building. That “block pickup” rule let the city take properties that had little or no debt. Families and small owners — often Black and Latino — lost equity and control of their homes. The program was paused and hit with lawsuits for a reason. Fixing the tool means fixing how it decides who loses their property.
Mamdani’s “Block by Block” pitch — reform or rerun?
Mayor Zohran Mamdani says he will revive TPT with new guardrails as part of Block by Block. City officials, including the Department of Housing Preservation and Development, argue the transfers didn’t violate rights but that settling is simpler than more fights in court. The City Council is already holding hearings and discussing bills that would limit block pickup and require better notice and compensation. Those changes matter. But talk of expanding the definition of “distressed” properties while a $60 million settlement is fresh looks like doubling down on a failed experiment.
What to watch next
The real test will be the details. Will the city require full market‑value compensation for seized equity? Will it narrow triggers so small debts don’t cost owners their homes? Can the administration prove a revived TPT will protect tenants and small owners without creating more legal and budget risks? The settlement should be a lesson, not a speed bump. If Mayor Mamdani wants to use TPT to fix bad landlords, he must make the fixes real — or be ready to pay for the next round of mistakes out of taxpayers’ pockets.
