A bipartisan group of City Council members excoriated the Mamdani administration on Tuesday for ditching a gripe-filled hearing on the botched rollout of the mayor’s new pied-à-terre tax.
Meanwhile, the number of households the city now admits were wrongfully targeted for the hefty surcharge continued to rise from 1,906 a week ago to 2,318 as of Monday — a 21% spike.
And more property owners who received notices threatening them with the tax joined a lawsuit alleging the administration didn’t do its homework before hitting thousands of home, condo and coop owners across the five boroughs with the ominous notices.
In May, Mayor Zohran Mamdani persuaded Gov. Kathy Hochul and the state Legislature to approve the new tax to help close a $5.4 billion city budget gap. The measure imposes a surcharge on expensive homes owned and kept largely vacant by out-of-towners, but thousands of real-life New Yorkers were threatened with the new tax if they could not quickly muster the paperwork to prove residency.
The city Department of Finance sent out notices to 17,000 households last month asserting they were subject to the tax, placing the burden on them to prove the targeted properties were not second homes — when the city already had access to some data that could show otherwise.
The department was immediately inundated with applications seeking exemptions from the charges, which could increase a property owner’s tax burden by tens of thousands of dollars. By last week, 4,290 owners had applied. As of Tuesday, that number had more than doubled to 9,884.
Flooded with complaints from constituents, the City Council tried to get more clarity from City Hall on how the administration determined who would get the dreaded notices.
Councilmember Gale Brewer (D-Manhattan), chair of the governmental operations committee, and Linda Lee (D-Queens), chair of the finance committee, asked City Hall to send a representative in person to explain the Finance Department’s protocols.
With Mamdani on vacation upstate, the Council expected to hear from Finance Commissioner Richard Lee. A day before the hearing, the mayor’s office informed Brewer no one from the administration would attend, citing the pending litigation. An hour before the hearing, they sent over a five-page written statement from Lee that provided few details on his department’s methods.
Brewer, who dubbed the event a “strange hearing,” was then forced to read Lee’s statement into the record to an empty witness table. The statement included a partial mea culpa from the finance commissioner: “I understand there are concerns regarding this surcharge. I also understand that there are individuals who received an initial determination letter who may not ultimately owe the surcharge.”
When Brewer finished, her colleagues — both Democrats and Republicans — blasted the mayor for the administration’s no-show performance.
“Regardless of what’s going on in this administration, they should show up,” said Councilmember Eric Dinowitz (D-Bronx).
“They are not here because they don’t want to answer questions,” said Councilmember Vickie Paladino (R-Queens).
“So much for transparency,” complained Councilmember Phil Wong (D-Queens).
The surcharge’s rollout is already the subject of a lawsuit filed in state court by attorney Randy Mastro, a former deputy mayor to both Eric Adams and Rudy Giuliani who received a pied-à-terre notice for his Upper West Side townhouse. On Tuesday, Mastro added to his lawsuit the owners of three more properties who were threatened with the tax.
That included Kenneth Fishel, who said the Finance Department sent a surcharge notice to another resident in his Park Avenue, Manhattan, coop that the address listed on the notice indicated was actually meant for him. The notice claimed he owed $58,479 on a coop the department had determined was worth $1.46 million.
“Fishel only learned of and obtained a copy of the notice because he ran into his neighbor living 27 floors below him on the elevator,” the lawsuit alleged.
Fishel applied for an exemption but was told that one had already been filed, according to the suit.
“Without relief, Petitioner Fishel will be required to continue navigating the City Respondents’ burdensome scheme in an attempt to obtain an ‘exemption’ from a Surcharge that does not apply to him,” the lawsuit asserted.
The suit is set for a hearing on Aug. 31.
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