Mayor Zohran Mamdani’s administration is gearing up to wade into the foreclosure sale of roughly 850 rent-stabilized apartments across 38 East Harlem buildings that tenant organizers say have been left to rot. After years of missed repairs and loan defaults, the properties are in lenders’ hands and moving through the courts toward a sale. Residents and local organizers are pushing City Hall to nudge the portfolio into nonprofit or public ownership, hoping that will finally deliver repairs and lock in long-term affordability.
City Eyes Keeping Buildings in Community Hands
According to Gothamist, a review of city records shows the 38 buildings had a combined 2,342 housing-code violations as of April 3. Cea Weaver, director of the Mayor’s Office to Protect Tenants, told the outlet that Mamdani’s team is reviewing its options to intervene in the foreclosure process and favor buyers who will actually fix the buildings and keep tenants protected. The push comes on the heels of the administration’s attempt this past winter to block a separate, high-profile sale involving thousands of rent-stabilized units.
Fire-Sale Prices and Old Debt
The portfolio’s financial story reads like a cautionary tale. Investors who bought in before 2019 piled on debt and leaned on strategies that depended on steadily rising rents. When statewide rent-law changes cut off many of those rent-hike tactics, the math stopped working and owners were suddenly exposed. The buildings trace back to a 2016 deal that valued the package in the hundreds of millions of dollars, but individual properties have since traded at huge discounts. One 29-unit East Harlem building sold for roughly $285,000 in early 2025, according to The Real Deal. Those plunging values helped push lenders to foreclose and transfer control to a trust that now has to decide how, and to whom, the properties are sold.
Tenants Organized and Won
On the ground, tenants have already shown they are not waiting quietly for the market to sort itself out. Residents in five adjoining buildings along East 103rd Street staged a 16-month rent strike and ultimately secured a settlement that delivered more than $500,000 in rent credits and required repairs, City Limits reported. A press release from Legal Services NYC details the settlement terms and spells out the five addresses involved. Organizers say that victory helped strengthen the East Harlem/El Barrio Community Land Trust’s push to buy a cluster of the neighboring buildings and keep them permanently affordable.
How the City Could Step In
Community groups say that even acquiring and rehabbing a slice of the portfolio would take serious public backing. They point to low-interest HPD loans, gap financing and property-tax breaks as the kind of support a nonprofit buyer would need, and single out the city’s Article XI tax incentive as one key lever. The Article XI program provides exemptions and financing tools for HDFC-led affordable housing projects, according to HPD’s own guidance on the program. Gothamist reported that officials are exploring whether to help assemble that kind of financing package or otherwise steer the foreclosure sale toward nonprofit buyers.
Legal and Financial Stakes
The legal backdrop is just as important as the balance sheet. Last year, the New York Attorney General’s Office and state housing regulators ordered Emerald-linked properties to re-regulate illegally deregulated apartments and repay overcharges, according to a press release from the New York Attorney General. In many of the distressed East Harlem buildings, lenders and court-appointed receivers now handle day-to-day management. Whoever buys at the foreclosure sale will inherit both the rundown conditions and the existing legal obligations to tenants, a combination advocates say makes nonprofit or city-backed buyers a safer bet for long-term residents. Market watchers point to the portfolio’s heavy debt load and physical decay as reasons individual buildings have sold for a fraction of their pre-2019 values, according to The Real Deal.
What Is at Stake for the City
The question hanging over Mamdani’s team is whether a targeted rescue of this one troubled portfolio can serve as a blueprint for stabilizing rent-regulated housing across New York City. A recent Income and Expense study from the New York City Rent Guidelines Board shows mixed financial results across rent-stabilized buildings and pinpoints neighborhoods where owners are under the most strain, underscoring how complicated any preservation campaign will be. Whatever route the administration chooses, tenants and community groups say they plan to keep the pressure on for a deal that guarantees long-delayed repairs and long-term affordability.
