A trio of New York City homeowners filed suit to halt Mayor Zohran Mamdani's luxury second-home tax surcharge, claiming the city dumped nearly a million names onto a public list without bothering to check who actually owes the tax.
The lawsuit, filed Friday in Staten Island Supreme Court, names the City of New York, Mamdani in his official capacity, the Department of Finance, and DOF Commissioner Richard Lee as defendants. It asks a judge to issue an emergency injunction voiding 17,000 notices mailed to homeowners, letters warning of five-figure tax bills, and to order the immediate removal of a roughly 900,000-name property list from the DOF website. The plaintiffs are Simon Hedley, a Manhattan homeowner in Chelsea; Rachel O'Brien, wife of Republican City Councilman Frank Morano; and Carmine Morano, the councilman's father. Both O'Brien and Carmine Morano live on Staten Island. Their attorney is Randy Mastro, a former first deputy mayor under Mamdani's predecessor, Eric Adams.
The suit does not challenge the underlying law. Governor Kathy Hochul and the state Legislature approved the pied-à-terre surcharge, which targets one- to three-family homes valued at $5 million or more and co-ops and condominiums worth at least $1 million that serve as unoccupied second residences rather than primary homes. What the plaintiffs challenge is how the Mamdani administration chose to enforce it, by publishing an enormous list and mailing thousands of notices before doing the basic homework to figure out which properties actually qualify.
Martha Stark, a former DOF commissioner who filed an expert affirmation alongside the lawsuit, laid out the math. Fewer than 3 percent of the 960,000 properties on the published tax roll, roughly 24,000, even meet the law's value threshold, the New York Post reported. Stark estimated the true number of properties subject to the surcharge sits between 5,000 and 6,000. The 17,000 warning letters the city mailed, she said, were "strikingly over-inclusive", roughly tripling the number of homes that would actually owe the tax.
State law gave the city tools to narrow the list. Stark's affirmation noted that the DOF was permitted to access a larger set of records, including state income-tax data, to determine which properties are genuinely unoccupied second homes. Instead, the city "published a list untethered to that information," according to Stark's filing.
The lawsuit alleges the DOF ignored its statutory obligation "to diligently assess and determine, using the vast resources at its disposal, the properties that are actually subject to the Surcharge." Rather than doing that work, the suit contends, the city "arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge."
That is the core complaint: the city shifted the burden. Instead of the government identifying who owes a new tax, hundreds of thousands of homeowners were told to prove they don't.
Mastro, the plaintiffs' attorney, filed his own affirmation with the court. He received one of the DOF's warning notices at his Upper East Side townhouse, a six-bedroom home he purchased for $14.3 million in 2016 and has lived in since. Mastro previously served as first deputy mayor, a role that required him to reside in New York City.
Mastro's filing made the point bluntly:
"Given my recent employment by the city, in a high level role requiring that I reside in New York City no less, it is inconceivable that the City's Department of Finance did not have records available to it demonstrating that my primary residence is at the property to which it sent me this notice."
If the DOF could not figure out that its own former first deputy mayor lives full-time in the home where it mailed him a tax threat, the question of what records the agency actually consulted before printing 17,000 letters answers itself.
Mastro has already emerged as a frequent legal adversary of the Mamdani administration. He previously challenged the city over the relocation of Bellevue's men's shelter to the East Village and over the administration's rent freeze on stabilized apartments. The Mamdani administration now faces a separate legal challenge from an immigrant business coalition over its $70 million taxpayer-funded grocery store program, another initiative where critics say the mayor moved faster than the details could support.
Simon Hedley, the Chelsea plaintiff, told the New York Post on Friday that the DOF has "endless access to records to really get a fairly accurate idea about who's resident and who isn't."
"They don't seem to have done any due diligence around town, as far as I can tell; they've scattergunned thousands and thousands of people without really knowing who's who."
Hedley described the notice he received as "somewhat a somewhat threatening letter" and said homeowners "shouldn't be getting letters like this." He added that he and others "are genuinely in support of many of the things that Mamdani is doing for the city to make it a better place," but said the mayor needs to "get it right" on this tax's execution.
That a self-described Mamdani supporter felt compelled to join a lawsuit tells you something about how far the rollout missed the mark. The bipartisan backlash against the published property database had already signaled broad frustration across political lines.
The Mamdani administration responded to the growing confusion by extending the exemption filing deadline from the end of August to September 18. Last month, Mamdani had released a video telling owners of second homes worth more than $5 million to "check your mailbox", a move that preceded the wave of notices and the public backlash that followed.
The lawsuit alleges the published list "set off a panic among New York City homeowners," "should never have been posted in the first place," and "has caused mass confusion." It claims the city later tried to walk back the damage, characterizing the administration as having "furiously backpedaled" to describe the list as "meaningless."
City Councilman Frank Morano, whose wife and father are plaintiffs, did not hold back:
"City Hall did this backwards. This lawsuit is about forcing the administration to follow the law, clean up a botched rollout and stop making New Yorkers prove facts the government may already have at its fingertips."
Mamdani spokesman Matt Rauschenbach said the Department of Finance "has been working around the clock" to provide information to people who may be subject to the new tax. He added that "whenever government asks something new of New Yorkers, we have a responsibility to make the process clear, transparent and accessible." Rauschenbach said the city Law Department will fight the suit in court.
The administration's defense, that it is working hard to inform people, sidesteps the plaintiffs' central argument. The complaint is not that the city failed to communicate. The complaint is that the city communicated the wrong information to the wrong people, on a massive scale, and then told those people to sort it out themselves. Mamdani has faced a pattern of policy reversals and forced retreats, including dropping costly campaign pledges in a last-minute budget deal with the City Council.
No hearing date on the emergency injunction request has been announced. The lawsuit asks a judge to void the 17,000 mailed notices, relieve homeowners from having to respond to them, and scrub the 900,000-name list from the DOF website entirely.
Several questions remain unanswered. What records did the DOF actually consult before publishing the list? Why did the city choose to publish a roll of nearly a million properties when its own data, by the former commissioner's analysis, showed only a few thousand qualified? And if the administration now considers the list "meaningless," why was it posted in the first place? The published list also exposed some of the mayor's own celebrity supporters to public scrutiny, adding an ironic dimension to the fallout.
A government that publishes 960,000 names when it needed 5,000 did not make an administrative error. It skipped the work, sent the bill to the homeowners, and called it policy. That is not how a tax is supposed to work in a country where the government bears the burden of getting it right.