New York City will pay $60 million to owners of 64 properties seized under the controversial TPT program as Mayor Zohran Mamdani considers its revival. (Photo: Getty Images)
The settlement, filed in Manhattan federal court, would compensate owners of 64 properties taken during the program’s 10th round of seizures. The class-action lawsuit, filed in 2019, alleged that the city had taken properties without providing their owners with the compensation required under the Constitution. The 10th round covered 64 properties containing about 839 housing units, according to court documents cited by The New York Times. The broader lawsuit involves more than 500 additional properties, according to attorneys for the plaintiffs. The program was created in 1996 under then-Mayor Rudy Giuliani. Over the decades, the city conducted 10 rounds of property transfers, ultimately transferring more than 590 properties containing more than 7,300 homes, according to the lawsuit.
The settlement is still subject to approval by a federal judge, according to The New York Times. Dorce owned the building outright and had no mortgage on it, according to the lawsuit. The plaintiffs argued that the system sometimes resulted in owners losing properties worth substantially more than the amount they owed the city. Their lawsuit also alleged that some homeowners were not properly notified that their properties were being taken. After falling behind on water and sewer charges, he entered into a repayment agreement with the city and continued making payments. The lawsuit alleged that the city nevertheless seized the property without notifying him that the transfer had taken place. The lawsuit also alleged that the Third Party Transfer program disproportionately affected Black and Latino homeowners and communities. Critics have raised similar concerns about the program for years.
Dorce died in February, before the settlement was reached.
A 2019 City Council investigation also examined whether properties taken through the program met the city’s criteria for severe financial or physical distress, according to The New York Times.