Let’s talk about a quiet but consequential piece of policy making its way through New York City right now — one that could fundamentally reshape who gets to own property in the five boroughs, and why it matters far beyond the Hudson River.
Mayor Zohran Mamdani has thrown his weight behind the revival of COPA — the Community Opportunity to Purchase Act — a bill that would require property owners selling residential buildings of four or more units to first offer the right of first refusal to qualified nonprofits, community land trusts, or the city itself before taking it to the open market. Former Mayor Eric Adams vetoed it in the final hours of his term. Now it’s back, and Mamdani’s office has made clear they want it on his desk.
So what does this actually do? The mechanics are straightforward. Qualified groups like community land trusts would have 25 days to submit a statement of interest, then 80 days to make an official offer on the property before any other buyers can take a shot at it. Newyorkmetropolitan That’s a little over three months for mission-driven organizations to step in and keep residential buildings out of the hands of large investment groups or out-of-state holding companies.
Sounds reasonable enough on its face. But this is one piece of a much larger mosaic that Mamdani is assembling, and it’s worth stepping back to see the full picture taking shape.
The Strategy Behind the Policy
Mamdani came into office with an affordability agenda that is, depending on your perspective, either ambitious and necessary or deeply unsettling to private property markets. He wants to freeze rents on roughly a million stabilized units. He’s pushing $70 billion in new capital spending to build 200,000 publicly-subsidized, union-built homes over the next decade. He’s looking at the city itself acting as a “non-speculative market actor” — stepping in to purchase distressed buildings when landlords decide they’re done.
COPA fits into all of that like a puzzle piece you didn’t know was missing. A landlord gets squeezed — by the rent freeze, increased code enforcement, or simply the math not working anymore — and decides to sell. Without COPA, that building goes to whoever offers the most money. With COPA, a community land trust gets first look. If they can finance it, the building stays affordable potentially forever.
Council Member Sandy Nurse, the bill’s sponsor, says COPA keeps housing in the hands of the community and curbs landlords from selling to big property groups. Newyorkmetropolitan And Mamdani’s office echoed that framing, saying the act would give tenants a real opportunity to shape the future of their homes.
The Critics Aren’t Wrong to Ask Questions
The real estate industry has been loudly opposed to COPA since it was first introduced five years ago. Its sponsor is already anticipating lawsuits attempting to stop it. Newyorkmetropolitan That’s not just posturing — mandatory waiting periods and preferential purchase rights raise legitimate Fifth Amendment questions that the courts will eventually have to sort out. There’s also the practical financing question. Giving nonprofits and community land trusts the right to purchase a building means nothing if they can’t actually close a deal within the statutory window. Without dedicated funding infrastructure — city acquisition funds, low-interest bridge loans, state-backed financing vehicles — COPA becomes a symbolic gesture rather than a structural shift.
And Then Comes the Budget
If COPA was the policy that raised eyebrows among real estate circles, what Mamdani dropped on February 17th stopped the whole city cold.
Facing a $5.4 billion budget gap, Mamdani presented a “last resort” option of raising the property tax rate. THE CITY Not a small nudge — he said he would raise property taxes on over 3 million residential units and 100,000 commercial buildings by 9.5 percent if the state does not raise income taxes to balance the budget. Reason Magazine
We’re talking about a mayor simultaneously telling landlords they can’t freely sell to the highest bidder, freezing rents on a million units, and threatening to raise property taxes by nearly ten percent. All within the first two months of his term.
Andrew Rein of the Citizens Budget Commission called this a “false choice,” arguing the best path is to “eliminate spending that does not improve New Yorkers’ lives and make government more efficient and effective.” Reason Magazine City Council Speaker Julie Menin and Council Member Linda Lee stated jointly that “at a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever.” amNewYork
Governor Hochul has been equally resistant. She told reporters she does not “think a property tax increase is necessary” and has repeatedly declined to raise taxes on the wealthy this year, THE CITY though she did inject $1.5 billion in additional state funding to help chip away at what was once a projected $12 billion two-year hole.
The Tax Base Contradiction Nobody Is Talking About
Here’s the part nobody in City Hall seems eager to discuss out loud.
Mamdani needs property tax revenue desperately. But his signature housing policy — COPA — is designed to systematically move buildings from private, taxable ownership into the hands of nonprofits and community land trusts. Under New York State law, Section 420-a of the Real Property Tax Law is unambiguous: real property owned by a corporation or association organized or conducted exclusively for charitable purposes and used exclusively for carrying out those purposes is wholly exempt from taxation. New York State Senate Community land trusts providing affordable housing fit comfortably within that definition — and once they acquire a building and apply for exemption, the city loses that property’s tax contribution potentially forever.
Every building that moves through the COPA process from private to nonprofit ownership leaves the taxable property roll. The more COPA succeeds, the smaller the property tax base becomes. The smaller the base, the higher the rate must go to generate the same revenue. The higher the rate goes, the more pressure on remaining private landlords to sell — routing more buildings back to nonprofits, removing them from the rolls again. It’s a fiscal feedback loop, and the administration has not publicly addressed it.
Now Meet the Unsuspecting Homeowner — And the ADU Trap
Here is where the story gets genuinely alarming for tens of thousands of ordinary New Yorkers who have no idea they may be walking into it.
In December 2024, the city enacted Local Laws 126 and 127 alongside the sweeping “City of Yes for Housing Opportunity” zoning reform — a package designed to encourage homeowners to add Accessory Dwelling Units, or ADUs, to their properties. Convert your basement, finish your attic, build a backyard cottage, and generate rental income while helping the housing crisis. New York State’s Plus One ADU grant program offers up to $125,000 per homeowner for design, permitting, and construction. Dwelly In 2024, over 2,800 building owners filled out a voluntary city survey expressing interest in constructing an ADU on their property. New York City The city is marketing this aggressively. The grants are real. The appeal is obvious.
What many of those homeowners don’t fully understand is the reclassification that follows. A two-family building that adds an attic, basement, cellar, or attached ADU is treated as a three-family building subject to the NYS Multiple Dwelling Law. New York City Most homeowners can accept that trade-off going in, even if imperfectly understood.
What they may not be calculating is what happens to their COPA exposure as unit counts creep upward. COPA applies to Class A multiple dwellings with four or more dwelling units, though owner-occupied properties with five or fewer units are expressly excluded. Cole Schotz That owner-occupancy exemption sounds protective — until the owner moves, retires, or passes the building to heirs who don’t live there. The moment they’re no longer primary residents, a four-unit property built with their own hands becomes a “covered property” under COPA. Before they can sell to fund their retirement, they must run the full COPA process — notify HPD, wait out the nonprofit review period, potentially have their sale delayed by months, and absorb the uncertainty that depresses both the price and available financing.
Local Law 126 adds another wrinkle. That law created a legalization pathway for basement and cellar apartments that have been occupied unlawfully for years. Many owners of two- or three-family homes in Queens, Brooklyn, and the Bronx have exactly these kinds of undocumented units. The city is now actively encouraging them to legalize. The legalization program establishes a 10-year compliance process with milestones and safety upgrades. Dwelly What it also does is formalize a unit count that may not have previously appeared on city records — potentially pushing a property across the COPA threshold at the very next sale, without the owner ever being warned.
Of the 565,400 total single- and two-family lots in the city, an estimated 68,000 are currently eligible to add an ADU under existing rules. Regional Plan Association
| Navigating NYC’s New ADU Rules: Progress and Persistent ChallengesRegional Plan Association works toward a better future for the tri-state region |
That’s a significant pool of families being actively recruited — through generous grants and streamlined permits — into a regulatory reclassification that could quietly compromise their exit options and ownership rights without anyone clearly spelling it out.