Zohran Mamdani’s First Big Housing Test Is Already Here

After her husband died in 1996, Brunnie Lebron—now age 71—picked up her two daughters and moved into the third floor of a prewar building near West Harlem, right off St. Nicholas Avenue. The rent-stabilized building always had its problems, she said, but with enough income to pay for her own unit’s repairs, she got along fine. Then, in January 2005, ownership of the building was shuffled from one faceless limited liability corporation to another, and the problems began to snowball.

Lebron’s building was one of many captured in an aggressive buying spree: With the help of a private equity cash infusion, Pinnacle Group—an arm of Joel Wiener’s vast LLC network held under the umbrella of a British Virgin Islands entity—tripled its housing portfolio across New York’s boroughs between May 2004 and May 2006. Many, including Lebron’s, were “distressed” rent-stabilized buildings in Upper Manhattan and the Bronx, Brooklyn, and Queens. In short order, Pinnacle became one of the largest landlords in New York.

Pinnacle’s business strategy hinged on exploiting 1990s-era loopholes and incentives that permitted landlords, under New York state law, to remove apartments from stabilization and convert them into luxury condominiums. To allow this, however, tenants had to move out. So, across Pinnacle properties, roaches multiplied, elevators broke, and old plumbing turned water brown. Rain seeped through crumbling facades, mold bloomed on the walls, and ceilings collapsed, including Lebron’s. When enough tenants fled these uninhabitable conditions, Pinnacle could swoop back in, refurbish the property, and sell its newly minted condos at a profit.

Pinnacle became a notorious gentrifier; in 2017, Wiener became a billionaire. Even when tenants fought back through the years, sometimes even extracting victories in court, the landlord’s holdings were so vast that Pinnacle often appeared too big to fail. That is, until May of this year, when Pinnacle filed for bankruptcy.

Around the same time, Assemblyman Zohran Mamdani was in the midst of what was then seen as a long-shot bid for the New York City’s mayorship. But Mamdani’s bet came in—and the job of cleaning up Pinnacle’s mess will be among the rewards. He won’t be facing it alone: A boisterous tenants’ movement, forged in the Pinnacle properties and fueled by the same spirit that brought Mamdani to power, has already joined the fight.

The mess in question verges on the Augean. The bankruptcy case halted a foreclosure action brought by Flagstar Bank—which is, itself, a product of a reorganizing 2024 bankruptcy—claiming that Pinnacle owes $564 million in mortgage debt. Instead of paying its mortgages, Pinnacle’s money was, according to court documents, funneled to Israeli bondholders who had floated Pinnacle more than $500 million to finance the group’s real estate expansions in the 2010s.

Now 93 buildings and approximately 5,000 rent-stabilized apartments across four boroughs are essentially up for grabs: While Pinnacle solicits offers to refinance, the bankruptcy proceedings have led to an auction where large landlords—including Pinnacle itself—will likely place bids. The deadline to submit bids is this Friday, December 12, but the actual auction will be held on January 8, according to court documents.

Absent from the courtroom drama is a voice for Pinnacle’s thousands of rent-stabilized tenants, who arguably are the most affected by the auction’s results: Will their next landlord be someone like Joel Wiener? Someone worse? While financial entities appraise tenants’ deteriorated homes from on high, the tenants themselves are barred from seeking legal recourse against Pinnacle by the court’s automatic stay on further lawsuits until the case is complete. They may submit letters to the judge detailing their conditions under Pinnacle, but there’s no guaranteeing whether the judge will even allow them. Bankruptcy court, needless to say, is not housing court; their only choice has been to organize a pressure campaign for the city to intervene, and fast.

Tenants have established the Union of Pinnacle Tenants, or UPT, informed by more than a decade of organizing experience via the Crown Heights Tenant Union, influenced, however obliquely, by the unique successes of tenant unions in Los Angeles and Kansas City, and mobilizing at a pace not seen since the height of the pandemic, when everyone intuitively understood the rent crisis demanded a radical response. This is New York’s first portfolio-wide union in recent memory, and surely the first to be built at such dizzying scale: In a matter of months, 40 Pinnacle buildings across three boroughs have formed tenant associations and joined the union to coordinate their demands.

Rent-stabilized tenants were at the heart of Mamdani’s historic campaign for mayor; his promise to freeze their rent was his hallmark policy idea. It’d be too simplistic to say that Pinnacle tenants are rising up today because Mamdani won, but it is, on some level, the same energy he tapped into with his campaign that is now motivating tenants to become their own protagonists.

For weeks, UPT has actively reached out to current and future city officials to grow support for its demands. On November 25, 22 New York representatives, including Councilman Chi Ossé, Assemblymembers Claire Valdez and Julia Salazar, and New York City Comptroller Brad Lander, signed an open letter to the bankruptcy judge to “grant the tenants a say in the auction process.” To date, Mamdani has not signed onto the letter, despite UPT members’ calls for him to do so. Nor did his office respond to The New Republic’s multiple requests for comment. But this hasn’t fazed them. “Old age is a bitch, let me tell you,” Lebron said last time we spoke, “but that doesn’t mean I’m going to give up.”

Pinnacle’s restructuring advisers have blamed three concurrent problems for their insolvency: inflation, interest rates, and, in so many words, tenants. While inflation has undoubtedly increased operating costs, and Pinnacle’s mortgage rates leapt from 3 percent to as much as 10.25 percent, according to court documents, it’s the third item on its list of grievances that the financial press has glommed onto: the 2019 Housing Stability and Tenant Protection Act, or HSTPA, which closed many of the loopholes Pinnacle and others relied on to thrust rent-stabilized units into the speculative market. Tenant groups were the leading force behind the law, and it did, indeed, make life for landlords harder. But only because their business strategy depended on evicting longtime working-class tenants, through increasing property values and soaring rents, which, in turn, permitted further speculation through risky refinancing.

This is what researchers have called “pulling out equity.” In a 2022 report titled “Gambling With Homes, or Investing in Communities,” the Local Initiative Support Corporation, or LISC, outlined how this works. Let’s say a landlord purchases a $1 million building with a $750,000 loan. When the property’s appraised value increases, due partly to the landlord increasing the rent, the study shows that the landlord would more than likely use that new leverage at the bank for an even bigger loan, this time to purchase a $3 million building. The landlord—call them a “housing provider”—is a market genius so long as they continue buying up properties, at the expense of their other buildings, in which they rarely reinvest. But when the rulebook catches up, the market shifts, and—as Julia Duranti-Martinez, senior program officer at LISC, put it—“your assumptions about rent increases don’t hold anymore,” suddenly those loans aren’t such a masterful gambit. Now, they’re just “really bad bets.”

In an emailed statement to The New Republic, a Pinnacle spokesperson said it was “unfortunate that some seek to exploit the already difficult situation facing multi-family housing in New York to advance a political ideology that ignores the rapid rise in maintenance, insurance and other costs which have stressed housing across the city regardless of ownership.” Between 2019 and 2024, Bloomberg—not exactly The Daily Worker—found that “immediately hazardous” housing violations had increased fourfold in Pinnacle buildings, twice the rate of similar rent-stabilized properties. More than that, buildings located in gentrifying neighborhoods saw the “sharpest increases” in housing violations.

Pinnacle’s spokesperson said the Bloomberg report “seems exaggerated” and “doesn’t take into account the across-the-board impacts of documented changes in the law and a post-Covid surge in enforcement.”

Critically, the Pinnacle properties on the auction block are, in fact, profitable. Last year, they generated some $27 million after net operating costs, according to court documents, indicating that the buildings themselves aren’t the central problem. While housing violations have recently increased across the five boroughs, Pinnacle’s long history of neglect has made it a household name among tenant organizers.

In late 2023, Zara Cadoux invited several fellow Crown Heights Tenant Union, or CHTU, members into her home for a meeting of the group’s Palestine solidarity committee. The plan was to discuss how they might connect New York tenants’ struggles to the U.S. financial institutions supporting Israeli occupation. Esteban Girón, one of CHTU’s earliest members and an oral historian of sorts, looked around the living room and said, “Well, you’re sitting in it.”

Cadoux had, months prior, moved into the building, a Pinnacle property since 2006, but CHTU and Pinnacle had met before, going as far back as the group’s 2013 founding. In 2018, 24 Pinnacle buildings in Crown Heights banded together through CHTU to protest poor conditions, but that “fizzled out,” Girón told me, after a schism formed between CHTU and another nonprofit supporting the tenants.

It wasn’t then top of mind that Pinnacle was among the first New York real estate firms to turn to the Tel Aviv Stock Exchange for financing, but soon, CHTU’s Palestine committee discovered at least five of Pinnacle’s major Israeli bondholders also funded construction projects supporting settler occupation in the West Bank and the Golan Heights—meaning, when Pinnacle deferred payments to Flagstar, tenants’ rent was often funneling toward financial entities investing in the Israeli military-industrial complex. (Regarding its Israeli bondholders, Pinnacle declined to comment.)

When Pinnacle residents received notice that their landlord had filed for bankruptcy, “people freaked out,” Cadoux said. “They didn’t know what this meant, if they’d be forced to leave,” which would have played directly into the notorious rent-stabilized converters’ strategy. CHTU saw “a real need to respond as quickly as we could,” but before the group had fully formed a plan to cobble together a borough-to-borough union, tenants beat them to it. In September, at a planned protest over electricity shutoffs at Cadoux’s building, tenants from Lebron’s West Harlem building appeared, asking how they could get involved. “We had been losing steam,” said Vivian Kuo, Lebron’s neighbor and a leader in the building, but “knowing there were other buildings that were organized—more organized than us—gave me more wind for my sails so I could keep going.” Today, she and others in her building are on rent strike.

Tenant activity in the United States tends to ebb and flow with crisis. It’s no accident that CHTU came to life shortly after the 2008 housing bubble, as veterans of Occupy Wall Street sought to flesh out the movement’s idea for neighborhood councils. Other tenant groups, such as Housing Justice for All, partly owe their success to CHTU—Cea Weaver, now part of Zohran Mamdani’s housing transition team, was a founding CHTU member and is now director of HJ4A. But CHTU’s presence was shrinking and required restructuring as it came back to life during the pandemic, when tenants again sought to channel their demands through a grassroots movement.

Since then, forming a citywide tenant union from the bottom up has remained a distant goal among the city’s disparate tenant groups. There are significant challenges ahead, not least because for a group like UPT that ties its identity to a landlord in the middle of restructuring, with no way to know who the landlord will be this time next year, it is difficult to predict the future needs and proclivities of its tenant membership across three boroughs. What happens if they aren’t “Pinnacle tenants” anymore? The goal is to ensure whoever purchases the buildings will have to go through these newly activated tenant associations, but constructing tenant associations at such a rapid pace—“building the airplane while we’re flying it,” as Cadoux said—could also create capacity bottlenecks and burnout from the often thankless work of organizing at the building level.

However, as tenant organizer and New Republic contributor Tracy Rosenthal—who, 10 years ago, slapped $20 on the table to become the “first dues-paying member” of the citywide Los Angeles Tenant Union—contended at a recent Pinnacle tenant assembly, with every “crisis” also comes “opportunity.” The tenant union is at once a response to Pinnacle’s mismanagement and an experiment for what comes next. Tenants are meeting the moment; their organizations will have to work to do so too.

In the 1970s, New York tenants successfully argued that their “sweat equity” entitled them to expropriate the buildings they’d refurbished from the landlords who’d allowed them to fester. More recently, when Signature Bank declared bankruptcy in 2024, the city’s Department of Housing Preservation and Development, or HPD, oversaw a merger (creating Flagstar, the plaintiff in Pinnacle’s case) and partnered with a private financier to place thousands of rent-stabilized homes in a public land bank. UPT is now asking for a similar deal. In an email to The New Republic, Pinnacle warned against the nonprofit housing model, calling it “no panacea” and referred to inflationary operational costs that are today challenging nonprofit owners, adding that Pinnacle “brings decades of experience to their management.” (HPD could not be reached for comment.)

But if the speedy rise of UPT signifies anything, it’s that Pinnacle’s residents are ready for a different ownership structure. And they’re not alone. Arielle Hersh, policy director for the Urban Homesteading Assistance Board, said her organization has seen an influx of tenants whose landlords are now going through foreclosure—upward of two buildings per week since January—and are seeking UHAB’s advice for structuring different ownership models for their buildings. Hersch also pointed me to a 2011 Joint Center for Housing of Harvard study, which had warned of the sheer “magnitude” of mortgage loans—more than a quarter of the market at the time—set to “mature sometime after 2020.” “This is a growing issue,” Hersh added. “We’re at the beginning of something that is yet to peak.”

The Pinnacle bankruptcy offers tenants the opportunity to wrest more control over their living conditions; it also offers the incoming Mamdani administration a chance to demonstrate its support for the tenant movement that ushered him into office. Mamdani’s office did not respond to The New Republic’s multiple requests for comment. But when asked, Cadoux wasn’t worried. “My neighbor across the hall is on his transition team,” she said, referring to Manvir Singh, a member of Mamdani’s “kitchen Cabinet.” “So they definitely know about us, and about Pinnacle.”

At a rally outside the Eastern District of New York courthouse one chilly November evening, I saw tenants from Flatbush to Harlem, Midtown to Crown Heights, crowd around a projector broadcasting crowdsourced photos of all manner of indignities: mushrooms growing out of tenants’ ceilings, roaches the size of Medjool dates. To insulate herself as best she could from her landlord, Brunnie Lebron had purchased all of her apartment’s appliances shortly before retiring, but it hadn’t worked. “I want to keep this apartment, for my daughters’ sake, for my sake, and for the rest of the tenants’ sake,” she said. As for Pinnacle, “They can go to hell.”