The Community Opportunity to Purchase Act (COPA), reintroduced as Int. No. 905-A (COPA 2.0” or “Int. 0905-2026) is the most ambitious municipal intervention into private real property disposition in New York City’s history. COPA 2.0 replicates COPA’s structured real property sale process whereby owners of most multifamily buildings are mandated to first notify the New York City Department of Housing Preservation and Development (HPD), and then offer a right of first offer and a right of first refusal (ROFR) to HPD-certified “qualified entities” before an owner can sell their property on the open market. Like COPA, COPA 2.0’s stated purpose is to preserve affordability, prevent displacement, and stabilize distressed assets. Naturally, the legislation continues to spark considerable debate over its constitutional soundness.
[Author’s Note: On Jan. 26, 2026, less than one week after the authors published their New York Law Journal article entitled “Can COPA Pass Constitutional Muster?,” Mayor Mamdani’s Law Department raised serious constitutional concerns over COPA and three days later, the New York City Council vetoed COPA, scuttling the legislation.]
Key Provisions of COPA 2.0
COPA 2.0 applies to Class A multiple dwellings with four or more dwelling units that meet defined criteria for physical distress at the time of sale including, being subject to: HPD’s alternative enforcement program for at least one year; an in rem foreclosure action as a distressed property; an order to correct underlying conditions for at least one year; annual daily average building violations equal to or greater than three; denial of a certification of no harassment within the preceding year; a building of no more than 100 units subject to an affordability restriction set to expire within two years; or meeting any other criteria as HPD may establish by rule.
An owner intending to sell a covered property must first provide notice to HPD and to all qualified entities listed on HPD’s website. Following that notice, qualified entities have 20 calendar days to submit a statement of interest in exercising a right of first offer to purchase the covered property. Within five calendar days of receiving a statement of interest, the owner must provide detailed financial and operational information about the property, including the current rent roll, income and expense reports, outstanding mortgage information, open violations, pending legal actions, findings of tenant harassment, pricing terms of any open offer to purchase the property, and any other information HPD may require.
Qualified entities that submit a statement of interest thereafter have 70 calendar days from the end of the statement-of-interest period to submit a bona fide offer to purchase the covered property. During this period, the owner may not take any action to sell the property to a person other than a qualified entity.
If the owner rejects all qualified entity offers and later receives a third-party offer (an “offer subject to match”) that the owner intends to accept within one year, the first qualified entity that submitted a bona fide offer to purchase has a 15-day ROFR to match the third-party offer at the identical price, terms, and conditions. After a qualified entity exercises its ROFR, the owner is compelled to proceed with the sale, and the qualified entity is compelled to buy.
COPA 2.0 imposes substantial civil penalties for noncompliance: an owner who sells a covered property without submitting the required notice of intent to sell is subject to a civil penalty of up to 15 percent of the sale price. The law also creates a private right of action allowing any qualified entity to sue a noncompliant owner, with the prevailing qualified entity entitled to injunctive and declaratory relief plus costs and reasonable attorneys’ and expert witness fees. HPD is vested with full rulemaking authority to define qualifying criteria, administer the registry of qualified entities, and enforce compliance.
Comparative Analysis: COPA (Int. 902-A) vs. COPA 2.0 (Int. 905-A)
COPA 2.0 contains several material modifications from COPA though the structural nucleus of the legislation remains unchanged.
First, COPA 2.0 minimally compresses the statutory timelines. The statement-of-interest window has only been reduced from 25 days to 20 calendar days, and the right-of-first-offer period has merely been shortened from 80 days to 70 calendar days. This de minimis reduction appears designed to address one of the vetoed version’s principal constitutional vulnerabilities: the attendant procedural delays imposition of excessive burdens on property owners by extending the holding period, thereby increasing carrying costs.
Whether the reduction of approximately 15 days in total meaningfully mitigates this concern is questionable. The total process under COPA 2.0—subject to further discretionary extensions by HPD—from first notice through the end of the ROFR matching period, can still extend well beyond 100 days, during which the owner is prohibited from freely selling their property to a ready, willing, and able third party buyer.
COPA 2.0 also modifies the extension mechanism for the right-of-first-offer period. Under COPA, the Commissioner could extend the 80-day window “for good cause shown.” Under COPA 2.0, extensions of more than five calendar days require a written application from the qualified entity, including an explanation of need, and the Commissioner may not grant more than one prior extension for the same qualified entity.
While this limitation introduces a modest procedural constraint on HPD’s discretion, it does not eliminate it, and, at the same time, potentially opens the door for an even longer period beyond 80 days, exclusive of other discretionary extensions requiring owners to provide additional financial and operational details concerning the subject property.
Additionally, COPA 2.0 expands the applicability criteria to include triggers such as buildings with a violation annual daily average of three or more. COPA did not include the specific violation daily average threshold, and thus COPA 2.0’s expansion broadens the universe of covered properties.
While these changes reflect an effort to tighten procedural constraints and narrow certain definitions, they do not fundamentally alter COPA’s core mechanism: the mandatory imposition of an ROFR on private property owners in favor of government-designated private parties. It is this mechanism that raises the most serious constitutional concerns.
Constitutional Analysis: Forced Alienation and Compelled Sale
Takings Clause: Fifth Amendment Framework
The central constitutional question presented by COPA 2.0 is whether its mandatory ROFR mechanism—mandating property owners to hold their property available for purchase by government-preferred buyers and restricting their ability to sell on the free market—constitutes a taking of private property without just compensation in violation of the Fifth Amendment, as applied to New York through the Fourteenth Amendment of the US Constitution.
The analysis begins with the foundational distinction between per se physical takings and regulatory takings. Per se takings have historically been found where the government mandates physical access or occupation by third parties. In Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the Supreme Court of the United States (SCOTUS) held that a New York statute requiring landlords to permit the installation of cable television equipment constituted a per se taking, regardless of the trivial economic loss involved.
In Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021), SCOTUS held that a California regulation granting union organizers access to agricultural property constituted a per se physical taking, emphasizing that the right to exclude is “one of the most essential sticks in the bundle of rights that are commonly characterized as property.”
Opponents of COPA 2.0 will indeed argue that it commandeers a distinct “stick in the owner’s bundle of rights”—the right to freely dispose of their sui generis property—by unilaterally vesting an ROFR-like prerogative in third parties without compensation. Challengers may analogize COPA 2.0 to the exaction cases—Nollan v. California Coastal Commission, 483 U.S. 825 (1987), Dolan v. City of Tigard, 512 U.S. 374 (1994), and Sheetz v. County of El Dorado, 601 U.S. 267 (2024), and argue that conditioning a sale on granting an ROFR delays a sale without any consideration.
However, the per se takings argument faces significant obstacles, as COPA 2.0 does not mandate physical access to or occupation of the owner’s property. It does not compel the owner to transfer title; the owner retains full title, can ultimately refuse nonprofit offers at the end of the ROFR window, and can consummate sales at market price to any purchaser if the statutory preference is not exercised, nor does it require acceptance of below-market bids or impose any price controls.
As such, COPA 2.0 will be assessed under the Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), regulatory takings framework, which considers: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action.
On the first factor, COPA 2.0’s economic impact is limited: the delay is time-bounded (approximately 100-plus days), and the owner retains the right to ultimately sell at market price. However, owners will argue that the delay generates substantial economic harm through carrying costs such as mortgage payments, insurance, title liability, possible lost sales, and loss of maximum profits due to market fluctuations, and that COPA’s chilling effects on bidding competition depress property values well before the formal process even begins.
On the third factor, COPA 2.0’s character as a targeted, procedural intervention designed to advance affordable housing preservation weighs in the government’s favor, particularly given the fact that New York City has one of the lowest home ownership rates in the country.
New York Constitutional Property Protections and Restraints on Alienation
New York’s own constitutional protections and longstanding property law doctrines may provide an independent—and potentially more potent—basis for challenging COPA 2.0 than the federal Takings Clause.
New York has long maintained a strong public policy favoring the free alienability of real property, codified in N.Y. Real Property Law §471. As the Court of Appeals explained in Metropolitan Transportation Authority v. Bruken Realty Corp., 67 N.Y.2d 156 (1986), the common-law rule against unreasonable restraints on alienation condemns the “effective prohibition against transferability itself.” The reasonableness of any restraint must be judged by three factors: its duration, the designated method for fixing the purchase price, and its purpose.
In Bruken Realty, the Court of Appeals upheld a preemptive right to purchase property, reasoning that the restriction promoted the use and development of the property while imposing “only a minor impediment to free transferability.” The court observed that “a preemptive right, however, usually will not be unlawful when conditioned on payment of market value or a sum equal to a third-party offer.” COPA 2.0’s matching-right mechanism satisfies this price-reasonableness criterion.
However, the Bruken Realty court’s analysis was limited to a bilateral commercial arrangement; it did not address the distinct concerns raised by a blanket government mandate imposing ROFR rights on an entire class of property owners in favor of government-designated third parties.
In Keystone Assoc. v. State of New York, 19 N.Y.2d 78 (1966), the Court of Appeals confronted a statute that prohibited the owner of an opera house from demolishing its building in order to give a private corporation time to gather funds to acquire and preserve the structure.
The court concluded that the statute, which merely delayed the owner’s exercise of its property rights for the benefit of a designated private party, amounted to a “condemnation statute” and constituted an appropriation of private property without just compensation. The analogy to COPA 2.0 is striking: like the Keystone statute, COPA 2.0 holds property in abeyance for the benefit of designated private entities, restricting the owners’ right to dispose of the property on a timeline of the owner’s choosing while offering no compensation for the corresponding economic harm.
In Seawall Associates v. City of New York, 74 N.Y.2d 92 (1989), the Court of Appeals struck down a local law that required owners of single-room-occupancy properties to rehabilitate vacant units, accept tenants, or pay substantial fees. The court held that the law’s “heavy exactions” did not “substantially advance” the putative purpose of relieving homelessness, finding only a “tenuous connection between means and ends.”
The court emphasized that where a regulation forces “some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,” a taking occurs. Like COPA 2.0, the challenged law imposed targeted obligations on a defined class of property owners—in service of a broad public welfare objective—without compensation and without a demonstrated direct nexus between the burden imposed and the social problem to be remedied.
The fundamental tension in COPA 2.0’s restraints-on-alienation framework lies in the disjunction between the legislation’s laudable public purpose and the doctrinal requirements governing the enforceability of restrictions on alienation under New York law. While New York courts generally uphold reasonable ROFRs in private contracts, particularly where co-owners voluntarily submit to community governance structures such as in cooperative and condominium buildings, blanket government-mandated ROFRs have never been imposed on private-to-private transactions on this magnitude and thus traverse fundamentally different legal terrain.
Arguments for and Against Constitutionality
The strongest arguments in favor of constitutionality are that COPA 2.0 is a targeted, procedural intervention at the point of sale for a specified class of multifamily buildings. It does not compel physical occupation or dictate sub-market conveyances, with owners retaining the right to command market price and to consummate sales with private buyers if qualified entities cannot meet the terms. New York City has long exercised robust municipal regulation of housing conditions, preservation, and tenant protection within the police power.
Washington, D.C.’s Tenant Opportunity to Purchase Act (TOPA)—which affords tenants an early opportunity to acquire their buildings—has been administered for decades withstanding constitutional scrutiny and providing significant precedential support, similar to San Francisco’s COPA corollary. Under established takings jurisprudence, COPA 2.0 is best assessed under the Penn Central framework, where its limited economic impact, congruence with reasonable expectations in a heavily regulated housing sphere, and public-minded character tip the scales in favor of constitutionality.
However, the strongest arguments against constitutionality are compelling. Owners will argue that COPA 2.0 is an unlawful restraint on the alienation of their real property, as it impedes their ability to transfer their property on their desired timeline, causing them substantial economic harm without any entitlement to receive just compensation. They will argue that COPA 2.0 effectively appropriates a discrete property interest (the ROFR) and thereby effects a per se taking.
Challengers will underscore policy experience in jurisdictions like D.C., arguing that ROFR schemes slow sales, deter investment, amplify holding costs, and inherently reduce property values. Contracts Clause arguments will emphasize that even short windows can be outcome-determinative in tight real estate markets, thereby imposing significant impairments on owners’ preexisting autonomy to negotiate and consummate sales with buyers of their own choosing.
Conclusion
COPA 2.0 illustrates the competing interests of housing affordability versus the constitutional protection of private property rights. The legislation seeks to harness the disposition process itself as a tool for community stabilization, channeling market transactions through a government-administered preference system. This is a novel and untested approach under New York law.
What distinguishes COPA 2.0 from prior exercises of New York City’s regulatory authority over housing is not merely the burden it imposes but the nature of the interest that it creates. The legislation does not regulate the use of property, nor does it impose conditions on development or occupancy. Rather, it interposes a government-designated class of preferred purchasers into what has always been a private transactional relationship, effectively restructuring the market for covered properties.
Whether courts will view this as a permissible extension of the police power—analogous to tenant-protection measures that have long been upheld—or as a qualitatively different intervention that crosses permissible constitutional lines remains an open question.
The precedential landscape offers no clear resolution. The Penn Central framework, under which COPA 2.0 will most likely be evaluated, is inherently fact-intensive, and its application here will turn on the empirical record regarding actual economic harm to covered property owners.
At the same time, decisions like Keystone Associates and Seawall Associates by the New York Court of Appeals suggest a judicial skepticism toward legislative schemes that conscript individual property owners into bearing the costs of broadly shared social objectives, a characterization that COPA 2.0’s challengers will surely advance.
Practitioners advising owners of covered properties, prospective purchasers, and qualified entities alike should proceed with the expectation that COPA 2.0, if enacted, will face immediate legal challenge. The legislation’s constitutionality will hinge on whether the city can demonstrate a sufficiently direct relationship between COPA 2.0’s burdens and its affordability objectives, and whether the economic costs imposed on property owners rise to the level of an impermissible taking without adequate compensation under a federal lens, or, an unreasonable restraint on the alienation of real property under a state lens.
"COPA: Act Two" by Massimo F. D'Angelo and William M. Pekarsky was published in the New York Law Journal on June 11, 2026.
Reprinted with permission from the June 11, 2026, edition of the New York Law Journal © 2026 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.