New York mayor-elect Zohran Mamdani has sent a clear warning to private equity firms by appointing former Federal Trade Commission chair Lina Khan to his transition team, experts reveal. The move signals a potential crackdown on firms accused of driving up rents and creating healthcare monopolies through aggressive acquisition strategies.
A Symbolic Appointment with Real Consequences
According to Martin Kenney, distinguished professor at the University of California, Davis and author of Private Equity and the Demise of the Local, Khan's appointment serves as a direct warning to New York's private equity sector. While her role on the transition team primarily involves advising on municipal cabinet operations, Kenney believes her presence sends an unmistakable message.
"She started to do those investigations at the FTC of these kinds of roll ups. So for private equity, that meant that they couldn't just waltz in and buy up all of these various medical practices," Kenney explained during the press conference at the Unisphere in Queens on 5 November 2025.
The Private Equity Playbook: Roll Ups and Rent Hikes
Private equity firms across the United States have increasingly employed a strategy known as "roll ups" – acquiring multiple small local businesses and consolidating them into larger entities. This practice grants substantial market power, enabling simultaneous price increases and quality reductions.
The impact has been particularly severe in healthcare, where private equity involvement has been linked to worse health outcomes, including increased mortality rates. Khan, during her tenure as FTC chair under President Biden, pioneered aggressive action against this practice at the national level.
Kenney highlighted the real estate sector as another area of concern: "Mobile home parks, which used to be run by a lot of independent owners, private equity would come into a region and buy up all the mobile home parks, then raise all the rents."
New York's Private Equity Battleground
In New York City, private equity firms have employed controversial tactics to circumvent rent control regulations. Sugar Hill Capital Partners stands accused of allowing buildings to deteriorate through problems like rat infestations, making conditions unbearable for tenants in rent-controlled units to encourage them to leave.
"They made it a hellhole for the tenants. They played all sorts of shitty little tricks on them, and they eventually moved," Kenney stated, noting that Mamdani's campaign heavily focused on affordable rent, making Khan's appointment particularly significant for private equity landlords.
Loren Adler, associate director and fellow at the Brookings Institution's Center on Health Policy, confirmed that Khan's FTC work included "trying to shine sunlight on private equity firms buying up a bunch of small practices and combining them into a larger entity."
Municipal Power and Future Implications
While both experts acknowledge that municipal authority has limitations, Adler identified several ways Mamdani could challenge private equity-backed health companies in New York. "It's pretty easy to force transparency at the municipal level," he noted, pointing to facility approvals and land use permits as potential leverage points.
Adler also suggested strengthening New York City's already robust public hospital system and resisting contracts with private equity firms for services like ambulance provision and medical devices. "New York also already has one of the most robust public hospital systems. There's already a good jumping off point," he added.
Although Khan experienced some setbacks during her FTC tenure, including losing a complaint against US Anesthesia Partners and its private equity owners in Texas, her investigations created significant caution within the industry. "Once you get the FTC investigating, you become more careful," Kenney observed.
The appointment places Khan directly in Wall Street's backyard, potentially heralding a new era of scrutiny for private equity practices that have drawn criticism for their impact on housing affordability and healthcare quality in New York and beyond.
