BILL NUMBER: S5662B
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the private housing finance law, in relation to author-
izing a reduction of taxes pursuant to shelter rent
 
PURPOSE:
This bill would authorize New York City to reduce or eliminate the shel-
ter rent tax for Mitchell-Lama developments, limited dividend housing
companies established under Article IV of the Private Housing Finance
Law, and mutual redevelopment companies established under Article V of
the Private Housing Finance Law. It would also clarify that localities
other than New York City may eliminate the shelter rent tax for applica-
ble developments through local legislative action.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends paragraph (a) of subdivision 1 of section
33 of the Private Housing Finance Law to authorize New York City to
reduce or eliminate the shelter rent tax that currently applies to Mitc-
hell-Lama developments in New York City through local legislative
action, and to provide that localities other than New York City may
eliminate the tax for Mitchell-Lama developments through local legisla-
tive action.
Section 2 of the bill amends paragraph (c) of subdivision 1 of section
33 of the Private Housing Finance Law to authorize New York City to
reduce or eliminate the shelter rent tax that currently applies to Mitc-
hell-Lama developments in New York City through local legislative
action, and to provide that localities other than New York City may
eliminate the tax for Mitchell-Lama developments through local legisla-
tive action.
Section 3 of the bill amends paragraph (d) of subdivision 1 of section
33 of the Private Housing Finance Law to authorize New York City to
reduce or eliminate the shelter rent tax that currently applies to Mitc-
hell-Lama developments in New York City through local legislative
action, and to provide that localities other than New York City may
eliminate or reduce the tax for Mitchell-Lama developments through local
legislative action.
Section 4 of the bill amends subdivision 4 of section 33 of the
Private Housing Finance Law to authorize New York City to reduce or
eliminate the shelter rent tax that currently applies to Mitchell-Lama
developments in New York City through local legislative action, and to
provide that localities other than New York City may eliminate or reduce
the tax for Mitchell-Lama developments through local legislative action.
Section 5 of the bill amends paragraph (a-4) of subdivision 1 of
section 125 of the Private Housing Finance Law to authorize New York
City to reduce or eliminate the shelter rent tax that currently applies
to mutual redevelopment companies established pursuant to Article V of
the Private Housing Finance Law in New York City through local legisla-
tive action.
Section 6 of the bill amends subdivision 8 of section 93 of the
Private Housing Finance Law to authorize New York City to reduce or
eliminate the shelter rent tax that currently applies to limited divi-
dend housing companies in New York City through local legislative
action, and to provide that localities other than New York City may
eliminate the tax for limited dividend housing companies through local
legislative action.
Section 7 of the bill sets forth the effective date.
 
JUSTIFICATION:
Mitchell-Lama housing provides affordable, stable homes for low- and
moderate-income New Yorkers, but many Mitchell-Lama developments are
struggling to maintain affordability while keeping up with capital and
operating costs. Similarly, limited-equity housing established as mutual
redevelopment companies and limited-dividend housing companies, operated
similarly to Mitchell-Lama housing, experience similar affordability and
operation struggles.
This bill would authorize localities statewide to take local action to
reduce or eliminate an onerous tax on Mitchell-Lamas, mutual redevelop-
ment companies, and limited dividend housing companies. This would
create parity with other types of affordable housing projects, which are
often exempt from taxes, to support the affordability and ongoing oper-
ating costs for the housing types covered under this bill.
 
LEGISLATIVE HISTORY:
This is a new bill.
S5662A is amended to incorporate language from S7780B of 2025
(Hoylman-Sigal; signed Ch. 430 of 2025) that reduced shelter rent tax
for mutual redevelopment companies to 5%, to include mutual redevelop-
ment companies in New York City in the proposal to eliminate shelter
rent tax.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S5662: 33 private housing finance law, 33(1) private housing finance law, 33(4) private housing finance law
S5662A: 33 private housing finance law, 33(1) private housing finance law, 33(4) private housing finance law, 125 private housing finance law, 125(1) private housing finance law
S5662B: 33 private housing finance law, 33(1) private housing finance law, 33(4) private housing finance law, 125 private housing finance law, 125(1) private housing finance law, 93 private housing finance law, 93(8) private housing finance law