BILL NUMBER: S5662A
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 eliminate the shelter rent tax for Mitchell-Lama devel-
opments and for mutual redevelopment companies established under Article
V of the Private Housing Finance Law in New York City and authorize
localities other than New York City to eliminate or reduce the shelter
rent tax for applicable developments to below ten percent 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 eliminate the shelter rent tax
that currently applies to Mitchell-Lama developments in New York City
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 2 of the bill amends paragraph (c) of subdivision 1 of section
33 of the Private Housing Finance Law to eliminate the shelter rent tax
that currently applies to Mitchell-Lama developments in New York City
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 3 of the bill amends paragraph (d) of subdivision 1 of section
33 of the Private Housing Finance Law to eliminate the shelter rent tax
that currently applies to Mitchell-Lama developments in New York City
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 eliminate the shelter rent tax that currently
applies to Mitchell-Lama developments in New York City 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 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.
Section 6 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 which are operated similar to Mitchell-Lama
housing experience similar affordability and operation struggles.
This bill would eliminate an onerous tax on Mitchell-Lamas and mutual
redevelopment companies in New York City, creating parity with other
types of affordable housing projects, which are often exempt from taxes,
to support their affordability and ongoing operating costs. This bill
would also authorize localities other than New York City to eliminate or
reduce this tax burden for Mitchell-Lama developments located in other
parts of the state.
 
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 redevelopment 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