Governor Kathy Hochul signed a bill letting New York City grant local tax relief to Penn South, the last Article V co-op, complementing her FY26 Budget move that cut shelter-rent taxes for NYC Mitchell-Lama households by at least half—savings estimated at up to $50 million a year citywide. The new law enables similar local relief outside NYC and could cut Penn South’s shelter-rent tax from 10% to 5%, saving up to $2 million annually. The state has invested nearly $500 million to preserve Mitchell-Lamas, helping rehab 24,000 units and adding new funds in FY25 and FY26, to keep homes affordable for nearly 100,000 middle-class New Yorkers.
Governor Kathy Hochul today signed legislation to initiate tax cuts for Penn South residents. This action permits New York City to pass local tax relief for Penn South. The legislation signed today builds on the Governor’s FY26 Budget win, which automatically reduced taxes in half for New York City Mitchell-Lama households. This action is estimated to save Mitchell-Lama residents in New York City up to $50 million annually. The Budget also authorized local governments to offer similar tax relief to Mitchell-Lama developments outside New York City.
“With inflation driving up the cost of housing across the United States, my administration is cutting taxes in half for Mitchell-Lama residents in New York City, keeping money in the pockets of nearly 100,000 hardworking households,” Governor Hochul. “Since I took office, the state has invested nearly $500 million in Mitchell Lamas statewide to preserve more affordable housing for middle class New Yorkers.”
Legislation (A8651A/S7780B) would authorize New York City to provide tax relief to Penn South, the only remaining Article V co-op property. Penn South faces rising operational costs, which threaten to impact building quality and future affordability for its residents. There is an acute shortage of affordable housing and this legislation will help to preserve the long term health of what already exists.
The legislation signed today continues Governor Hochul’s actions to extend relief to Mitchell-Lamas and their residents. The Governor’s FY26 Budget action provided a deeper shelter rent tax abatement benefit that reduced Mitchell-Lama shelter rent taxes by at least 50 percent in New York City and allowed for the same by local opt-in in the rest of the state. The Governor’s Enacted FY25 Budget further sought to ban discriminatory practices for affordable housing, including Mitchell-Lamas, in insurance premiums.
With rising costs, Governor Hochul is ensuring that state-supervised Mitchell-Lama properties are well positioned to make critical investments. Under Governor Hochul’s leadership, nearly $500 million has been allocated by the state and Legislature to assist Mitchell-Lama units statewide. HCR has helped rehabilitate 24,000 Mitchell-Lama units, investing more than $265 million to date to preserve this important supply of affordable housing. An additional $80 million was appropriated by the State in the FY25 Enacted Budget for the Mitchell-Lama Preservation Program, and the FY26 Budget included $140 million in new State funding to support improvements to Mitchell-Lamas, $110 million for New York City.
“With inflation driving up the cost of housing across the United States, my administration is cutting taxes in half for Mitchell-Lama residents in New York City, keeping money in the pockets of nearly 100,000 hardworking households.”
Governor Kathy Hochul
New York City Department of Housing Preservation & Development Acting Commissioner Ahmed Tigani said, “This is what it looks like when we stand up for the New Yorkers who built and sustain this city. Whether it’s funding urgent capital repairs or signing up older New Yorkers to tools that keep rent costs stable, this Administration and HPD has been steadfast in our mission to support and preserve our Mitchell-Lama housing stock. Thanks to the leadership of the Governor and State legislature we have additional ways to strengthen that commitment, reinvest into this critical housing, and deepen our help and impact. When we protect affordable housing, we’re protecting the ability of individuals and families to stay and thrive in the neighborhoods they call home.”
State Senator Brad Hoylman-Sigal said, “Affordable housing developments in New York City are facing rising operating costs, which have threatened the long-term viability for these developments to remain affordable. In the FY2026 Budget we took steps to protect the affordability of Mitchell Lama buildings but, unfortunately, Article V co-ops, like Penn South, were excluded, despite traditionally being treated similarly under the law as Mitchell Lamas. That’s why Assemblymember Simone and I fought to pass separate legislation to cut the shelter rent tax burden for Article V co-ops in half – from 10% to 5% – giving them the same tax relief recently afforded to Mitchell Lamas. Our bill saves Penn South up to $2 million annually to help this storied limited equity coop remain an oasis of affordability in a sea of rising rents across Manhattan. I’m grateful to Senate Majority Leader Andrea Stewart-Cousins for making this bill a priority during the legislative session and to Governor Hochul for signing it into law today.”
Assemblymember Linda B. Rosenthal said, “Building and preserving affordable housing go hand-in-hand during an affordability crisis. That’s why I was incredibly proud as Chair of the Assembly Committee on Housing to push for an agreement in last year’s budget that reduced the shelter rent tax for Mitchell-Lama developments across New York City and the state. The signing of today’s legislation – extending that very benefit to Penn South, a remarkable affordable coop community – builds on those crucial efforts by preserving this bastion of affordability for current and future generations. I commend Governor Hochul, the bill sponsors and the many advocates who made today’s effort a reality. I will continue fighting for common-sense measures that preserve and increase affordability for all New Yorkers in the next legislative session.”
Assemblymember Tony Simone said, “An affordability agenda starts at home. As New York continues to take bold steps in confronting the housing affordability crisis by spurring the construction of new housing, we must ensure that existing affordability is preserved. I’m proud to have passed this bill for the residents of Penn South and grateful for Governor Hochul’s strong support in both its passage and signing into law.”
New York City Council Member Erik Bottcher said, “Penn South is a cornerstone of affordability in our community, and today’s action ensures it will remain so for generations to come. I thank Governor Hochul for her leadership in protecting Mitchell-Lama residents, and I’m deeply grateful to Senator Hoylman-Sigal and Assembly Member Tony Simone for their tireless work in passing this critical legislation at the state level. Preserving Penn South is not just about protecting apartments — it’s about protecting a way of life for thousands of hardworking New Yorkers who deserve stability and peace of mind in their homes.”
Governor’s Affordability Agenda
Since taking office, Governor Hochul has remained steadfast on making the state more affordable for New Yorkers. The Governor’s FY26 Budget includes a $4 billion Affordability Agenda comprised of:
- A $2B Inflation Refund program, delivering up to $400 to more than 8.2 million New Yorkers.
- A middle-class tax cut, the second of Governor Hochul’s tenure, which brings the tax rate for middle-class individuals and families down to their lowest levels in nearly 70 years.
- An expansion of the Empire Child Tax Credit, raising the credit amount up to $1,000 per child.
- Universal free school meals, saving parents and families up to $1,600 a year.
Sources: Governor.ny.gov , Big New York news BigNY.com
