Governor Kathy Hochul has signed legislation enabling New York City to offer tax relief to residents of Penn South, a co-op community in Manhattan. This move allows the city to pass local tax cuts for Penn South and builds on previous measures that reduced taxes for Mitchell-Lama households in New York City.
The recently enacted law is expected to save Mitchell-Lama residents up to $50 million each year. The Governor’s FY26 Budget had already provided an automatic 50 percent reduction in shelter rent taxes for these households and authorized local governments outside New York City to offer similar relief.
“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,” said 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.”
The new legislation (A8651A/S7780B) specifically allows New York City to grant tax relief to Penn South, which is currently the only remaining Article V co-op property. Rising operational costs have threatened both building quality and long-term affordability at Penn South. Officials say this measure will help protect existing affordable housing stock amid ongoing shortages.
New York City Department of Housing Preservation & Development Acting Commissioner Ahmed Tigani commented, “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 noted that while steps were taken in the FY2026 Budget to protect affordability for Mitchell Lama buildings, Article V co-ops like Penn South were not initially included: “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 emphasized that preserving affordable housing remains crucial during periods of high living costs: “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 added: “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 also spoke about maintaining stability: “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.”
Under Governor Hochul’s administration since taking office, nearly $500 million has been allocated with assistance from HCR toward rehabilitating over 24,000 units within Mitchell-Lama properties statewide; more than $265 million has been invested so far toward preservation efforts.
Additional funding includes $80 million appropriated through last year’s budget cycle as part of preservation programs targeting these developments; another $140 million was included within this year’s budget—with $110 million earmarked specifically for projects located within New York City.
The broader Affordability Agenda under Governor Hochul’s FY26 Budget totals $4 billion with initiatives such as:
– A $2 billion Inflation Refund program providing payments up to $400 for over 8 million residents,
– A second round middle-class tax cut lowering rates further,
– Expansion of the Empire Child Tax Credit up to $1,000 per child,
– Universal free school meals aimed at reducing family expenses by as much as $1,600 annually.
