Governor Kathy Hochul has signed new legislation that enables New York City to provide tax relief for residents of Penn South, a cooperative housing development. This measure allows the city to pass local tax cuts specifically for Penn South, which is the only remaining Article V co-op property in the city. The move follows the Governor’s Fiscal Year 2026 (FY26) Budget initiative that automatically halved taxes for Mitchell-Lama households in New York City.
The tax reduction is projected to save Mitchell-Lama residents up to $50 million each year. The FY26 Budget also gave local governments the authority to extend 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,” 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 newly signed legislation (A8651A/S7780B) gives New York City the ability to offer targeted tax benefits to Penn South as it faces increasing operational costs. Supporters say this will help maintain building quality and affordability for current and future residents at a time when affordable housing remains scarce.
Ahmed Tigani, Acting Commissioner of the New York City Department of Housing Preservation & Development, commented on the importance of supporting affordable housing: “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 rising operating costs have threatened long-term affordability at properties like Penn South: “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 highlighted her efforts as Chair of the Assembly Committee on Housing: “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 added: “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.”
Since taking office, Governor Hochul has advanced several policies aimed at improving affordability throughout New York State. The FY26 Budget includes a $4 billion Affordability Agenda with components such as a $2 billion Inflation Refund program providing payments up to $400 per person; further reductions in middle-class income tax rates; expansion of child tax credits; and universal free school meals.
