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Committee advances bill extending shelter-rent tax reduction to Article 5 cooperatives
Summary
The committee reported S 77 80 a, a bill to extend the shelter-rent tax reduction enacted in the budget to certain Article 5 cooperatives, bringing them under the same 5% tax treatment afforded to Mitchell-Lama developments in New York City and giving localities the option to adopt the lower rate.
The New York State Senate Committee on Housing, Construction and Community Development reported S 77 80 a, a measure described in the transcript as sponsored by Royalman Segal, which would amend the Private Housing Finance Law to extend a reduced shelter-rent tax treatment to specified Article 5 cooperative developments that are similar to Mitchell-Lama housing.
Committee members said the bill mirrors a provision included in the enacted budget that reduced the tax on shelter rent from 10% to 5% in New York City and authorized other localities to adopt the same reduced rate by local resolution. The sponsor and other senators explained that Article 5 cooperatives are limited-equity, subsidized developments that predate Mitchell-Lama and are supervised by housing agencies; by extending the budget change to those developments, the bill would make their tax treatment consistent with the budget provision.
Members asked whether Article 5 coops have affordability requirements and how the structure of the tax operates; staff and other senators explained that the shelter-rent tax is not a typical property tax but a payment structure that takes a portion of shelter rent revenue after allowable expense deductions. The transcript records that senators moved and seconded a motion to report the bill, and the committee chair announced the bill was reported; the excerpt contains no roll-call details or negative votes.
The committee did not specify a budgetary cost in the excerpt. Lawmakers characterized the change as conforming a small set of limited-equity cooperative developments to the budget treatment already enacted for similar affordable-housing stock.
