Committee advances bill to eliminate New York City shelter‑rent tax for Mitchell‑Lama developments amid oversight questions

The Senate committee moved forward with Senate Bill 5662A on March 18, 2026, a measure from Senator Kavanaugh that would eliminate the shelter‑rent tax in New York City and authorize localities elsewhere in the state to take similar action.

Chair Senator Brian Chavanagh described the proposal as consistent with broader affordability aims, saying the change is “a very minor amount relative to the city's overall budget” but committed to providing the precise fiscal figures requested by members.

Committee members asked whether the tax cut would translate into lower tenant rents and raised concerns about municipal revenue impacts. One member warned that action that “deprives the city of revenue” could complicate city fiscal stability; the chair said he would provide specific numbers to address that concern.

Members also discussed oversight of Mitchell‑Lama cooperatives, noting that many co‑ops are governed by resident‑elected boards and that public dollars have been used to support some developments. Chair Chavanagh said audits by the city controller and supervision split between HCR and city agencies mean the committee should maintain oversight expectations when taxpayer funds are involved.

The transcript records the committee moving to report the bill to the floor after discussion; it also records named dissent or reservation from some members (as entered in the hearing record). The transcript does not include a full roll‑call tally for the item; the committee chair indicated staff would provide the city fiscal impact numbers on request.