New York Law Review

Tag: Low-Income Housing

  • Matter of Adult Home at Erie Sta., Inc. v Assessor & Bd., 6 N.Y.3d 212 (2005): Property Tax Exemption for Charitable Purposes

    Matter of Adult Home at Erie Sta., Inc. v Assessor & Bd. of Assessment Review of City of Middletown, 6 N.Y.3d 212 (2005)

    Property used primarily to provide housing and care to low-income individuals qualifies for a real property tax exemption under RPTL 420-a(1)(a), even if fair market rent is collected, provided the property serves a charitable purpose and benefits the residents.

    Summary

    This case addresses whether two property owners, AHESI and RECAP, qualify for real property tax exemptions under New York Real Property Tax Law § 420-a(1)(a) as charitable organizations. AHESI operates an adult home for long-term residential care, accepting residents who pay reduced rates based on their limited income and assets. RECAP provides transitional housing to participants in its social work programs aimed at combating homelessness and substance abuse. The Court of Appeals held that both AHESI and RECAP were entitled to tax exemptions because their properties were used exclusively for charitable purposes, benefiting low-income individuals and furthering social welfare goals, respectively.

    Facts

    AHESI operated an adult home, providing long-term residential care. Only about 10% of its residents paid market rates. Over half were eligible for Supplemental Security Income (SSI), and about 30-40% were “contract occupants” paying reduced fees determined by their assets and income. AHESI never turned away a resident due to inability to pay the market rate.

    RECAP is a social work organization that owned homes where participants in its “Community Re-Entry Program” lived temporarily. RECAP received rent comparable to market rates, paid partly by government agencies and partly by the tenants.

    Procedural History

    The City of Middletown denied both AHESI’s and RECAP’s applications for property tax exemptions. AHESI sought judicial review under Article 7 of the Real Property Tax Law, with the Supreme Court initially ruling against them, a decision reversed by the Appellate Division. RECAP filed a CPLR Article 78 proceeding, which was denied by the Supreme Court and affirmed by the Appellate Division. The Court of Appeals granted leave to appeal in both cases.

    Issue(s)

    1. Whether AHESI’s property is “used exclusively” for charitable purposes, thereby entitling it to a real property tax exemption under RPTL 420-a(1)(a), when it provides housing to the elderly, some of whom pay below-market rates based on their limited income and assets.

    2. Whether RECAP’s properties are “used exclusively” for charitable purposes, thereby entitling it to a real property tax exemption under RPTL 420-a(1)(a), when it provides transitional housing to participants in its social work programs, even though it receives market rents.

    Holding

    1. Yes, because AHESI provides housing to poor people at below-market rates, which is a charitable purpose.

    2. Yes, because providing housing to participants in social work programs is “reasonably incident” to RECAP’s charitable goals of helping them overcome their struggles, regardless of whether market rents are received.

    Court’s Reasoning

    The Court reasoned that AHESI’s provision of housing to individuals with limited assets and income, who would otherwise be unable to afford care, constituted a charitable purpose, distinguishing it from cases where housing was provided to non-impoverished individuals at market rates. The court explicitly rejected the argument that only SSI recipients could be considered poor enough to be objects of charity, noting that AHESI required contract occupants to contribute nearly all their assets and income towards their care, leaving them with minimal resources.

    Regarding RECAP, the Court distinguished its activities from mere rental housing, emphasizing that the housing was an integral part of RECAP’s social work programs, providing a supportive environment for individuals overcoming homelessness, addiction, and other challenges. Drawing an analogy to Matter of St. Luke’s Hosp. v Boyland, the Court held that the residential use of RECAP’s property was “reasonably incident” to its charitable purposes. The Court stated, “The issue is not whether RECAP benefits, but whether the property is ‘used exclusively’ for RECAP’s charitable purposes.” It further clarified that receiving fair market value for the properties does not negate the charitable use, as the apartments are provided solely to program participants. The court explicitly disapproved of Matter of Nassau County Hispanic Found. (Board of Assessors), which held otherwise.

  • Asian Americans for Equality v. Koch, 72 N.Y.2d 121 (1988): Upholding Zoning Amendments and Incentive Zoning

    Asian Americans for Equality v. Koch, 72 N.Y.2d 121 (1988)

    A zoning amendment is valid if it is adopted for a legitimate governmental purpose, bears a reasonable relationship to achieving that purpose, and accords with a well-considered plan for the development of the community, even if it does not guarantee specific outcomes such as low-income housing in a particular area.

    Summary

    Asian Americans for Equality challenged a New York City zoning amendment creating the Special Manhattan Bridge District in Chinatown, arguing it would displace low-income residents. The New York Court of Appeals upheld the amendment, finding it was enacted pursuant to a well-considered plan, and that the city has no obligation to zone specific areas for low-income housing. The court distinguished this case from exclusionary zoning cases, emphasizing that New York City, unlike suburban communities in those cases, already provides a variety of housing opportunities. The court deferred to the city’s legislative decision to use incentive zoning to address the housing needs in Chinatown.

    Facts

    Plaintiffs, representing low-income residents and workers in Chinatown, challenged a 1981 amendment to the New York City Zoning Resolution that created the Special Manhattan Bridge District. The amendment aimed to improve housing conditions by encouraging new residential construction, rehabilitating existing structures, and expanding community facilities. It allowed developers to increase building density in exchange for providing community facilities, low-income housing units, or rehabilitating substandard housing. A developer, Henry Street Partners, obtained a permit to build mixed-income housing on vacant land, contributing $500,000 to low-income housing.

    Procedural History

    Plaintiffs filed suit, alleging the amendment was unconstitutional for not being enacted pursuant to a well-considered plan and seeking a mandatory injunction to compel the city to create a zoning plan mandating low-income housing construction. The Appellate Division dismissed the complaint. The plaintiffs appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether the Special Manhattan Bridge District amendment was enacted pursuant to a well-considered plan, as required by zoning law.
    2. Whether the City of New York has a legal obligation to zone specific areas for low-income housing, such that its failure to do so in the Special Manhattan Bridge District constitutes exclusionary zoning.

    Holding

    1. No, because the amendment was preceded by a study, considered the city’s overall zoning policies, and was reasonably related to the legitimate goal of developing and rehabilitating housing in Chinatown.
    2. No, because New York City is not engaging in exclusionary zoning by not mandating low-income housing in every district, as the City as a whole provides a variety of housing opportunities.

    Court’s Reasoning

    The Court of Appeals held that the amendment was part of a well-considered plan, noting that the entire city of New York is zoned and that the amendment was based on a study of the Manhattan Bridge area. The court emphasized that a “well-considered plan need not be contained in a single document; indeed, it need not be written at all.” The court found the legislation reasonably related to its goals: the development of needed housing and the rehabilitation of existing housing in one area of Chinatown. The court distinguished this case from exclusionary zoning cases like Berenson v. Town of New Castle, which involved suburban communities excluding low- or moderate-income housing. The court stated, “Constitutional principles are not necessarily offended if one or several uses are not included in a particular area or district of the community as long as adequate provision is made to accommodate the needs of the community and the region generally”. The court reasoned that requiring particular uses in every district would be “obnoxious to the City’s over-all development”. The court declined to extend the Berenson rule to the 14-block area, noting that New York City, unlike the suburban towns in Berenson, has already made extensive allowance for a variety of housing opportunities. The court acknowledged the plaintiffs’ concerns about displacement and gentrification, but concluded that the City’s attempt to use incentive zoning was a valid approach to providing realistic housing opportunities, including new apartments for the poor.

  • Suffolk Housing Services v. Town of Brookhaven, 70 N.Y.2d 122 (1987): Judicial Deference to Zoning Implementation Absent Proof of Exclusion

    Suffolk Housing Services v. Town of Brookhaven, 70 N.Y.2d 122 (1987)

    A court will not invalidate a town’s zoning ordinance implementation based on a failure to provide low-cost housing unless there is proof that the town’s actions, rather than external economic factors, caused the housing shortage.

    Summary

    Suffolk Housing Services sued the Town of Brookhaven, claiming the town’s zoning ordinance, as implemented, discouraged the development of low-cost housing. The plaintiffs argued the town’s special permit requirements for multifamily dwellings and failure to pre-map areas for such housing inflated costs and faced community opposition, effectively excluding low-income residents. The lower courts upheld the ordinance. The New York Court of Appeals affirmed, holding that the plaintiffs failed to prove the town’s actions caused the housing shortage, as developer reluctance due to economic factors was a significant contributing factor. The court declined to undertake legislative rezoning, emphasizing the judiciary’s limited role in land use decisions.

    Facts

    Plaintiffs alleged a critical need for low-cost, multifamily rental housing in the Town of Brookhaven. The Town’s zoning ordinance required developers to obtain a special permit to construct any housing other than single-family dwellings. Developers could apply for permission to “cluster” developments in single-family residential districts or apply for rezoning to multifamily districts. Plaintiffs claimed the Town’s failure to “pre-map” vacant land for multifamily housing inflated costs and led to project failures due to community opposition. They asserted the Town actively discouraged low-income housing through its implementation of the ordinance.

    Procedural History

    Plaintiffs initially sued in a lower court, seeking to invalidate the Town of Brookhaven’s zoning ordinance and compel affirmative action to address the perceived housing shortage. The lower court ruled in favor of the Town, upholding the validity of the zoning ordinance. The Appellate Division affirmed this decision. The plaintiffs then appealed to the New York Court of Appeals.

    Issue(s)

    Whether the Town of Brookhaven’s implementation of its zoning ordinance illegally excluded low-income housing development, justifying judicial intervention to rezone the town.

    Holding

    No, because the plaintiffs failed to demonstrate that the town’s actions, rather than external economic factors, caused the claimed shortage of low-cost housing.

    Court’s Reasoning

    The Court of Appeals emphasized that a town’s zoning power is derived from the state and must promote the community’s health, safety, morals, or general welfare. While municipalities cannot use zoning to effectuate socioeconomic or racial discrimination, the court’s review is limited by affirmed factual findings. Both lower courts found that numerous developer applications for multifamily and subsidized housing were approved despite the special permit procedures. The court highlighted the affirmed findings that a significant reason for inadequate development was the lack of willing developers due to rising construction and financing costs and economic stagnation. The court stated, “Plaintiffs, in sum, have failed to demonstrate that efforts by the Town caused the claimed shortage of shelter.” The court distinguished this case from Berenson v. Town of New Castle, where the facial validity of a zoning ordinance was challenged. Here, the challenge was to the implementation, and the plaintiffs failed to provide sufficient proof of exclusionary practices. The court declined to undertake legislative rezoning, stating, “Zoning…is an essentially legislative task, and it is therefore anomalous that courts should be required to perform the tasks of a regional planner”. The court emphasized the need for a particularized claim directed at a specific parcel of land, plan, or project for housing. The court noted the abstract character of the case and the relief sought, while reaffirming that the decision “should not be read as revealing hostility to breaking down even unconstitutional zoning barriers that frustrate the deep human yearning of low-income and minority groups for decent housing they can afford in decent surroundings”.