New Jersey Supreme Court Upholds Property Tax Exemptions for Supportive Housing

TRENTON, N.J., Sept. 25, 2013 /PRNewswire/ -- In a unanimous decision today in Advance Housing v. Teaneck, the New Jersey Supreme Court upheld a property tax exemption for nonprofit providers of supportive housing.  Supportive housing providers, such as Advance Housing, offer permanent homes for people with mental illness or cognitive disabilities.  Residents are also offered – and almost invariably accept – a wide array of services, from crisis intervention to cooking classes, that help them to live in an integrated, community setting.  The Court held that supportive housing constitutes a charitable use of property and thus qualifies for a tax exemption.  This decision was welcomed by Advance Housing and a coalition of nonprofit supportive-housing providers and national and state organizations representing individuals with psychiatric disabilities and their families.

"Finally, after more than 10 years of litigation, Advance Housing has property tax exemptions for the properties we own," said Mary Rossettini, President and CEO of Advance Housing, Inc.  "This victory allows us to continue to invest in supportive housing as a best-practice model to serve the most vulnerable citizens in our communities in the most cost-effective way.  Supportive housing has been proven to reduce costs, and the model achieves this goal while also preserving the dignity and independence of people living with mental illness or cognitive disabilities."

Beginning in 2004 and continuing thereafter, various New Jersey municipalities refused tax exemptions to Advance Housing for its supportive housing units. The Tax Court upheld this refusal, but the Appellate Division reversed.  The Supreme Court affirmed the Appellate Division, holding that the combination of housing and services offered through this model serves an important public purpose that exempts the property from taxation.  

Joel Ellis, counsel for Advance Housing, said, "I am pleased that the Supreme Court recognized the importance of the supportive housing provided by Advance Housing, which allows adults with mental illness to live independently in their communities and at the same time relieves the government of the burden of providing the more costly housing and care associated with institutionalization, group homes, and hospitalization."

Lowenstein Sandler filed an amicus brief and argued the case on behalf of a wide array of organizations representing individuals with psychiatric disabilities, their families, and community service providers.  One of the amici is the Judge David L. Bazelon Center for Mental Health Law, whose mission is to protect and advance the rights of adults and children around the nation who have mental disabilities.  Jennifer Mathis, Deputy Director of the Bazelon Center, notes that the Court's ruling will lead to more integrated living for residents: "This decision should have the effect of expanding needed supportive housing and affording more people with psychiatric disabilities the opportunity to live the same kinds of lives as people without disabilities."

Other amici echoed these sentiments.  Joseph Young, Executive Director of Disability Rights New Jersey, said, "Expanding access to supportive housing is essential to establishing a comprehensive system of community services for persons living with mental illness.  This decision will be a big help in ensuring a system that provides safe housing and ready access to services."  Krystal Odell, board member of the New Jersey Supportive Housing Association, added: "The more than 100 organizational members of the Supportive Housing Association are thrilled with this decision.  The tax exemption will allow people to stay in their home communities, supported by appropriate services but enabled to live independently.  This was the right call."

On behalf of all the amici, Catherine Weiss, chair of the Center for the Public Interest at Lowenstein Sandler, applauded the Court, noting that "today's decision will benefit supportive housing programs across New Jersey and ensure the continued viability of a major mental health policy initiative."

Other amici included the Alliance for the Betterment of Citizens with Disabilities, the American Association of People with Disabilities, Mental Health America, the Mental Health Association in New Jersey, the National Alliance on Mental Illness, and the National Alliance on Mental Illness of New Jersey. 

SOURCE Lowenstein Sandler