## Facts

- Association for Neighborhood Rehabilitation, Inc. (ANR) is a New York not-for-profit whose mission is to provide housing to individuals and families at high risk of homelessness, including disabled or mentally infirm persons, people with substance-use disorders, domestic-violence victims, and low-income individuals.
- ANR acquired and renovated multiple residential properties in the City of Ogdensburg and rented units pursuant to eligibility criteria and requirements associated with governmental housing and social-service programs.
- In many units, tenants who could not pay full rent received subsidies; as a result, ANR often collected amounts at or near regional market rent.
- Some properties offered supportive services (e.g., counseling or case-management) that were not mandatory for all tenants.
- The City’s assessors denied ANR’s applications for tax exemptions for 11 properties under Real Property Tax Law (RPTL) § 420-a.
- ANR filed 10 RPTL article 7 proceedings; it withdrew one claim involving a vacant lot.
- After a nonjury trial, Supreme Court granted exemptions for eight properties; the municipality appealed as to seven of those properties.

## Issues

1. Whether the seven challenged ANR properties were “used exclusively” (interpreted as “used principally”) for charitable purposes under RPTL § 420-a.
2. Whether collecting rent (including subsidized receipts approximating market rent) and operating properties with some optional supportive services defeats an exemption for charitable use.
3. Whether the evidence supported Supreme Court’s factual finding that the primary use of the properties furthered ANR’s homelessness-prevention mission.

## Decision

- The Appellate Division affirmed the judgment insofar as appealed from.
- The court held that ANR met its burden to show the seven properties were principally used for charitable purposes within RPTL § 420-a.
- The court rejected the municipality’s argument that rent levels, leases, or non-mandatory services converted the properties into ordinary commercial rentals.
- The seven properties remained exempt from real-property taxation.

## Legal Principles

- The party seeking a real-property-tax exemption bears the burden of proof, and exemption statutes are strictly construed, but not so narrowly as to defeat their settled purpose.
- Under RPTL § 420-a, “used exclusively” is construed to mean “used principally”; incidental noncharitable or revenue-producing aspects do not defeat exemption if subordinate to the charitable objective.
- Receipt of rent, including amounts supported by government subsidies that may approximate market levels, does not by itself negate charitable use when the primary use is providing housing to qualifying at-risk populations.
- Supportive services need not be mandatory for every tenant if the housing is part of an overall charitable program aimed at preventing homelessness and serving vulnerable groups.
- Appellate review respects trial court fact-finding after a nonjury trial when supported by the record.

## Conclusion

The court upheld tax-exempt status for seven nonprofit-owned supportive-housing properties, concluding their primary use furthered a charitable homelessness-prevention mission under RPTL § 420-a, despite rental income, subsidy structures, and optional services.


Ass’n for Neighborhood Rehab., Inc. v. Bd. of Assessors of City of Ogdensburg, 81 A.D.3d 1214 (3d Dep’t 2011)