Adult Home, Transitional Housing Exempt from Property Tax

Two property owners in the City of Middletown claimed that their buildings were used for charitable purposes and were therefore exempt from real property taxes. The city disagreed and assessed both. New York's highest court ruled for the property owners. In the first case, Adult Home at Erie Station, Inc. (AHESI) operated an adult home. This was an adult care facility providing long-term residential care, room, board, housekeeping, personal care, and supervision to five or more adults. The home had a rate schedule, but only about 10 percent of its residents paid market rates. More than half of the residents received Social Security Income to cover their care. Another 30 percent paid reduced rates. The city argued that the home wasn't operated exclusively for charitable purposes because not all those who paid less than market rates were poor enough to make AHESI's activities charitable. But AHESI required these residents to pay all of their assets in excess of $2,000, and required them to pay all of their income with the exception of a $50 allowance for incidentals and another allowance for medical expenses. In the second case, Regional Community Action Program, Inc. (RECAP) engaged in social work, helping homeless people, alcoholics, and drug addicts become productive citizens. The city argued that most of RECAP's social work was done outside the property. But the residential use of RECAP's property was reasonably incidental to its charitable purpose. While the rent was paid by contributions, the transitional housing was occupied by the people who received RECAP's services.

Adult Home at Erie Station, Inc. v. Assessor of City of Middletown; Regional Economic Community Action Program, Inc. v. Bernaski: NYLJ, 3/14/08, p. 27, col. 5 (Ct. App.; Smith, J, Kaye, CJ, Ciparick, Graffeo, Read, Pigott, Jones, JJ)