N.J. Supreme Court Ends Teaneck’s Bid To Tax Non-Profit

The state Supreme Court ruled Wednesday that a Hackensack non-profit does not have to pay property taxes, bringing to end a legal effort by Teaneck and eight other towns to deny a tax exemption for the agency.

The court ruled that 14 properties in Bergen County run by Advance Housing are exempt from property taxes because they serve “charitable purposes” in line with state statutes.

“Advance Housing’s provision of housing with integrated supportive services to mentally disabled citizens, who otherwise would be dependent on government relief, is in furtherance of this State’s express policy,” Justice Barry T. Albin wrote in the court’s unanimous opinion. “The property -- purchased, in large measure, at public expense -- serves a vital need that would otherwise be borne by the State at a much greater cost.”

Advance Housing owed more than a million dollars in property taxes to Teaneck, Little Ferry, Bergenfield, Lodi, Ramsey, Leonia, Ridgefield Park, Hackensack and Fairview, The Record reported. It was not immediately clear how much revenue Teaneck could have collected from the agency.

The towns brought a case in 2004, arguing Advance’s housing and support programs were separate, and residents were not required to use the services. State Tax Court backed the municipalities in refusing the non-profit exemption.  

“Advance Housing was running ‘essentially a subsidized housing program for clients who happen to be eligible for [its] supportive and counseling services,” according to a summary of the Tax Court’s ruling.

A minority of Advance’s clients who received counseling and support services also lived in the agency’s housing, the Tax Court ruled.

In 2011, the state Appeals Court reversed the ruling and found Advance was eligible to be free from property taxes.

Advocacy groups hailed the high court’s decision as a victory for supportive housing and mental health programs across the state.

“The tax exemption will allow people to stay in their home communities, supported by appropriate services but enabled to live independently,” Krystal Odell, board member of the New Jersey Supportive Housing Association, said in a statement.

The organization was one of nine advocacy groups to file a “friend of court” brief supporting Advance. 

Advance Housing President and Chief Executive Officer Mary Rossettini said the ruling would allow the organization to make further investments in its properties.

"Finally, after more than 10 years of litigation, Advance Housing has property tax exemptions for the properties we own," Rossettini said in a statement. “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."

An attorney who represented Fairview, however, cautioned the ruling had “a potential for unintended consequences...to shift the burden from the state and federal government to local government,” the Star-Ledger reported.