CAMDEN COUNTY COUNCIL ON ECONOMIC OPPORTUNITY, INC. v. CITY OF CAMDEN

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF
                   THE TAX COURT COMMITTEE ON OPINIONS

___________________________________
CAMDEN COUNTY COUNCIL               )               TAX COURT OF NEW JERSEY
ON ECONOMIC OPPORTUNITY, INC., )                    DOCKET NO. 011115-2008
                                    )               DOCKET NO. 014496-2010
                  Plaintiff,        )               DOCKET NO. 014508-2010
                                    )               DOCKET NO. 012170-2013
            v.                      )               DOCKET NO. 012500-2014
                                    )               DOCKET NO. 011004-2015
CITY OF CAMDEN,                     )               DOCKET NO. 011145-2016
                                    )               DOCKET NO. 008348-2017
                  Defendant.        )               DOCKET NO. 008361-2018
___________________________________ )


                              Decided: April 18, 2019

                              Albert M. Belmont, III, Esq. (Bochetto & Lentz, PC,
                              attorneys) for plaintiff

                              Michelle Banks-Spearman, City Attorney,
                              City of Camden for defendant

DeALMEIDA, J.T.C. (t/a)

       This is the court's opinion on the parties’ cross-motions for summary judgment in the

above-referenced matters challenging the denial of a local property tax exemption for an apartment

complex in Camden City (City) for tax years 2008 through 2010, and 2013 through 2018. For the

reasons explained more fully below, the court concludes that a portion of the property is exempt

from local property taxes pursuant to  N.J.S.A. 54:4-3.6, and a portion of the property is not. The

court, therefore, grants the taxing district's motion for summary judgment in part, and denies the

motion in part, and grants the property owner's cross-motion for summary judgment in part, and

denies the cross-motion in part. Further proceedings are necessary to determine the percentage of

the property that qualifies for the exemption for each tax year and to adjudicate the property

owner's challenge to the amount of the assessments on the property.
                                         I. Findings of Fact

       This opinion sets forth the court’s findings of fact and conclusions of law on the parties’

cross-motions for summary judgment. The court's findings of fact are based on the certifications

and exhibits submitted on the motions.

       In 1964, Congress enacted the Economic Opportunities Act of 1964, 42 U.S.C. §§ 2782 to

2797 (repealed 1981). The statute was designed to combat poverty in low-income communities,

including the City. The legislation authorized local public and private non-profit groups called

community service organizations to carry out community action programs created by the act.

       In 1966, plaintiff Camden County Council on Economic Opportunity, Inc. (CCCEO) was

incorporated under New Jersey law as a non-profit, community service organization in response

to the federal legislation. In a separate action concerning other parcels in the City owned by

CCCEO, the court determined that the organization was organized exclusively for charitable

purposes. The City admits the court's findings on that point are binding here. CCCEO's by-laws

provide that the organization will fulfill its mission by, among other things, "[e]nsuring that

Camden County residents gain and maintain accessibility to adequate sanitary and safe housing

[with] special emphasis on the construction and[/]or renovation of decent, affordable housing that

will increase housing ownership and rental opportunities for low- and moderate-income

families[.]" Approximately eighty percent of CCCEO’s funding comes from State and federal

grants. The remaining funding is obtained from private foundations and individuals.

       In 2002, CCCEO purchased an eighteen-building, 132-unit, garden-apartment complex,

the Sheridan Apartments, in the City for $1.05 million. The property is comprised of three parcels

designated by the municipal tax assessor as Block 445, Lot 1, Block 449, Lot 1, and Block 446,

Lot 3 (the subject property). For tax years 2008 through 2010, the assessor placed an aggregate




                                                 2
assessment of $1,200,000 on the three parcels. For tax years 2013 through 2018, the assessor

raised the aggregate assessment to $2,704,100. 1

       The court's findings of fact concern October 1, 2007, the operative date for tax year 2008.

CCCEO's use of the subject property has been relatively consistent since that time. The findings

of fact, therefore, will be determinative of the subject property's eligibility for an exemption for

each tax year at issue. As of October 1, 2007, twenty-five units at the subject property were used

for transitional housing for people who were homeless or leaving a shelter. CCCEO provided

tenants in those units supportive services, including mentoring, training, employment

opportunities, and healthcare. Tenants in transitional housing were required to attend the programs

and pay a fee equal to one third of their monthly income, but not more than $300, which served as

rent. These tenants remained in the program for up to eighteen months. Transitional housing units

were not concentrated in any building on the subject property. Nor were particular units reserved

for the program, which was also operated by CCCEO at other buildings it owns. The City concedes

that if the twenty-five units used for transitional housing were in a single building with no market

rate rental units, that building likely would qualify for an exemption.



1
  CCCEO intended to apply for low-income tax credits from the New Jersey Housing Mortgage
Finance Agency that it could sell to raise funds to renovate the subject property for rental to low-
income tenants. As part of the application process, CCCEO was required to enter into a payment
in lieu of tax (PILOT) agreement with the City. An agreement requiring a PILOT payment of
approximately $105,100 per year for the subject property was approved by the City's governing
body on June 13, 2002. A financial agreement pursuant to the Long Term Tax Exemption Law,
 N.J.S.A. 40A:20-1 to -22, was executed on the same day between Sheridan Urban Renewal
Associates, LP (Sheridan), of which CCCEO is a general partner, and the City, naming Sheridan
as the redeveloper of the subject property. In the matters before the court, the parties initially
disputed whether the financial agreement and PILOT agreement ever took effect and, if so, whether
they remain in effect. CCCEO subsequently informed the court that it does not claim an exemption
for the tax years in question based on the agreements. In light of that development, and because
this court lacks jurisdiction over any contractual dispute the parties may have with respect to the
PILOT and financial agreements, see McMahon v. City of Newark,  195 N.J. 526 (2008), the court
makes no findings of fact or conclusions of law regarding the agreements.


                                                   3
       The remaining 100 apartments were available to anyone to rent. There was no income-

related restriction on who may rent those units. Thus, there was no income cap in place.

Theoretically, a high-income tenant could rent a unit at the subject property. This was unlikely,

however, as it is not disputed that the subject property serves a low-income community.

       Tenants not in the transitional housing program were required to execute a written lease

and produce a security deposit of one month’s rent. Each rental unit was separately metered and

tenants were responsible for the cost of utilities. CCCEO notes that most tenants participated in

an energy assistance program that covered the cost of utilities with public funds. That program,

however, was available to any member of the public who qualified and was not funded by CCCEO.

Leases for the unrestricted units permitted CCCEO to evict tenants who did not pay rent. The

record contains no evidence of any eviction by CCCEO of a tenant from the subject property.

       There was no limit on the amount of rent that could be charged for an apartment not

occupied by a tenant in the transitional housing program. CCCEO’s October 2007 rent roll shows

rents ranging from $300 to $1,150. It is not clear if the $300 rents were for tenants in the

transitional housing program. The parties dispute whether the rents on the non-transitional units

were at or below market rates. The submissions from both parties on this point are largely

inadmissible hearsay. In addition, approximately ten Section 8 units were assigned to the subject

property and approximately six other units were occupied by tenants with portable Section 8

certificates. The City contends that the Section 8 program paid CCCEO market rents, although

the record contains insufficient proof or a legal citation to support that assertion. However, as will

be explained in more detail below, it is not necessary for the court to determine whether the subject

property garnered market rent on the units not being used for the transitional housing program.

The crucial fact, which is undisputed, is that the units not being used for the transitional housing




                                                  4
program were rented without regard to the tenant's income and without regulatory or self-imposed

restrictions on the rent CCCEO charged for those units.

       All tenants at the subject property were permitted to participate in various programs

operated by CCCEO, but were not required to do so. The organization operated an energy

assistance program, training and mentoring services, a matching funds program to assist

individuals in realizing the goal of homeownership, a community employment program, including

employment at the subject properties, homeownership counseling, and other services. CCCEO

did not maintain space at the subject property to offer these social and financial services, some of

which were provided at other properties owned by CCCEO. The programs were also open to

individuals who did not rent units at the subject property. On its 2008 federal 990 tax return,

CCCEO reported receiving $6,737,319 in government grants and $862,768 in “program service

revenue” from renting apartments at the subject property as its only revenue for that year.

       For each tax year at issue, CCCEO sought an exemption from local property taxes pursuant

to  N.J.S.A. 54:4-3.6, alleging that the subject property was used for charitable purposes. The

municipal tax assessor denied the exemption requests. In each tax year, CCCEO filed a petition

of appeal with the Camden County Board of Taxation challenging the assessor's denial of an

exemption, as well as the amount of the assessments placed on each parcel. In each tax year, the

county board issued judgments affirming the assessments. CCCEO filed timely complaints in this

court with respect to each tax year, alleging that the subject property qualifies for an exemption

and that the assessments on each parcel exceeds its true market value.

       The parties thereafter filed cross-motions for summary judgment with respect to the

exemption issue. CCCEO's challenge to the amount of the assessments on the subject property is

not addressed in the motions.




                                                 5
                                      II. Conclusions of Law

       Summary judgment should be granted where “the pleadings, depositions, answers to

interrogatories and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact challenged and that the moving party is entitled to a judgment

or order as a matter of law.” Rule 4:46-2 (c). In Brill v. Guardian Life Ins. Co.,  142 N.J. 520, 523

(1995), our Supreme Court established the standard for summary judgment as follows:

               [W]hen deciding a motion for summary judgment under Rule 4:46-
               2, the determination whether there exists a genuine issue with
               respect to a material fact challenged requires the motion judge to
               consider whether the competent evidential materials presented,
               when viewed in the light most favorable to the non-moving party in
               consideration of the applicable evidentiary standard, are sufficient
               to permit a rational factfinder to resolve the alleged disputed issue
               in favor of the non-moving party.

“The express import of the Brill decision was to 'encourage trial courts not to refrain from granting

summary judgment when the proper circumstances present themselves.’” Twp. of Howell v.

Monmouth Cty. Bd. of Taxation,  18 N.J. Tax 149, 153 (Tax 1999) (quoting Brill,  142 N.J. at 541).

       Because they represent a departure from the fundamental approach that all property owners

bear their fair share of the local property tax burden, “[t]ax exemption statutes are strictly

construed, and the burden of proving entitlement to an exemption is on the party seeking it.”

Abunda Life Church of Body, Mind & Spirit v. City of Asbury Park,  18 N.J. Tax 483, 485 (App.

Div. 1999) (citing N.J. Carpenters Apprentice Training and Educ. Fund v. Borough of Kenilworth,

 147 N.J. 171, 177-78 (1996); Princeton Univ. Press v. Borough of Princeton,  35 N.J. 209, 214

(1961)). “[A]ll doubts are resolved against those seeking the benefit of a statutory exemption[.]”

Borough of Chester v. World Challenge, Inc.,  14 N.J. Tax 20, 27 (Tax 1994) (quoting Twp. of

Teaneck v. Lutheran Bible Inst.,  20 N.J. 86, 90 (1955)). These standards, however, do “not justify




                                                 6
distorting the language or the legislative intent” of the exemption statute. Boys’ Club of Clifton,

Inc. v. Twp. of Jefferson,  72 N.J. 389, 398 (1977).

        N.J.S.A. 54:4-3.6 provides an exemption from local property taxation for

               all buildings actually used in the work of associations and
               corporations organized exclusively for . . . charitable purposes,
               provided that if any portion of a building used for that purpose. . . is
               otherwise used for purposes which are not themselves exempt from
               taxation, that portion shall be subject to taxation and the remaining
               portion shall be exempt from taxation, [as well as] the land whereon
               any of the buildings hereinbefore mentioned are erected, and which
               may be necessary for the fair enjoyment thereof, and which is
               devoted to the purposes above mentioned and to no other purpose
               and does not exceed five acres in extent . . . provided . . . the
               buildings, or the lands on which they stand, or the associations,
               corporations or institutions using and occupying them . . . are not
               conducted for profit, except that the exemption of the buildings and
               lands used for charitable . . . purposes shall extend to cases where
               the charitable . . . work therein carried on is supported partly by fees
               and charges received from or on behalf of beneficiaries using or
               occupying the buildings; provided the building is wholly controlled
               by and the entire income therefrom is used for said charitable . . .
               purposes[.]

In addition, the exemption applies only

               where the association, corporation or institution claiming the
               exemption owns the property in question and is incorporated or
               organized under the laws of this State and authorized to carry out
               the purposes on account of which the exemption is claimed[.]

               [N.J.S.A. 54:4-3.6.]

       The statutory criteria for a charitable exemption are properly summarized as follows. A

claimant must demonstrate that: (1) it owns the property; (2) it is organized exclusively for

charitable purposes and is authorized to conduct the activities for which the property is used; (3)

the property was actually used for the tax exempt purpose; and (4) the operation and use of the

property was not conducted for profit, although fees may be collected from or on behalf of the

beneficiaries of the charitable services, provided revenue from the fees are used to further the



                                                  7
organization’s charitable purposes. See Essex Props. Urban Renewal Assocs. v. City of Newark,

 20 N.J. Tax 360, 364 (Tax 2002).

        Three of the four factors are not contested here. CCCEO's ownership of the subject

property is undisputed.    In addition, as noted above, the City acknowledges that the court

previously found that CCCEO was organized exclusively for charitable purposes. There is no

dispute that CCCEO is authorized to conduct the activities for which it uses the subject property.

Finally, the City concedes that the subject property is not operated or used for profit. The sole

issue before the court is whether the subject property is actually used for charitable purposes.

        As the Supreme Court explained almost fifty years ago,

               [w]e have not previously had occasion to define “charitable
               purposes” as used in  N.J.S.A. 54:4-3.6. Courts of other states with
               similar statutes have defined “charitable purposes” as:

                       [A]n application of property for the benefit of an
                       indefinite number of persons, either by bringing their
                       hearts under the influence of education or religion,
                       by relieving their bodies from disease, suffering and
                       constraint, by assisting them to establish themselves
                       for life, or by erecting or maintaining public
                       buildings or works, or otherwise lessening the
                       burdens on government.

               [The Presbyterian Homes of the Synod of N.J. v. Div. of Tax
               Appeals,  55 N.J. 275, 284 (1970) (footnote and emphasis omitted)
               (second alternation in original) (quoting Coyne Elec. Sch. v.
               Paschen,  146 N.E.2d 73, 79 (Ill. 1957)).]

Adopting this definition, the Court held that “the term 'charity’ in a legal sense is a matter of

description rather than a precise definition.” Id. at 285. “Therefore, the determination of whether

property is devoted to a charitable purposes depends upon the facts or circumstances of each case.”

Ibid.




                                                 8
       More recently, the Court expanded on the factors to be considered when determining

whether a use of property is charitable:

               Although all relevant considerations cannot be captured by any list
               given the ever-changing scenarios that will arise, and although each
               consideration may not necessarily deserve the same weight, here are
               some [to be considered]: (1) the charitable work done by the private
               entity will spare the government an expense that ultimately it must
               bear; (2) the private entity must not be engaged in a seeming
               commercial enterprise; (3) the property must be used in a manner to
               further the charitable purpose; (4) the receipt of government
               subsidies or funds is not contraindicative of a charitable purpose; (5)
               financial support and recognition by the State of a private entity's
               charitable work may be indicative that its property is used for a
               charitable purpose; and (6) the private entity in carrying out its
               charitable mission through the use of its property is addressing an
               important and legitimate governmental concern[.]

               [Advance Hous., Inc. v. Twp. of Teaneck,  215 N.J. 549, 572-73
               (2013) (citations and quotation omitted).]

       CCCEO argues the subject property qualifies for an exemption because it is used to provide

housing to low-income residents, to whom the organization offers a panoply of services at the

subject property and at other properties CCCEO owns in the City. Those services are designed to

assist residents in obtaining homeownership and financial independence. CCCEO asserts that its

transitional housing program helps alleviate homelessness, which benefits the participants and

relieves government obligations. CCCEO points out that the subject property is viewed as a

residence of last resort and courts frequently order CCCEO to house individuals in emergent

situations, fulfilling a function that would otherwise be the State's responsibility. In addition,

CCCEO argues that the units not being used for transitional housing are rented to low-income

individuals, which addresses the public need to provide affordable housing.

       The City, on the other hand, argues that an exemption is not warranted because CCCEO

uses the subject property largely to operate a market-rate apartment complex in a low-income




                                                 9
market. While the City recognizes that twenty-five units at the subject property are used for

transitional housing for qualified tenants, it contends that the remaining apartments are rented in

the open rental market to any tenant regardless of income, need for services, or participation in

services. The City notes that approximately fifty percent of the units at the subject property were

occupied when CCCEO purchased the parcels from a commercial landlord in 2002, and that the

existing tenants were permitted to remain in their rent control apartments without any inquiry into

their income or obligation to participate in CCCEO services.

       The City argues that while it is admirable that CCCEO provides housing at low rates, the

organization is, in effect, competing with other landlords in Camden who provide housing in low-

income neighborhoods and whose properties are not exempt from local property taxes. According

to the City, a large number of its residents live below the federal poverty level and rent apartments

at the low end of the market because of a lack of resources. The City argues that because at least

100 apartments at the subject property are rented to tenants who may or may not participate in the

organization’s financial and social programs, and who are not subject to an income cap or other

income-based restrictions, CCCEO is no different than any other landlord with low-rent

apartments and its property does not qualify for an exemption.

       The Supreme Court's holding in Advance Housing guides this court's analysis. In that case,

the property owner provided rental "housing with integrated supportive services to mentally

disabled citizens, who otherwise would be dependent on government relief," at residences

purchased with federal, State and private funds. Id. at 553-54. Eligibility for housing was

established by federal and State regulations, requiring residents to "meet a statutory definition of

homelessness" or "come from a state hospital or a group home." Id. at 556. The tenants had

"experienced periods of institutionalization, psychiatric hospitalization, or homelessness or risk of




                                                 10
homelessness due to a psychiatric disability." Ibid. The property owner received market rent "as

determined by" the federal government, with residents paying thirty percent of their income as rent

and the balance coming from public funds. Ibid. The property owner retained the right to evict

for failure to pay rent, although there was no evidence that an eviction had ever been attempted.

Id. at 557.

        The property owner provided services to its tenants both at the properties under review and

at other properties. Among the services provided were counseling, vocational guidance, crisis

intervention, transportation, and assistance with all aspects of daily living. Id. at 558. If a tenant's

psychiatric condition warranted, the property owner could temporarily become the tenant's

representative payee for government benefits and take control of their finances for purposes of

paying rent and daily living expenses. Ibid. The property owner had forty-nine full- and part-time

employees, including caseworkers, nurses, psychiatrists, and mental-health professionals available

to provide services to tenants. Ibid. Staff members worked seven days a week and were available

on an on-call basis after working hours. Ibid.

        Every tenant was required to execute a written agreement and plan detailing the services

that the property owner would provide. Ibid. "The nature, degree, and duration of the services

depend[ed] on the needs of the individual client[,]" with some receiving services as much as seven

times a week. Ibid. The leases gave the property owner the right to terminate "if the client no

longer needs supportive and counseling services or if the services are inadequate to meet the

client's needs." Id. at 557. Both the federal and State governments prohibited the property owner

from requiring tenants to accept supportive services as a condition of residency because, from a

treatment perspective, "an unwilling participant is considered counterproductive to the goal of

developing independence and trust." Id. at 557-58.




                                                  11
        "[T]he cost of funding a psychiatrically disabled individual in a residence" at the properties

in question was "far less than the cost of institutionalizing that individual in a State facility." Id.

at 559. In addition, the housing and supportive services model employed at the properties was

consistent with recommendations in various government reports addressing a crisis in available

housing for people eligible for discharge from State hospitals, but unable to secure a place to live.

Ibid.

        The Tax Court denied an exemption because the property owner's provision of housing

was separate from its supportive services. Id. at 561. The court found that providing subsidized

housing is not, standing alone, a charitable use of property, but that an integrated program of

housing and supportive counseling would be an exempt use. Ibid. The court reasoned that because

tenants at the Advance Housing properties were not compelled to participate in the services offered

at the properties there was no charitable use. Ibid. The court relied, in effect, on the absence of

an institutional setting as the reason to deny an exemption. Ibid.

        The Supreme Court rejected this approach, concluding instead that the property owner's

"housing and supportive services are fully integrated – one dependent on the other for success –

so that its charitable purpose of facilitating the transition from dependent living to independent

living for individuals with mental illness is a practical goal." Id. at 576 (quotation omitted).

Because federal and State law prohibited the property owner from requiring tenants to participate

in services as a condition of residency, the Court held that the lack of such a requirement "does

not count against conferring tax-exempt status." Ibid. In addition, the Court found that the

property owner was "playing a role in fulfilling an articulated State policy of deinstitutionalizing

the mentally disabled" and "relieving the State of the expense that it would otherwise bear in

housing and caring for the mentally disabled." Id. at 574.




                                                  12
       The Court noted that its holding was consistent with a number of precedents. Id. at 576

(citing Cmty. Access Unlimited, Inc. v. City of Elizabeth,  21 N.J. Tax 604 (Tax 2003) (exemption

applies where property owner provides subsidized housing and services to individuals with mental

disabilities); Salt & Light Co. v. Twp. of Mt. Holly,  15 N.J. Tax 274 (Tax 1995) (exemption applies

where property owner provides temporary housing and counseling services to the homeless), aff'd

o.b.,  16 N.J. Tax 40 (App. Div. 1996); and Essex Props. Urban Renewal Assocs., Inc. v. City of

Newark,  20 N.J. Tax 360, 367-68 (Tax 2002) (exemption does not apply where "counseling and

support service is incidental to [the] main function, which is to rent apartments to elderly or

disabled persons")).

       Application of the holding in Advance Housing to the facts of this case leads to the

conclusion that CCCEO's use of a portion of the subject property for its transitional housing

program satisfies the statutory criteria for an exemption as a charitable use. The program provides

housing for tenants at risk of homelessness, some of whom are recently released from a shelter. In

addition, the courts direct individuals in need of emergent housing to the subject property. The

program participation fee is based on the tenant's income, and is capped at a low amount. CCCEO

provides a number of services to program participants designed to assist them in gaining financial

stability and permanent housing. These goals comport with CCCEO's charitable purpose and, to

the extent they are successful, relieve the State of the costs it would almost certainly incur as a

result of the tenants' return to homelessness.

       The City, in effect, concedes that the use of the subject property for transitional housing

satisfies the statutory requirements for an exemption. Although the City qualified its position by

stating that an exemption would likely apply only if the transitional units were in a single building

with no market rental units, the court finds this distinction to be legally insignificant. N.J.S.A.




                                                 13
54:4-3.6 expressly provides that a property may qualify for a partial exemption when it is put to

both charitable and non-charitable uses, provided the remaining statutory requirements are met.

Courts have directed that a parcel be treated as partially exempt and partially subject to tax. See

e.g., Phillipsburg Riverview Org., Inc. v. Town of Phillipsburg,  26 N.J. Tax 167 (Tax 2011)

(granting partial exemption for charitable use, while concluding that the remainder of the property

was not exempt), aff'd,  27 N.J. Tax 188 (App. Div. 2013). There is no statutory requirement that

a property owner must concentrate its charitable use in a particular structure or on a single parcel

to qualify for an exemption. Thus, CCCEO's use of available units, regardless of the building in

which they are located, for its transitional housing program does not defeat an exemption.

       The court agrees with the City, however, that the portions of the subject property not used

by CCCEO for its transitional housing program do not satisfy the statutory criteria for an

exemption. It is undisputed that when CCCEO purchased the subject property from a commercial

landlord a significant portion of the units were occupied by tenants who rented the units in the

commercial market. CCCEO allowed those tenants to remain. CCCEO did not undertake an

analysis of the income of those tenants, impose any income-based restrictions on their continued

occupancy, or alter their monthly rent to reflect their income. Those tenants were instead permitted

to continue with what was a tenancy on terms obtained in the marketplace prior to CCCEO's

purchase of the subject property. While those tenants were permitted to participate in CCCEO's

programs, their tenancy was not predicated on their participation. The programs were available to

those tenants on the same terms as were afforded all members of the public.

       In addition, CCCEO continued to rent units not being used for the transitional housing

program to tenants on terms negotiated in the open market. No statutory, regulatory, or self-

imposed rules or practices limit who may rent an available unit at the subject property. Rental




                                                14
rates are not limited or defined, except by any applicable rent control regulations. It matters not

whether CCCEO obtains rents at or below market. There is no formal procedure in place at the

subject property to determine monthly rent for those not in the transitional housing program based

on the tenant's income. There is no cap on rent for those units. CCCEO can obtain whatever rent

the market will bear.

       The court recognizes that the tenants at the subject property who are not participating in

the transitional housing program likely have limited income. As a result, the rents obtained by

CCCEO may be low.         Whether they are lower than market, however, depends not on the

organization's charitable intent, government funding, or the terms of a particular program designed

to achieve a charitable objective. Low rents at these units are a reflection of the market which the

subject property serves. In this regard, the subject property directly competes with other property

owners who serve the rental needs of the low-income community in the City without the benefit

of a tax exemption. See Twp. of Weymouth v. Mem'l Park Family Practice Ctr., Inc.,  7 N.J. Tax
 589 (Tax 1985) (denying exemption where a property is in direct competition with commercial

properties offering the same service).

       The provision of rental apartments to this segment of the market, while assisting in

addressing what is undoubtedly a public need for affordable housing, does not qualify a property

for a tax exemption. The Legislature has enacted a number of programs to encourage the

construction and maintenance of affordable housing, which may include relief from local property

taxes. See e.g., Long Term Tax Exemption Law,  N.J.S.A. 40A:20-1 to -22, and the New Jersey

Housing Mortgage Finance Agency Act,  N.J.S.A. 55:14K-1 to –93. CCCEO does not contend that

its use of the subject property comports with those statutory provisions. Renting homes to low-




                                                15
income tenants, while laudable, does not, standing alone, qualify for an exemption from local

property taxes.

       The court will enter an order granting an exemption to those portions of the subject property

used by CCCEO for its transitional housing program as of October 1 of each year preceding a tax

year under review, as well as a proportionate share of the common areas of the subject property,

and denying an exemption for the remainder of the subject property. The precise allocations for

each tax year and CCCEO's challenge to the amount of the assessments on the subject property for

each tax year remain pending.




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