Affordable Housing Alliance, Inc. v. Tinton Falls-opinion after trial

NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
MALA SUNDAR Richard J. Hughes Justice Complex
PRESIDING JUDGE P.O. Box 975
Trenton, New Jersey 08625-0975
609 815-2922, Ext. 54630 Fax 609 376-3018
October 2, 2026
Robert J. Guanci, Esq.
Waters, McPherson, McNeill, P.C.
Attorneys for Plaintiff
Gregory S. Baxter, Esq.
Caruso & Baxter. P.C.
Attorney for Defendant
Re: Affordable Housing Alliance, Inc. v. Tinton Falls
Block 101.17, Lots 11; 12
Docket Nos. 002307-2022; 000827-2023; 001026-2024; 001103-2025
Dear Counsel:
This is the court’s opinion after trial in the above-captioned matters. Plaintiff,
Affordable Housing Alliance, Inc. (AHA), a non-profit entity, seeks a tax exemption
under N.J.S.A. 54:4-3.6 for the above-captioned properties (Subject), located in the
Borough of Tinton Falls (Borough), the defendant herein, for tax years 2022 through
2025. AHA owns the Subject and rents it to unhoused individuals who are referred
to it by a local government agency pursuant to AHA’s agreement with Monmouth
County. AHA contends that the Subject merits an exemption because in addition to

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providing permanent housing, it offers various support services to the Subject’s
residents1 so they continue to thrive and remain housed.
The Borough contends that the provision of support services, while laudable,
does not change the reality that, while also laudable, the Subject’s primary use is to
provide housing for the unhoused. Such use of Subject, per the Borough, is not, and
has never been, specified in N.J.S.A. 54:4-3.6 as meriting an exemption. Further,
the Borough argues, the support services are no more than referrals, i.e., facilitating
access to actual services provided by third parties to the residents, thus does not
warrant a court-created exception to the exemption statute.
For the reasons below, the court rules in favor of AHA. Homelessness is a
significant societal concern. To alleviate this issue, the governments have sought
assistance of entities such as AHA to provide housing with housing support services.
The services are intended to assist the residents’ transition to an independent living
with the ability to achieve self-sufficiency, and continue to remain stably housed.
Supportive housing is thus a cohesive integration of housing and support services.
Support services are, in turn, integral to the actual services, because without the
referrals and access to third-party service providers (such as medical or mental health
professionals) by the resident service coordinators, the Subject’s residents may not
1 Per AHA’s CEO, the respectful terminology for a person living in a supportive
housing is a resident, not tenant. The court adopts this reference herein.

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be aware of or be able to seek out the services they require to maintain their housing.
Without this kind of integrated supportive housing, the unhoused would be the
government’s responsibility. Based on the totality of the evidence presented, the
court finds that the Subject is used for this type of supportive housing under its
contract with Monmouth County, therefore, qualifies for tax exemption for the tax
years at issue under N.J.S.A. 54:4-3.6.
PROCEDURAL HISTORY
On October 7, 2021, AHA filed an Initial Statement with the Borough’s
assessor seeking an exemption under N.J.S.A. 54:4-3.6 for the Subject. AHA stated
that its mission and “sole purpose” was “to develop on a nonprofit basis, decent
housing and related facilities and services that is affordable to persons of low and
moderate income and/or have special needs.” The Subject was described as two
buildings, with a total of 20 units, leased at affordable rents “to provide affordable
housing to formerly homeless individuals.”
In its cover letter, AHA told the assessor that the Subject was built and leased
pursuant to an agreement with Monmouth County’s program to provide housing to
the unhoused due to the closure of Fort Monmouth, thus, residents were those
referred to AHA under the program. AHA, with assistance of outside service
providers ensured that every resident “has access to resources they may need to
remain stably housed.” It noted that many of the Subject’s residents had subsidized

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housing vouchers to assist with rent payments, which rents were used for AHA’s
operational expenses.
The Borough’s assessor denied the request stating that while AHA’s stated
purpose was “admirable,” he found no “precedent where an apartment building
which provides affordable housing is a permitted qualifying use under N.J.S.A. 54:4-
3.6.” AHA appealed the denial to this court. After the court denied AHA’s summary
judgment motion, a trial followed.2
FACTS
The facts are derived from the deposition and trial testimony of two of AHA’s
witnesses, the Borough’s assessor’s trial testimony, and from documents admitted
in evidence. The assessor testified as to the reasons why he denied an exemption
and confirmed that he assessed the Subject as if it was an affordable housing, thus,
used below market rents based on the Subject’s rent rolls and operating expense
information. AHA’s witnesses testified as to the Subject’s creation, operation, and
the nature of the support services provided to the residents.3
2 The Borough opposed summary judgment on grounds additional facts were
needed. The court agreed, noting that it also needed more information, especially as
to the type of support services being offered/provided to the Subject’s residents.
3 At the end of the one-day trial, the court told the parties that it kept the record open
for any additional information it may require. Thereafter, the court issued a Case
Management Order (CMO) for a continuation of the trial requiring testimony as to
the type of services rendered by a third-party support services provider (the agreed-
to services were listed in a contract between the provider and AHA, and was a part

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1. AHA’s Corporate Status
AHA is a nonprofit entity, and successor to Monmouth Housing Alliance Inc.
(MHAI), which was created under Title 15A of the New Jersey statutes. MHAI’s
certificate of incorporation states that it was formed “to provide affordable housing
for persons with special needs.”
The document explicates, among others, that (i) MHAI was organized and
operated “exclusively for charitable purposes” under I.R.C. § 501(c)(3); (ii) MHAI’s
property was “irrevocably dedicated to charitable purposes;” (iii) no individual
whether associated with MHAI or otherwise, would get any portion of MHAI’s
income or asset; and (iv) any assets remaining upon MHAI’s dissolution, would be
distributed to the Mental Health Association of Monmouth County if it was a tax-
exempt entity, and if not, to any other nonprofit, federally tax-exempt entity,
organized and operated exclusively for charitable purposes.
of AHA’s summary judgment motion, which the Borough opposed because, among
others, there was “no proof that any of these specified services were actually
provided,” and these third party services were also discussed during the Borough’s
deposition of AHA’s CEO, the transcript of which was in evidence). The Borough
objected on grounds that the court kept the record open only as to questions on
evidence already produced not as to requiring new evidence. It nonetheless
complied with the CMO and deposed a witness from the provider, after which the
court continued the trial. On the date of the continued trial, the Borough reiterated
its objection. The court overruled the same on grounds that as a fact finder a
complete record of facts is necessary.

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In 2010, the certificate of incorporation was amended to change the entity’s
name from MHAI to AHA. AHA’s Mission Statement recites as follows:
The AHA’s mission is to improve the quality of life for all
NJ residents by developing and preserving affordable
housing by providing services to maintain housing
affordability, by providing housing education, and by
helping communities meet their legal and moral housing
obligations.
Under AHA’s by-laws, its “service area” was to provide “housing and related
services throughout” New Jersey. A Board of Trustees (unpaid) is entrusted with
management, with at least one-third of the members to comprise of “residents of
low-income neighborhoods . . . or low-income residents” or their representatives.
Upon its dissolution or winding-up, AHA’s remaining assets would, with approval
of the New Jersey Superior Court, be distributed to another nonprofit, I.R.C. §
501(c)(3) entity engaged in activities similar to that of AHA (but not entities created
for religious purposes).
2. The Subject
The Subject is comprised of 20 one-bedroom units located in two buildings
(ten units per buildings) known as Patriot Square. Built sometime in 2019/2020, it
was part of the re-development of property following the closure of Fort Monmouth.
Per the Borough’s assessor, the project was comprised of 32 buildings, with a total
of 243 units, of which 38 were Mount Laurel affordable units. The project was
developed and built by an unrelated for-profit developer with no input from AHA.

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The Fort Monmouth Economic Revitalization Authority (“FMERA”) agreed
to buy the Subject, and then transfer it to AHA for $1, for AHA to own, manage,
and operate the same, and make them available to qualified homeless applicants.
This was to further Monmouth County’s mission to establish “Designated Homeless
Service Facilities” in the Borough for the purpose of providing “Homeless Support
Housing Services,” with the Subject being the designated facility. AHA purchased
the same on October 10, 2020.
In this connection, AHA and the FMERA entered into an agreement in May
of 2020, to amend a prior agreement, and to align the same with changes made by
the Department of Housing and Urban Development (HUD) under its Continuum of
Care Program (COCP).4 AHA had to “provide housing assistance to the homeless
as assigned” and “provide supportive services to the homeless through other
providers within or servicing Monmouth County,” by coordinating with the
Monmouth County Homeless Service System Collaborative (MCHSSC), the entity
4 The COCP is authorized by 42 U.S.C. §§ 11381 to 11389. The stated purposes
are “to promote community-wide commitment to the goal of ending homelessness,”
and in this context, “to provide funding for efforts by non-profit providers and State
and local governments to quickly rehouse homeless individuals and families while
minimizing the trauma and dislocation caused to individuals, families, and
communities by homelessness.” 42 U.S.C. § 11381(1)-(4). The statute is also aimed
“to promote access to, and effective utilization of” federal or locally funded
programs, and “to optimize self-sufficiency among individuals and families
experiencing homelessness.” Ibid. See also 24 C.F.R. § 578.1(b)(1) - (4).

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which administered the COCP. Support services, even if provided, had to be first
accepted by the residents. Thus, the lease could not require a resident’s acceptance
of available social services, nor be terminated on this basis. The same is true whether
or not residents who, when initially referred to AHA, were receiving services such
as mental health assistance but chose not to continue those services after starting to
live at the Subject.
Through its central intake system,5 the MCHSSC would review and qualify
individuals and families “seeking housing assistance and/or services on the basis of
being homeless,” and thereafter, place them “in available and affordable housing
supply managed and operated by housing providers” such as AHA. The Mental
Health Association of Monmouth County (MHA), a “designated Coordinator Entry
provider,” also facilitates housing referrals to AHA after a comprehensive intake
process that “verifies homeless status and other qualifying factors.”
5 The regulations prescribe how the COCP is to be established. See 24 C.F.R. §
578.5. Among others, they require “[r]epresentatives from relevant organizations
within a geographic area” to establish the COCP “for the geographic area to carry
out the duties” specified in the regulations. 24 C.F.R. § 578.5(a). “Relevant
organizations include,” among others, “nonprofit homeless assistance providers, . . .
governments, . . . affordable housing developers . . . and organizations that serve
veterans and homeless and formerly homeless individuals.” Ibid.
A “centralized or coordinated assessment system” is defined as “a centralized or
coordinated process designed to coordinate program participant intake assessment
and provision of referrals.” 24 C.F.R. § 578.3(a). “A centralized or coordinated
assessment system covers the geographic area, is easily accessed by individuals and
families seeking housing or services, is well advertised, and includes a
comprehensive and standardized assessment tool.” Ibid.

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Per the agreement, AHA was responsible for all costs and expenses associated
with the operation and maintenance of the Subject and for the delivery of Homeless
Support Housing Services. If AHA failed to provide services within a specified date
(three months from the effective date of the conveyance deed), then the units would
revert to FMERA. AHA could modify any provided services “to conform with any
[of] HUD’s policies or procedures related to providing Homeless Support Housing
Services to the homeless persons and families, including changes to” HUD’s COCP.
AHA’s CEO testified that the goal of the agreement was to have an unhoused person
transition to becoming an independent member of the community, and achieving a
sense of normalcy and stability, as espoused by the COCP.
3. AHA’s Leases
AHA began leasing the Subject in 2020. Its CEO explained the process as
follows: once a qualified applicant is referred, AHA’s property manager interviews
the person, and conducts background and credit checks, as pre-conditions to the
lease. If the applicant fails either, or there is a misrepresentation in either, AHA can
void the executed lease. AHA’s CEO agreed that on rare occasions, AHA has
declined applicants due to income issues. She also indicated that an individual need
not be disabled to apply for housing at the Subject. She noted that the MHA would
generally not refer an individual who, in its determination, would not be able to live
independently, however, was providing services to two residents it had referred to

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AHA. AHA provides its residents with move-in support if requested, and based on
their needs. Per its CEO, the model of supportive housing is “housing first” with the
rest to follow.
The lease notes that a rented unit “has Low Income Tax Credits applicable to
it,” meaning that the resident should be “income certified to live in that unit,” and
that AHA will ask for this information annually to provide to the Internal Revenue
Service, and to “assure income eligibility.” AHA’s CEO testified that no annual re-
qualification is needed once a resident signs a lease.
Leases are of a one-year term (renewable annually). Rents range from $1,000
to $1,250 per month with a security deposit (one month or less). Per AHA’s CEO
the rents are in line with those required for affordable housing units and increase
under those guidelines. She agreed that the rents are not tied to any kind of disability
or special needs of a resident, and that most residents used rent vouchers.
Residents pay for utilities. They are subject to additional charges for late
payment, returned checks and lockouts. AHA’s CEO noted that AHA previously
received grants to assist in the payment of operational expenses, but once those dried
up, it began using rents to pay such expenses, including taxes and payment to the
third-party supportive services provider. AHA does not receive HUD funding.
The lease contains standard clauses, including possible eviction for breach of
the terms. AHA’s CEO testified that eviction is a last resort remedy for nonpayment

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of rent. If a resident is delinquent in rent payment, AHA’s property manager will
reach out to the resident and work with them to find funding sources (such as
vouchers). If the resident is receiving welfare-based vouchers, then AHA will adjust
the same for the unpaid rent. Other options include trying a payment plan, or having
the resident seek assistance from churches. The CEO stated that it was not “unusual”
for AHA to “write a check,” and that through January of 2025, there have been only
two evictions. She also testified that residents can be evicted for serious misconduct,
or if despite warnings, they have unwelcome guests whose behavior causes repeated
police intervention.
4. Services for AHA’s Residents
AHA’s CEO testified that based on her extensive experience in this area for
over twenty years, supportive services include any service which would aid the
formerly unhoused individuals maintain their housing, including connecting them to
available resources. The goal was to assist unhoused persons transition from
homelessness to becoming independent and integrated into normal life by
educating/helping them to avail themselves of available resources so that they might
continue to remain stably housed. She stated that homelessness is defined by the
State housing agency as “special needs,”6 and this is due to associated issues such as
6 AHA provided a document from the website of the New Jersey Housing Mortgage
and Finance Agency (NJHMFA) which discussed its financing and support
programs for “service-enriched housing developments, housing for people with

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domestic violence and poor mental health of the unhoused. Most residents at the
Subject, she said, are receiving some type of social service from third-party
providers when they begin living at the Subject, including MHA and Soldier On, the
latter providing services to homeless veterans.
MHA’s January 9, 2025, letter confirmed its ongoing partnership with AHA
and stated that it was “actively providing services” to two residents at the Subject as
of that date, who were homeless when they were referred to AHA, thus qualified as
“special needs” individuals under applicable housing guidelines. MHA identified
its supportive services as (i) assisting with daily-living skills and neighborhood and
landlord relationships; (ii) tenant advocacy; (iii) linkage and referrals to community-
based services; and (iv) development of a community support system. It stated that
it remained committed to serving individuals “as they transition from homelessness
to stable housing” at the Subject.
Although AHA does not maintain an onsite office at the Subject, its property
manager and residential services coordinators provide housing-related assistance.7
special needs,” to “improve the housing situation for” New Jersey’s “vulnerable
citizens,” i.e., the unhoused. One incentive was availability of tax credits for Special
Needs Projects (where “at least 25% of the units are rented to a special needs
population and which provide appropriate supportive services”).
7 AHA has two residential services coordinators who act as such for all the 20
properties it owns in Monmouth County. AHA’s CEO testified that the lack of onsite
office space was unfortunate as the Subject was built that way, and since it cannot
be altered, AHA must try to find ways to work around this issue.

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This includes explaining lease terms, assisting with move-in when requested,
discussing alternatives when a resident falls behind on rent, referring residents to
financial or charitable resources and payment-plan options, helping them complete
rental-assistance applications, and connecting them to community resources such as
food programs.
AHA’s CEO described supportive housing as involving periodic active
engagement with residents. An internal 2024 document lists these coordinators’
services as including explaining lease terms, and referrals to social services such as
childcare, disability assistance, domestic-violence support, financial coaching and
counseling, food assistance, job and career resources, mental health services, older-
adult care, secondhand stores, substance abuse treatment, transportation, utility
assistance, and similar resources. In one instance, a referral for job training resulted
in “a resident being offered a job, allowing the resident to sustain living expenses.”8
When a resident at the Subject obtained employment, AHA’s CEO testified, she
counted it as a success for supportive housing.
8 AHA provided another internal record keeping document (commenced in 2024
motivated by a newer grant AHA received) listing the date and type of services
provided by AHA’s in-house residential service coordinators to residents, including
referring them to AHA’s third-party support services provider. The report was
intended to show that AHA makes regular engagements with the Subject’s residents.

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Due to ongoing resident issues in 2021, AHA’s CEO determined that its in-
house support services were insufficient and to therefore retain Collaborative
Service Programs of New Jersey (CSP), a nonprofit entity, to provide extended and
quality support services to the Subject’s residents.9 She testified that CSP is well-
known for its mental health services, works with individuals who have special needs,
and operates a recovery center near the Subject.
With the approval of Monmouth County, AHA and CSP entered into a 2021
Memorandum of Understanding (MOU) for “Supportive Social Services.” The
MOU’s purpose was a joint effort “to ensure” that the Subject’s residents would
“receive supportive and referral services necessary to assist them to maintain their
housing and improve [their] overall wellbeing.”
AHA undertook to maintain the Subject, handle rent collection and
administration, and oversee “tenant relations,” including notices, evictions, and
enforcement of leases. CSP undertook to have one full-time employee who would
9 AHA’s CEO e-mailed CSP that there was an “issue” at the Subject “regarding 20
formerly” unhoused people who were now “in permanent housing.” She noted that
these residents were those placed through a “homeless coordinated entry program,”
with “long term vouchers and some level of support services but it doesn’t seem to
be anywhere near enough. We have a lot of unhappy neighbors. But more
importantly, I don’t feel that we’re giving our residents the support they need or the
best opportunity to succeed.” She added that Monmouth County was willing to
provide some funding for AHA “to contract with an outside provider to work with
our residents,” and the CSP would be her choice of such provider.

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coordinate the delivery of supportive services to AHA’s residents. The support
services were enumerated thus:
1. Provide links to community and social services;
2. Screen/assess a tenant’s ability to live independently;
3. Support, including:
a. case management, such as (i) rehabilitation, vocational and
employment assistance; (ii) linkage with general health and dental
services; (iii) income support and benefits; (iv) substance-abuse
treatment; and (v) consumer and family involvement;10
b. an initial individual needs assessment and support plan, with
periodic updates as needed;
c. referrals to treatment services or other needed social services from
other providers (e.g., Jersey Shore Medical Center);
d. early crisis intervention at AHA’s request and consultation in
dispute management between residents and property management;
e. assistance with household disputes and understanding lease terms,
including eviction and appeals processes, with necessary referrals
provided only if requested and accepted, unless necessary to protect
an individual or others from serious harm.
4. Additional services included:
a. encouraging activities that would aid in developing skills and
abilities to use community resources;
b. facilitating access to treatment for social-service and physical-health
needs;
c. teaching the use of public transportation; and
d. helping tenants access vocational and employment assistance, peer
and substance-abuse counseling, special-needs skills training, safe-
sex education, residents’ rights education, and other resources.
CSP also agreed to (a) assist AHA in educating the general populace about
“supportive housing” and act as an advocate for the residents; (b) maintain records
10 CSP would not provide all services likely needed (e.g., legal, primary medical
care, psychiatric medications) but would assist in providing contact information of
appropriate providers.

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of supportive services required by funding sources and cooperate with AHA in
related audits and reporting; and (c) share with AHA flyers and similar materials
provided to residents, as well as concerns or issues involving AHA’s residents.
Similar MOUs were entered through June 2025. AHA agreed to pay CSP
$15,000 for January 2023 through June 2023, from a grant provided by Monmouth
County; $30,000 for July 2023 through June 2024; and $30,000 for July 2024
through June 2025. Each MOU stated that the agreement was contingent on
available funding and would terminate if funding ceased. Per AHA’s CEO, the
County provided only a one-time funding, therefore AHA paid CSP’s fees from the
Subject’s operating income, or from federal grants when available and applicable.
AHA’s CEO testified that CSP regularly engages with the households,
generally on a weekly basis, and not just when AHA makes a referral. CSP provides
transportation when requested, while AHA staff assist residents in navigating
available programs. Because AHA’s in-house staff are not medically qualified, they
provide referrals to CSP for services requiring that expertise. For example, if staff
identify a concern during a property inspection, they may make a direct referral to
CSP. Residents could also contact CSP directly.
CSP’s Outreach Regional Coordinator’s testimony echoed AHA’s CEO’s
testimony concerning CSP’s regular contacts with the Subject’s residents. She
explained that she visits the residents weekly or bi-weekly for wellness checks and

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provides them with food donated by vendors including farmers’ markets. If a
resident does not answer the door, the staff will leave the food at the door, and follow
up with the resident by text or telephone. When requested, she also drives residents
to destinations such as the post office and assists them with contact information and
forms for community-based services, including rent assistance, Medicaid, and food
pantries.11 CSP may provide funds to cover the rent if the tenant (with assistance of
AHA and/or CSP) had exhausted searching for other sources of funding.
CSP’s coordinator’s education is in social services, but she is not a certified
or licensed social worker or medical care provider, nor can she prescribe medication.
She testified that after extensive training at CSP, she is familiar with identifying and
understanding behavioral issues, having come from a similar background. Her visits
may begin with a food drop-off and a brief conversation and, when appropriate,
develop into a listening and referral session. She stated that services requiring
expertise in medical/mental health would occur at CSP’s location or other
community wellness locations. She described the core of CSP’s work as connecting
individuals with available community resources.
11 AHA provided an internal record keeping document listing the date and type of
services provided by CSP. Many entries reflected food drop-offs and grocery
deliveries. Some were personal discussions with a resident on their specific issues.

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ANALYSIS
To qualify for an exemption under N.J.S.A. 54:4-3.6, a nonprofit entity, as the
property owner, must show that (1) it is organized exclusively for a tax-exempt
purpose or purposes; (2) the property is actually used for the tax-exempt purpose(s);
and (3) the operation and use of the property is not conducted for profit. Int’l Schs.
Servs. v. West Windsor Twp., 207 N.J. 3, 16 (2011), aff’g, 412 N.J. Super. 511 (App.
Div. 2010). These are commonly called the “organization,” “use,” and “profit”
prongs or tests. Borough of Hamburg v. Trustees of Presbytery of Newton, 28 N.J.
Tax 311, 318 (Tax 2015). The party seeking exemption has the burden of proving
its entitlement to the same. Int’l Schs. Servs., 207 N.J. at 15.
The statute enumerates certain uses which can qualify a building (and the land
required to support those buildings, but not exceeding five acres) for exemption. The
Borough correctly notes that providing housing, even if at affordable rents, to any
vulnerable section of the community such as the homeless populace, is not a
statutorily enumerated use. However, this does not decisively shut the door for such
a landlord in seeking an exemption. Rather, the nonprofit property owner can prove
that an exemption is warranted under other provisions of the same statute.
Here, thus, AHA seeks an exemption which the statute allows for a property
that is used for charitable purposes. See N.J.S.A. 54:4-3.6 (exempting “all buildings

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actually used in the work of associations and corporations organized exclusively for
. . . charitable purposes”).
Alternatively, AHA asks for the exemption afforded to properties used for the
moral and mental improvement (MMI) of people. Ibid. (exempting “all buildings
actually used in the work of associations and corporations organized exclusively for
the . . . [MMI] of men, women and children”).
Every analysis of an exemption claim requires a fact-based analysis. Advance
Housing, Inc., v. Teaneck Twp., 215 N.J 449, 572 (courts must make a “fact-specific
determination” whether the property is being actually used for an exempt purpose).
Here, there is no dispute that AHA is organized exclusively for charitable
purposes and that it is not using the Subject for profit-making purposes. Thus, AHA
satisfies the organization and profit prongs.
The use prong is the crux of the battle between the parties, i.e., whether the
Subject is actually used in furtherance of an exempt purpose. No one disputes that
AHA provides housing. AHA, as landlord of the Subject, leases a unit under an
agreement with the resident just as any other landlord. The lease agreements do not
evidence anything atypical as to requiring a resident to make timely rent payments,
an initial security deposit, and pay for utilities. There are no rent waivers,
concessions, or discounts provided for in the lease. Residents can be liable for

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additional fees and charges for late payment of rent or returned checks. They can be
evicted for nonpayment of rent (including for disruptive/criminal behavior).
The disagreement is thus whether AHA’s additional provision of housing
support services qualifies the Subject for exemption. In this context, another issue
is whether the populace being served, i.e., the homeless, is of any relevance.
AHA argues “yes” to both because the homeless are deemed as special needs
people, and because the housing support services (atypical in properties owned by a
for-profit landlord) are provided to assist the Subject’s residents in furtherance of
the governmental goals to help integrate them into normal living and remain stably
and permanently housed.
The Borough argues “no” to both (while acknowledging that AHA is
performing a public service) because (1) the support services are nothing more than
a “welcome packet” provided upon move-in to the Subject, and providing referrals
to, and information about publicly available information on social and community
services, with neither AHA nor CSP actually providing or offering those services;
and (2) residents are not required to be mentally disabled, and the support services
do not include medical treatment to the very few residents who suffered some mental
issues.
The Borough is correct that caselaw on supportive housing involved
properties providing support services to the mentally challenged. See Advance

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Housing, 215 N.J. at 553; Community Access Unlimited Inc. v. Elizabeth City, 21
N.J. Tax 604 (Tax 2003) (granting exemption for property that was used to provide
supportive housing to those with some form of mental disabilities); 1711 Third Ave.,
Inc. v. Asbury Park City, 16 N.J. Tax, 174, 177 (Tax 1996) (denying exemption to a
federal Section 811 supportive housing where the goal was to “provide permanent
housing and support services to low income adults with mental problems”); Essex
Properties Urban Renewal Associates, Inc. v. Newark City, 20 N.J. Tax 360, 361
(Tax 2002) (denying exemption to an apartment rented to “developmentally and/or
physically disabled persons”).
However, in Salt & Light Co., Inc. v. Mount Holly Twp., 15 N.J. Tax 274,
277 (Tax 1995), the trial court granted an exemption to property that was used to
provide “temporary housing and counseling services to the homeless.” The support
services included plaintiff’s staff helping (providing advice and assistance to)
residents as to “job training, employment, education, transportation, child care,
medical services and permanent affordable housing.” Id. at 280. None of these
services were “actually” provided by plaintiff, but the staff assisted the individuals
in “obtaining these benefits.” Ibid.
The court does not view any of the above cases as setting finite boundaries in
granting an exemption for supportive housing situations, i.e., the exemption applies
only if the residents of the housing are mentally (or physically) disabled. Indeed, in

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Advance Housing, the Supreme Court observed that the Tax Court has “recognized
that the provision of both housing and substantial supportive services that foster the
prospect of independent and productive living in the community for the mentally
disabled . . . and the homeless . . . meets the standard for” an exemption. 215 N.J.
at 573. See also Community Access, 21 N.J. Tax at 615 (deciding the exemption
based on the analogous facts in Salt & Light “[a]though” that case “concerned
housing the homeless rather than housing the mentally disabled”). These cases
indicate an inclusive rather than an exclusive reading of supportive housing for
purposes of N.J.S.A. 54:4-3.6.12
Nor are support services exemption-worthy only if the services include
medical treatment performed by medical practitioners, i.e., the property should be
operated like a medical practice or a health care facility. The New Jersey Supreme
Court in Advance Housing, implied as much when it rejected the taxing districts’
arguments that a property which has “both residency and services/counseling
components, must have some institutional aspect to the housing program to qualify
for a tax exemption.” 215 N.J. at 575 (internal quotation marks omitted). Similarly,
12 AHA’s CEO credibly testified that typically the Subject’s residents were receiving
some type of services from nonprofit providers such as Soldier On (which provided
services to homeless veterans), and that two residents were still receiving services
from MHA. The Borough’s contentions that mental health services for two out of
the 20 residents at the Subject is insufficient for an exemption under caselaw
addressing the mentally disabled, lacks merit. What matters is that the services are
offered not how many use them. Advance Housing, 215 N.J. at 575-76.

23
in Community Access, the exemption was granted based on, among others, the
undisputed fact that the nonprofit owner’s staff, i.e., the counselors, were “specially
trained to provide advice and assistance in obtaining employment, medical care and
childcare, education, and job training.” 21 N.J. Tax at 616.
Therefore, while it is undisputed that the support services provided at the
Subject do not typically involve mentally challenged residents or medically trained
or licensed staff who provide medical services to such residents, it does not, per se,
prevent or bar qualification for an exemption.
In this context, providing supportive housing to the unhoused is of significant
relevance when considering AHA’s claim for exemption. This court has ruled that
“providing housing to the homeless on a not-for-profit basis qualifies as a charitable
use,” and that undoubtedly “housing the homeless ensures one of the basic
necessities of life to an indefinite number of persons who are too poor to, or
otherwise incapable of, obtaining housing for themselves.” Salt & Light Co., 15 N.J.
Tax at 285 (citations omitted). Further, “both the legislative and executive branches
of government have recognized that [the] government has an obligation to meet the
needs of the homeless.” Ibid. (citation omitted). In Advance Housing, it was
recognized that in the absence of supportive housing, “many of its clients would be
at greater risk of homelessness, placing greater strain on our social services, such as
emergency medical care, shelters, and police intervention.” 215 N.J. at 574-75. See

24
also Community Access, 21 N.J. Tax at 615, n.12 (based on statistical data, “23% of
the homeless population in America is mentally disabled”); 42 U.S.C. § 11301
(congressional findings on establishing a federal Interagency Council on
Homelessness due to the severity of homelessness which caused danger to the “lives
and safety of the homeless” and as to which “there is no single, simple solution”).
Here, Monmouth County undertook to provide “homeless support housing
services” in compliance with the HUD’s COCP requirement and used AHA to
further this mission. The goal of the COCP, as noted above, is to end homelessness,
and fund “efforts by non-profit providers” in this regard so individuals are “quickly
rehouse[d],” thus, lessening the “trauma and dislocation caused” by being unhoused,
and providing them the opportunity to become self-sufficient. State agencies such
as the NJHMFA have acknowledged that homelessness is a serious societal issue,
and that support services are crucial to ensuring the success of providing and
permanently retaining a residence. See also N.J.S.A. 52:27D-287b(d) (“A myriad
of factors contribute to homelessness, including a shortage of affordable housing . .
. available to all who suffer from physical and mental illnesses . . . and a lack of
education and job skills necessary to acquire adequate wage jobs”). The scourge of
homelessness is thus a significant societal concern, and therefore, highly relevant
when deciding an exemption claim for a supportive housing property which is used
to home and serve the unhoused.

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Indeed, the goals which were attendant in the supportive housing provided to
the residents of the property in Advance Housing pursuant to the findings of an
executive Task Force, i.e., a “transition from dependent living to independent
living,” 215 N.J. at 576 (citation omitted), are the same goals attendant in the
COCP’s provisions for supportive housing, see 42 U.S.C. § 11381 (4) (“to optimize
self-sufficiency among individuals and families”), incorporated here by the FMERA
to be effectuated by AHA. See also Community Access, 21 N.J. Tax at 617
(“housing itself is secondary to” the landlord’s “main purpose, which is to give
individuals incapable of functioning on their own an opportunity to live as close to
a normal life as possible”). Thus, housing with supportive services is well-
recognized as a unique combined enterprise aimed to rehabilitate the unhoused and
remain stably housed.
In this connection, the court is unpersuaded by the Borough characterizing
AHA’s support services (directly, and through CSP) as mere information
dissemination and referrals to third-party providers, i.e., akin to a public relations
exercise, for purposes of an analysis under N.J.S.A. 54:4-3.6. The evidence however
proves that the wellness visits by AHA’s and CSP’s residential coordinators are
more than just perfunctory. While checking in on residents, through a food drop or
otherwise, there is an inquiry of whether the resident needs assistance, and an
assessment of the response. Once verbalized (or encouraged to be verbalized), the

26
resident coordinators provide various resources and assist in contacting those
resources, i.e., the coordinators tailor their visits to individual needs, including
determining whether another professional was needed. By providing food, they let
the resident know that their well-being is important, and that they will get the needed
support instead of dealing with any issue alone. By leaving flyers about local events
at the residents’ door, AHA is aiding the residents to integrate with the local
community. If medical issues arise, whether it be a need for psychiatric help or
substance abuse, the residents at the Subject may not seek or receive the help they
may require without the intervention of AHA and/or CSP, and their respective
referrals. The supportive services thus work in tandem with available community,
medical, and social service providers.
Notably, the support services provided by AHA itself and through CSP, not
only meet the definition of support services in the federal statutes, see 24 CFR §
578.53 (support services as those needed “to obtain and maintain housing,” and
“include counseling, coordinating and developing services better suited to serve
different individuals, providing food or groceries, and mental health services”), but
are also similar to those explicated as being provided by the nonprofit owners in
Advance Housing, Salt & Light, and Community Access.13
13 In Advance Housing, the offered support services were “counseling; vocational
guidance and support; crisis intervention; coordination of and transportation to AA
meetings, medical appointments, and recreational activities; and assistance with

27
It is true that in Essex Properties, this court found that the entity’s provision
of counseling and support by its sole onsite social worker, was “not so unique as to
warrant tax exemption.” 20 N.J. Tax at 367. However, this was because the only
evidence was the entity’s “statement” of service provision, but no “evidence as to
what these services entail.” Ibid. Due to the paucity of evidence, the court found
that the nonprofit owner was “essentially renting apartments to disabled persons, and
therefore, did not provide a service unique to” the property’s location. Id. at 368-69
(distinguishing Southern Jersey Family Medical Centers, Inc. v. Pleasantville City,
351 N.J. Super. 262, 273 (App. Div. 2002) which held that an entity giving health
and dental care to the impoverished at below normal or no fees, provided “vital
services which are unique to the area where the property is located”).
Similarly, in 1711 Third Ave., the court was willing to consider an exemption
to an entity which provides housing to those with mental health issues by noting that
the entity “could establish that the property in question is actually . . . used to carry
daily living activities, such as cooking, cleaning, food shopping, taking medication,
budgeting and paying bills, and securing statutory benefits and entitlements.” 215
N.J. at 558.
In Salt & Light, “the staff provided advice and assistance in obtaining
employment and needed services such as medical care, child care, education, job
training,” and on occasion “taught basic living skills such as cleaning and cooking.”
15 N.J. Tax at 282.
In Community Access, the support services included “money management and
counseling” and “provide advice and assistance in obtaining employment, medical
care and childcare, education, and job training.” 21 N.J. Tax at 609, 616.

28
out a charitable purpose.” 16 N.J. Tax at 182. However, since the entity had “not
offered the proper proofs nor made the necessary arguments to bring itself within
the exemption,” it did not merit an exemption. Id. at 182-83.
Here, the court is satisfied that AHA provided sufficient credible evidence as
to the nature and quantity of the support services provided and supplied at the
Subject to the Subject’s residents, in amplification of the undisputed documentary
support thereof, by AHA and CSP. That CSP is providing the services for and on
behalf of AHA does not affect the analysis or somehow negates the possibility of an
exemption for the Subject. Evidence shows that AHA’s CEO, being keenly aware
and sensitive to the needs of the residents, voluntarily contacted and retained CSP,
a well-known support service provider, especially for people with special needs, to
provide increased quality and quantity of support services to the Subject’s residents.
Of note it is undisputed that AHA pays CSP from the Subject’s rental income (except
for a one-time County provided funding).
That some of the support services occur offsite (at CSP’s location) is also not
a detriment to the qualification for an exemption. The Subject’s physical limitations
as to available space was not due to AHA, nor in its control, since AHA did not build
the Subject. CSP, however, has the required space and staff which AHA lacks. More
importantly, CSP provides services as a continuation or product of the onsite
wellness visits by the service coordinators.

29
The possibility of eviction, or the fact that there are no rent concessions for
the Subject’s residents, does not automatically provide a basis for denying the
exemption. Leases typically contain rights, duties, and remedies, one such duty is
to pay rent and the remedy for breaching that requirement is the possibility of
eviction. What is of relevance is not the inclusion of an eviction clause in the
contract, but whether and how the same is effectuated. Here, AHA’s CEO credibly
testified that AHA, and if needed, CSP, make every effort to ensure that eviction is
the last resort. It is undisputed that there have been only two evictions over a period
of five years. To the court, this only endorses the testimony of the CEO (including
that it is not unusual for AHA to write a check), that every effort is made to maintain
and retain the resident at the Subject.
In sum, the court is unpersuaded by the Borough’s argument that AHA’s
support services are simply referrals and that therefore, the Subject is no different
from any other income-producing property. See e.g. Salt & Light, 15 N.J. Tax at
290 (although “for-profit motels and hotels may provide housing for the homeless .
. . these entities provide no services, no counseling, and in many instances no
cooking facilities”). Based on a totality of the facts here, the court finds that the
Subject operates as more than a mere residence for the unhoused. Housing is only
the initial step in providing care. The care continues through supportive services
enabling the permanency of housing and stability to the formerly unhoused. The

30
supportive services promote the larger picture of assisting individuals, whether it be
for mental disabilities or for issues following homelessness, to maintain
independence and overall reducing the burden on government programs. Without
the referrals of the service coordinators, the individuals might not be aware of or be
able to seek out the services they require. In other words, the housing support
services provided to the residents cannot be viewed in an isolated fashion.
The Subject’s residents pay below-market rents for a living space that also
includes access and referrals to many necessary services. These support services are
intended to facilitate the unhoused individuals achieving self-sufficiency, the ability
to lead an independent life, and remain stably housed. Thus, AHA’s support services
are inextricably connected to its providing housing. Without this kind of supportive
housing, the unhoused would be the government’s responsibility. Indeed, the
Subject’s use as supportive housing fulfills many of the considerations that guides a
court in analyzing an exemption claim such as: (i) would the work have been the
expense and burden of the government if not done by the nonprofit entity; (ii) is the
property used in such a way that it furthers the entity’s charitable purpose; (iii) is
there governmental support/recognition for the entity’s charitable purpose; and (iv)
does the property’s use address “important and legitimate governmental concern.”
Advance Housing, 215 N.J. at 572-73 (citations omitted).

31
For all of these reasons, the Subject is exempt under the charitable clause in
conformance with its purpose of being organized and operated exclusively for
charitable purposes. As this court has stated, “providing housing and services to the
impoverished homeless is undoubtedly a core charitable purpose.” Salt & Light, 15
N.J. Tax at 290.
The exemption can also fit within the MMI clause of N.J.S.A. 54:4-3.6. While
AHA’s organization document does not parrot the MMI language, the court finds
that the purpose of providing affordable housing to people with special needs
suffices for purposes of the organization test. It is difficult to agree that services
aimed to provide self-sufficiency, independence and rehabilitation of unhoused
individuals are not for their mental or even moral improvement. See, e.g., Chester
Theatre Grp. of Black River Playhouse v. Chester Borough, 115 N.J. Super. 360,
364-65 (App. Div. 1971) (“[t]here is no legislative delineation of the” MMI clause
thus, “anything which pertains to the development or betterment of the mental
faculties” could be “‘mental improvement”).
An Order and Final Judgment in accordance with this opinion will be
simultaneously entered by the court.
Very Truly Yours,
/s/ Mala Sundar
Hon. Mala Sundar, P.J.T.C.