A recent decision by the New York Supreme Court Appellate Division – Second Department has cleared the way for industrial development agencies (IDAs) to provide financial assistance to affordable senior housing projects.
The Jan. 21, 2026, ruling in Wyandanch Union Free School District et. al. v Town of Babylon comes in response to a challenge by the Wyandanch Union Free School District (“Petitioners”) against the Babylon Industrial Development Agency’s provision of financial assistance, including a partial abatement from real property taxes, a mortgage recording tax exemption and a sales and use tax exemption, to a senior housing project in the hamlet of Wyandanch (the Town).
IDAs were created under Article 18-a of the General Municipal Law (the “Act”) to “advance the job opportunities, health, general prosperity and economic welfare of the people of the state of New York and to improve their recreation opportunities, prosperity and standard of living” by providing financial assistance to eligible “projects” in the municipality the IDA was created to benefit.
The Petitioners argued the senior housing facility did not constitute a “project” under General Municipal Law Article 18-a (the “Act”). The Court disagreed, noting the Babylon IDA specifically found that the “proposed construction will promote employment opportunities and combat economic deterioration” especially in light of the fact that the Town was in need of affordable senior housing, and the senior housing project was part of a larger project aimed at an urban renewable area in the Town and involved an economically distressed area.
Although the Act enumerates a list of activities that are “projects” that does not include residential projects, the court notes this list is non-exhaustive, given the plain text of the statute. Rather, the primary consideration when determining whether the proposed project is a “project” within the meaning of the Act is whether it “promotes employment opportunities and prevents economic deterioration” to support the legislative purpose of the Act.
Our Affordable Housing Industry Team and Public Finance and Economic Development Group will continue to track developments such as this to keep clients informed. If you have questions about this or related development or affordable housing matters, please reach out to attorney Michael A. Discenza at (212) 912-3605 and mdiscenza@harrisbeachmurtha.com; attorney Elizabeth C. Hughes at (716) 200-5269 and ehughes@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
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