62 So. 3d 261
La. Ct. App.2011Background
- Desire Housing Projects ( constructed 1949 ) were exempt from property taxes under a Cooperation Agreement with HANO that allegedly made them tax-exempt.
- Hope VI program in the 1990s led to redevelopment of Desire into new low-income housing via public/private partnerships with Abundance Square and Treasure Village.
- In 2002–2003, HANO executed Ground Leases and Regulatory and Operating Agreements with Abundance Square and Treasure Village to develop and operate units as low-income housing.
- Abundance Square and Treasure Village were privately owned for-profit partnerships; most units were designated as public housing or PHAs‑Assisted under the regulatory agreements.
- For 2008, the City assessed ad valorem taxes on the Abundance Square and Treasure Village properties; the owners paid under protest and filed suit for tax exemption under La. Const. Art. VII, § 21(A).
- Trial court denied relief, adopting the assessor’s view that ownership alone determined taxability; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does tax exemption apply to private-owned units dedicated to public housing? | Abundance Square and Treasure Village argue private ownership does not defeat exemption when units are public housing. | Williams contends ownership by private entities precludes exemption unless law provides a public-use ownership. | PHA-Assisted/Public housing units exempt |
| Whether ownership by private for-profit entities precludes exemption for the entire project | Ownership should not control exemption where portions are dedicated to public use and funded for public purposes. | Ownership determines taxability; private ownership negates exemption absent statutory/public-use dedication. | Ownership is not sole determiner; public-use dedication yields exemption for designated units |
| Whether the units serve a public purpose sufficient for exemption | Regulatory agreements and HUD subsidies show the units operate for public housing goals. | Public purpose not established for privately owned rental units without explicit public ownership. | Yes; units designated as public housing/PHAs-Assisted serve public purpose and are exempt |
Key Cases Cited
- Porterie v. Housing Authority of New Orleans, 190 La. 710, 182 So. 725 (La. 1938) (public housing serves public purpose and municipal function)
- Tulane Administrators, 38 La. Ann. 292 (La. 1886) (property may vest in public use for exemption even if title not in the public)
- Warren County v. Hester, 219 La. 763, 54 So.2d 12 (La. 1951) (revenues used for public purposes determine dedication to public use)
- Holley v. Plum Creek Timber Co., Inc., 877 So.2d 284 (La.App. 2 Cir. 2004) (tax exemptions are strictly construed; dedication to public use triggers exemption)
- Administrators of Tulane Educ. Fund v. Bd. of Assessors, 38 La. Ann. 292 (La. 1886) (dedication of revenues to public use can create exemption, even if title is not in public)
- Slay v. Louisiana Energy and Power Auth., 473 So.2d 51 (La.1985) (exemption requires true public-use and purpose)