Affordable Senior Housing Qualifies as an IDA “Project” When Rationally Found to Promote Jobs and Prevent Economic Deterioration

I. Introduction

In Matter of Wyandanch Union Free Sch. Dist. v Town of Babylon Indus. Dev. Agency (2026 NY Slip Op 00252), the Appellate Division, Second Department resolved an issue of first impression for that Court: whether an industrial development agency (IDA) acts within its statutory authority under article 18-A of the General Municipal Law (the New York State Industrial Development Agency Act) when it treats an “affordable senior housing” development as a qualifying “project” eligible for IDA financial assistance (principally, tax abatements and exemptions).

The petitioners—Wyandanch Union Free School District, its Board of Education, and the Board President—commenced a CPLR article 78 proceeding to annul the Town of Babylon IDA’s February 26, 2020 resolution granting a 30-year real property tax abatement and certain sales/use and mortgage recording tax exemptions to WR Communities-D, LLC (an affiliate of Albanese Development Corporation) for an affordable senior housing project in Wyandanch. The petitioners argued the IDA exceeded its authority because residential construction is not expressly listed as a covered “project” under the Act.

II. Summary of the Opinion

The Second Department affirmed the judgment dismissing the petition. It held that the Babylon IDA acted within its statutory authority and that its determination was rational, not arbitrary and capricious, not an abuse of discretion, and not affected by an error of law. Critically, the Court concluded that the IDA could treat affordable senior housing as a “project” within General Municipal Law § 854(4) because the record supported the IDA’s findings that the development would promote employment opportunities and combat economic deterioration, and because the statutory text (“including, but not limited to” and “other economically sound purposes”) is broad.

III. Analysis

A. Precedents Cited

1. Article 78 standard of review and deference to agency interpretations

The Court framed the challenge under CPLR 7803(3) (arbitrary and capricious / abuse of discretion / error of law) and relied on familiar Court of Appeals authority limiting judicial re-weighing of administrative judgments:

  • Matter of Classic Realty v New York State Div. of Hous. & Community Renewal, 2 NY3d 142
  • Matter of Gilman v New York State Div. of Hous. & Community Renewal, 99 NY2d 144
  • Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222
  • Matter of Toys "R" Us v Silva, 89 NY2d 411
  • Akpan v Koch, 75 NY2d 561

It also cited Second Department decisions applying the same principles, including: Matter of McCollum v City of New York, 184 AD3d 838; Matter of Claudia E. v Ryan, 61 AD3d 865; Matter of Savetsky v Board of Zoning Appeals of Town of Southampton, 5 AD3d 779; and Matter of Calvi v Zoning Bd. of Appeals of City of Yonkers, 238 AD2d 417.

On interpretive deference, the Court emphasized that an agency’s reading of statutes it administers must be upheld if reasonable, citing:

  • Matter of Sternberg v New York State Off. for People with Dev. Disabilities, 204 AD3d 680
  • Matter of 96 Wythe Acquisition, LLC v Jiha, 165 AD3d 1100
  • Matter of Nearpass v Seneca County Indus. Dev. Agency, 152 AD3d 1192
  • Matter of County of Monroe v Kaladjian, 83 NY2d 185

The Court also clarified the “outer boundary” of deference: a determination is arbitrary and capricious if it exceeds statutory authority or violates law, citing Matter of Jennings v Commissioner, N.Y.S. Dept. of Social Servs., 71 AD3d 98, and related Second Department cases (Matter of Lozada v Elmont Hook & Ladder Co. No. 1, 151 AD3d 860; Matter of Lilakos v Environmental Control Bd., 148 AD3d 893). That framing set up the Court’s central move: characterize the dispute as one of statutory scope and then show the IDA remained within it.

2. Statutory interpretation: plain meaning controls; “including, but not limited to” defeats expressio unius

The Court invoked the modern “text-first” approach to statutory meaning, relying on:

  • Matter of Jun Wang v James, 40 NY3d 497
  • Yatauro v Mangano, 17 NY3d 420
  • People ex rel. E.S. v Superintendent, Livingston Corr. Facility, 40 NY3d 230
  • Makinen v City of New York, 30 NY3d 81
  • Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d 106
  • Matter of DaimlerChrysler Corp. v Spitzer, 7 NY3d 653
  • Majewski v Broadalbin- Perth Cent. School Dist., 91 NY2d 577
  • Matter of Washington Post Co. v New York State Ins. Dept., 61 NY2d 557
  • Loehr v New York State Unified Ct. Sys., 150 AD3d 716

Applying those principles, the Court treated General Municipal Law § 854(4) as unambiguous because “project” is defined broadly and includes property “suitable for ... commercial ... purposes or other economically sound purposes,” and is introduced with the expansive phrase “including, but not limited to.”

The petitioners’ core interpretive argument—residential housing is not listed, therefore excluded—was rejected as a misuse of expressio unius est exclusio alterius. On that point the Court relied on:

  • Matter of Cahill v Rosa, 89 NY2d 14 (lists following “shall include” are illustrative, not exhaustive)
  • Hartman v Goldman, 84 AD3d 734 (the phrase “including, but not limited to” signals breadth)
  • Red Hook Cold Stor. Co. v Department of Labor of State of N.Y., 295 NY 1 (use of “including” broadens rather than narrows)
  • Colon v Martin, 35 NY3d 75 (expressio unius as an interpretive maxim used in ambiguity)
  • Matter of Doniger v Rye Psychiatric Hosp. Ctr., 122 AD2d 873 (the word “including” is designed to broaden the concept defined)

The opinion’s footnote further anchored the meaning of expressio unius in Matter of Benjamin v New York City Empl. Retirement Sys., 170 AD3d 714.

3. Use of legislative history and “related authority” to confirm textual reading

Although the Court stated legislative history was unnecessary given unambiguous text (citing Nadkos, Inc v Preferred Contrs. Ins. Co. Risk Retention Group LLC, 34 NY3d 1), it nevertheless used:

  • Governor Rockefeller’s Memorandum approving L 1969, ch 1030 (communities use IDAs to attract industry and create jobs)
  • Comptroller’s advisory opinion: 1985 Ops St Comp No. 85-51 (housing may qualify when it promotes employment opportunities and prevents economic deterioration)

The Court also drew support from “sister department” authority on non-enumerated projects:

  • Nearpass v Seneca County Indus. Dev. Agency, 152 AD3d 1192 (casino eligible; deference and rational-basis review)
  • Matter of American Rock Salt Co. LLC v Commissioner of Taxation & Fin. of the State of N.Y., 104 AD3d 12 (broad reading of § 854(4) given “including, but not limited to”)

Finally, it cited nisi prius decisions specifically addressing residential development:

  • Triple S Realty Corp. v Village of Port Chester (Sup Ct, Westchester County, Aug. 20, 1987, Walsh, J., index No. 22355/86) (residential construction may qualify if it increases employment and prevents economic deterioration)
  • Matter of Ryan v Town of Hempstead Ind. Dev. Agency (Sup Ct, Nassau County, Jan. 27, 2017, Brown, J., index No. 5324/16) (residential project can be within Act when it promotes employment and combats economic deterioration)

B. Legal Reasoning

  1. Identify the legal constraint: An IDA determination fails under CPLR 7803(3) if it is irrational, arbitrary and capricious, or outside statutory authority.
  2. Read the operative statutory text broadly: The Court treated the definition of “project” in General Municipal Law § 854(4) as intentionally expansive—especially “including, but not limited to” and “other economically sound purposes.”
  3. Reject exclusion-by-omission: Because the statute’s list is explicitly non-exhaustive, the absence of “residential” is not an exclusion. The Court further declined to infer exclusion from legislative inaction (failure to amend), characterizing petitioners’ position as “conflat[ing] ... legislative inaction with an intent to exclude.”
  4. Tie project eligibility to the Act’s stated purposes: The Court repeatedly returned to the Act’s economic-development aims in General Municipal Law §§ 852 and 858—preventing unemployment and economic deterioration, promoting job opportunities and economic welfare.
  5. Demand a record-based rationale, not a label: While the opinion allows residential projects to qualify, it does so on the condition that the IDA rationally found, on a developed record, that the project advances the Act’s purposes. The Babylon IDA’s record included a public hearing and review of an environmental report, a regional economic development council report, and an economist’s report, supporting findings about job promotion, revitalization, and economic distress.

The doctrinal “rule” emerging from the opinion is functional rather than categorical: the key is not whether a project is “residential,” but whether the IDA rationally finds it to be an “economically sound” project that promotes employment opportunities and prevents economic deterioration within the Act’s framework.

C. Impact

  • Second Department precedent on housing and IDA authority: The decision supplies controlling appellate guidance (within the Second Department) that affordable senior housing may qualify as a “project” under General Municipal Law § 854(4), even though housing is not expressly listed, where the IDA rationally links the development to employment and anti-deterioration objectives.
  • Greater practical latitude for IDAs in mixed-use and revitalization strategies: By emphasizing “including, but not limited to” and “other economically sound purposes,” the opinion supports IDA use for projects that are not traditional industrial facilities, provided the record demonstrates statutory purposes (jobs/economic welfare/deterioration prevention).
  • Record-building becomes decisive: Future challengers may focus less on categorical exclusions and more on whether the IDA’s findings are supported by concrete evidence (economic impact analyses, employment projections, distressed-area findings, nexus to broader revitalization plans).
  • School district and municipal finance tension likely to persist: The case arises from a school district’s challenge to long-term abatements. The decision may encourage further PILOT and abatement structures for housing projects, potentially prompting more litigation over rational basis, statutory purpose, and process (hearings, SEQRA documentation, and documented economic rationale).

IV. Complex Concepts Simplified

CPLR article 78 / “arbitrary and capricious” review
A court does not decide whether it would have approved the project. It asks whether the agency’s decision had a rational basis and stayed within the law. If the agency’s reasoning is reasonable and grounded in the record, the court generally upholds it.
Deference to an agency’s interpretation
When an agency administers a statute, courts often uphold the agency’s interpretation if it is reasonable—especially in technical or policy-laden areas like economic development—unless the agency clearly exceeded its authority.
“Including, but not limited to”
This phrase signals that the list that follows is only a set of examples. It prevents an argument that anything not listed is automatically excluded.
Expressio unius est exclusio alterius
An interpretive maxim sometimes used when a statute lists items: the inclusion of some may imply the exclusion of others. The Court held it does not apply where the statute expressly indicates the list is non-exhaustive (“including, but not limited to”).
“Project” under General Municipal Law § 854(4)
The statute defines “project” broadly to include various kinds of facilities and property for commercial/industrial/etc. uses and, importantly, “other economically sound purposes.” The Court treated affordable senior housing as potentially falling within that broad category when linked to statutory economic goals.

V. Conclusion

Matter of Wyandanch Union Free Sch. Dist. v Town of Babylon Indus. Dev. Agency establishes, for the Second Department, that an IDA may lawfully treat an affordable senior housing development as a qualifying “project” under General Municipal Law § 854(4) where the agency rationally finds—based on a developed record— that the project promotes employment opportunities and combats economic deterioration. The opinion’s central interpretive move is textual: “including, but not limited to” and “other economically sound purposes” foreclose an exclusion-by-omission theory and permit IDAs to approve non-enumerated project types, so long as the statutory purpose is meaningfully served and the determination is rational rather than conclusory.