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April 17, 2023

The New York Office of Mental Health Is Creating Historic Opportunities for Housing Providers—Don't Forget About the Padavan Law!

New York State Governor Kathy Hochul and the New York State Office of Mental Health (OMH) Commissioner Ann Marie Sullivan have announced a plan to invest $1 billion to enhance behavioral health programming of all types and to plug gaps in the continuum of care. A big part of this plan involves expanding residential opportunities for people with behavioral health needs. This expansion will result in 500 new single-room-occupancy community residence units, 900 new transitional housing units, and 600 new licensed apartment treatment units statewide.1  What these housing categories all have in common is that they require OMH licensure and, consequently, must undergo a process called “site selection.” 

Site selection is a statutory process that requires residential programs to obtain community approval pursuant to Section 41.34 of the New York Mental Hygiene Law (MHL) prior to license approval. The statute is commonly referred to as the Padavan Law, after state senator Frank Padavan, who introduced the law and fought for its passage in 1978. It applies to community residential facilities serving between four and 14 people and that are licensed by OMH.2  For providers, municipality approval comes with a huge benefit—waiver of local zoning restrictions, which allows programs to be located in residential neighborhoods, from which they would otherwise be excluded.

An agency wanting to establish a residential facility must apply for approval from the municipality where the program will be located. Municipality in this context means an incorporated village or city, if there is one, otherwise the township. In the City of New York, municipality means the community board with jurisdiction over the location. The municipality can approve the location for the facility, suggest a different location, or object to the location on the grounds that allowing the new facility would result in such a concentration of similar facilities in the community that the character of the community would be substantially altered.3

The statute provides for community public hearings and opportunities for objecting communities to propose alternative locations for new facilities. In most cases, providers and municipalities cooperate to resolve any disputed issues and work together to create what is essentially a resource benefitting the entire community. If objections are not resolved, litigation opportunities are included, first in the form of a public hearing before the OMH; if either party is unsatisfied at that point, they can bring an Article 78 proceeding in state court.

The challenging thing for housing providers hoping to establish new residential programs is that Padavan Law compliance can be a moving target. The critical inquiries are whether: 1) the quantitative criteria for applicability are met and 2) the number of residential treatment facilities in a community have reached the point of unwanted saturation. 

For a traditional community residence model, the question of applicability is easy. Does the program house between four and 14 people? For scattered-site or apartment treatment programs, it is a trickier analysis. Clearly one two-person apartment doesn’t qualify, but do two two-person apartments in a building qualify? The answer is maybe. It depends on a number of factors. For example: How many apartments are there in the building in total. If it is a two-unit apartment building, then the statute would probably apply. If there were two two-bedroom apartments in a building containing 100 apartments in total, the statute might not apply, and there are countless possibilities in between. Historically, the OMH has made ad hoc determinations based upon the specific facts of the situation, but there are no bright lines and no promulgated guidance.

Whether new units in a community would create the prohibited saturation is an even more elusive question. Initially, it is really up to the municipality. If the municipality approves the new units, there is no issue. If the municipality objects, then the provider must identify all of the other existing facilities in the surrounding community and put forth convincing arguments that one more of these facilities will not change the character of the community. Often, many of the factors that must be established are subjective or at least relative: what constitutes the community for purposes of the analysis, what constitutes an alteration of the nature of the community, and so on. Even more uncertain is what will happen with such a massive influx of new housing units. A provider with apartment treatment units in a building that have been determined to not meet the applicability threshold may in fact meet it when new licensed apartments are added. Communities in which facilities have been approved without objection in the past may seek to impose limitations impacting efforts to establish new programs, and so on. 

The historic expansion of housing opportunities is good for the state, is good for communities and, most importantly, will provide stability and homes for thousands of people with behavioral health challenges. It is reasonable to expect communities to realize this and embrace the opportunity in most cases. However, the scale of the expansion and the potential complexity of the process suggest that current housing providers as well as providers who will be expanding their service array to include license housing for the first time should make Padavan Law compliance part of their strategic planning form the start. Providers should consult with their attorneys to assist in resolving issues and removing barriers before they ripen into conflict and litigation, which can jeopardize their ability to take advantage of these historic opportunities. 

1 The governor’s proposal also calls for the addition of 1,500 supportive housing units statewide. Supportive housing units are not licensed and, as such, are not subject to the statute. 
2The statute also applies to housing programs licensed by the New York State Office for People With Developmental Disabilities.
3In addition to community concerns about unacceptable concentrations of housing for people with disabilities and its impact on communities, additional support for the statutory process has come from behavioral health advocates, who see concentrations of this type of housing as violating the integration mandate of Olmstead v. Georgia and its progeny, which require residential settings to be in diverse neighborhoods.

If you have any questions about the content of this alert, please contact Keith Brennan, of counsel, at kbrennan@barclaydamon.com, or another member of the firm’s Health & Human Services Providers Team.
 

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