Amid a Housing Crunch, Religious Groups Unlock Land to Build Homes

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Emma Budway, a 26-year-old autistic woman who is mostly nonverbal, had been living with her parents in Arlington, Va. She longed for her own place, but because she earned little income, she could not afford to move out. So when the opportunity came to move into a two-bedroom apartment in December 2019, she jumped at the chance.

Now Ms. Budway lives at Gilliam Place, an affordable housing complex built on property that Arlington Presbyterian Church owns. “My world has gotten so much larger,” she said.

Ms. Budway is the beneficiary of a growing real estate trend: Across the nation, faith-based organizations are redeveloping unused or derelict facilities to help rectify a housing affordability crisis while also fulfilling their mission to do good in the world.

With the exception of a few well-heeled churches or synagogues, most religious organizations tend to be land rich and cash poor, said Geoffrey Newman, an executive managing director at Savills, a real estate services company.

“They are analyzing what they can do to alleviate their financial stress and what role real estate plays in that process,” he said. “If the stars align with good property, a robust real estate market, active developers, favorable zoning and forward-thinking institutional leadership, then there’s a wealth of potential.”

Still, the challenges are mounting. As more houses of worship venture into affordable housing, they face resistance from parishioners, a “not in my backyard” reaction from local residents and questions of solvency from lenders. They also are hindered by their lack of expertise around real estate development. But, as the Rev. Ashley Goff of Arlington Presbyterian Church put it, faith-based organizations see the need and feel the pull to “do something bigger than themselves.”

And the need is great. The United States has a shortage of 2.3 million to 6.5 million homes, according to Realtor.com, a real estate listing site. A different estimate, from the National Low Income Housing Coalition, an affordable housing advocacy group, suggests that there is a dearth of 7.3 million affordable homes for low-income renters.

Faith-based organizations can make a dent in the housing crunch, said Ramiro Gonzales, the board chairman of the Impact Guild, a community development incubator in San Antonio whose Good Acres program aims to help churches maximize their property for community benefit. San Antonio has just over 3,000 acres of faith-owned property, a vast majority of which is underused, Mr. Gonzales said during a panel discussion last year on repurposing church property.

That land could be used to house 100,000 families, he said, adding, “It is clearly within the boundaries of what the church already owns to solve this problem on its own.”

Across the nation, the story is similar. Up to 100,000 Christian church properties will be sold or repurposed in the next decade, said Mark Elsdon, a minister and developer in Madison, Wis. “That’s a quarter to a third of all churches in the United States,” he added. “Not all have property, but even if half do that’s a huge number.”

In California, for example, faith-based organizations and nonprofit colleges own more than 171,749 acres of potentially developable land, according to a recent report by the Terner Center for Housing Innovation at the University of California, Berkeley. San Diego alone has more than 4,000 acres of church property, said Evan Gerber, a developer and consultant for Yes in God’s Backyard, a group looking to develop affordable housing from faith-based properties.

And faith-based institutions owned nearly 800 vacant parcels in the Washington metro region, Peter A. Tatian, senior fellow at the Urban Institute, wrote in a 2019 report. If multifamily housing could be built on that land, he concluded, it could support the construction of up to 108,000 new homes.

Seeking to grow revenue and do good, faith-based organizations are increasingly turning to their unused land and underused buildings as a solution to affordable housing. By the time Ms. Goff arrived at Arlington Presbyterian Church in 2018, Gilliam Place was already under construction.

“Our congregation had begun to ask itself, ‘What’s the point of us?’” Ms. Goff said. “It’s a big, existential question, and they had the sense that affordable housing was an issue they could do something about.”

The congregants decided to raze their house of worship, sell the land for $8.5 million and build something new. Along the way, the church teamed up with Arlington Partnership for Affordable Housing, a nonprofit developer. The church now rents 173 affordable homes at Gilliam Place, which houses 500 people, including Ms. Budway.

State and local governments are also recognizing the potential to increase housing stock. Andrew Gounardes, a New York State senator who represents southern Brooklyn, introduced a bill in December that, he said, would “streamline the process and the way in which religious institutions that want to help contribute to solving the state’s housing crisis will be able to develop affordable housing on their property.”

Similar bills were passed in California in October and in Seattle in 2019, and lawmakers in Virginia are drafting a bill based on California’s.

Regardless of state laws, projects often face make-or-break decisions at the local level. Neighborhood buy-in is one small step in the journey, said the Rev. David Bowers, vice president of faith-based development initiative for Enterprise Community Partners, a national nonprofit developer. “There is NIMBYISM, zoning approvals,” he said. “It’s the nature of the beast.”

Then there’s the financing question. Banks are “hesitant to do business with churches for fear of default,” said Bishop R.C. Hugh Nelson, lead pastor at Ebenezer Urban Ministry Center in Brooklyn, who worked with Brisa Builders Corporation on Ebenezer Plaza, a project that includes 523 affordable apartments, 43,000 square feet of sanctuary and ministry space, and 21,000 square feet of commercial space in Brownsville.

And the development process itself requires stamina. Ebenezer Plaza took nearly a decade: The church had raised enough funds to purchase two city blocks in Brownsville in 2011 for $8.1 million, but the project was met with delays, including buying out 22 existing tenants, environmental remediation and a rezoning process. Construction workers broke ground in 2018, and residents were finally able to move in three years later.

IKAR, a Jewish community in West Los Angeles, is in the process of creating 60 apartments for older people who were formerly homeless. “We’re at Year 5, and by the time we’re done it could be six years,” said Brooke Wirtschafter, IKAR’s director of community organizing. “This is not an unusual timeline.”

In addition, “unscrupulous” people looking for deals may target faith-based organizations, assuming these organizations may not be real estate savvy, Bishop Nelson said, adding that he had heard horror stories from other pastors. Early in the development of Ebenezer Plaza, Bishop Nelson returned to school to attend an executive program focused on real estate development at Fordham University.

Richard King, 52, moved into a new apartment at Ebenezer Plaza last year after living on the streets and in shelters (where he won a housing lottery). He had been working a variety of jobs at a distribution warehouse but was injured in a motorcycle accident and uses a wheelchair.

At his new one-bedroom, “my nurse’s aide and doctors can come to me every day,” Mr. King said. “Otherwise, I’d have to be in a nursing home, and I don’t want that.”

The new communities are expected to increase neighborhood value and bring positive changes to residents.

“Once our property was rezoned, every property around us went up in value,” Bishop Nelson said of Ebenezer Plaza. And church members clean up around the block, he added. “We want that space to reflect what Brownsville could look like when local people take ownership of their community,” he said.

For faith-based organizations, this “makes radical common sense,” Mr. Bowers said. “Houses of worship are in every community,” he said. “They often have land in a sea of need — food deserts, affordable housing deserts. If we can bring these organizations together, we can affect change.”



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