Amid a housing crisis, religious groups are opening up land to build homes

Emma Budway, a 26-year-old autistic woman who is largely nonverbal, lived with her parents in Arlington, Virginia. She longed for a place of her own, but because she earned little income, she couldn't afford to move. So when the opportunity arose to move into a two-bedroom apartment in December 2019, she jumped at the chance.

Now Mrs. Budway lives in Gilliam place, an affordable housing complex built on property owned by Arlington Presbyterian Church. “My world has gotten so much bigger,” she said.

Ms. Budway is capitalizing on a growing real estate trend: Across the country, faith-based organizations are redeveloping unused or abandoned facilities to help address a housing affordability crisis while fulfilling their mission to do good in the world .

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

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

Yet the challenges are piling up. As more houses of worship venture into affordable housing, they face resistance from parishioners, a “not in my backyard” response from local residents and questions about the solvency of lenders. They are also hampered by their lack of real estate development expertise. But as 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. According to Realtor.com, a real estate site, the United States has a housing shortage of 2.3 million to 6.5 million. Another estimate, from the National Low Income Housing Coalition, an affordable housing advocacy group, suggests there is a shortage of 7.3 million affordable units for low-income renters.

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

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

The story is similar across the country. Up to 100,000 Christian church buildings will be sold or repurposed over the next decade, says Mark Elsdon, a pastor and developer in Madison, Wisconsin. “That's a quarter to a third of all churches in the United States,” he added. “Not everyone has 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 buildable land, according to a recent report from the Terner Center for Housing Innovation at the University of California, Berkeley. San Diego alone has more than 10,000 acres of church property, said Evan Gerber, a developer and consultant for Yes in God's Backyard, a group that seeks to develop affordable housing from faith-based properties.

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

In an effort to increase revenue and do good, faith-based organizations are increasingly turning to their unused land and underutilized 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 community started asking itself, 'What is our purpose?'” Ms. Goff said. “It's a big, existential question, and they felt like affordable housing was an issue they could do something about.”

The congregants decided to raze their place of worship, sell the land for $8.5 million and build something new. Along the way, the church partnered with Arlington Partnership for Affordable Housing, a nonprofit developer. The church now rents 173 affordable homes on Gilliam Place, which is home to 500 people, including Mrs. Budway.

State and local governments also recognize 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 improve the way religious institutions that want to help solve the housing crisis in the state will be able to develop affordable housing on their property.”

Similar bills were passed in California in October and in Seattle in 2019 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 Buying is one small step in the journey, said the Rev. David Bowers, vice president of the faith-based development initiative for Enterprise Community Partners, a national nonprofit developer. “There is NIMBYISM, zoning approval,” he said. “It's the nature of the beast.”

Then there is the financing question. Banks are “hesitant to do business with churches for fear of default,” said Bishop RC Hugh Nelson, lead pastor of the Ebenezer Urban Ministry Center in Brooklyn, who worked with Brisa Builders Corporation on Ebenezer Plaza, a project that will include 523 affordable apartments includes, 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 endurance. Ebenezer Plaza lasted nearly a decade: The church had raised enough money to buy two city blocks in Brownsville for $8.1 million in 2011, but the project was delayed, including buying out 22 existing tenants, environmental cleanup and a rezoning process. Construction workers started work in 2018 and three years later the residents were finally able to move in.

IKAR, a Jewish community in West Los Angeles, is creating 60 apartments for the elderly who were previously homeless. “We're in 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 those organizations may not be real estate focused, 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 worked several jobs in a distribution warehouse, but was injured in a motorcycle accident and uses a wheelchair.

In his new one-bedroom, “my nurse's assistant and the doctors can come to me every day,” Mr. King said. “Otherwise I will have to go to a nursing home, and I don't want that.”

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

“Once our property was rezoned, all the properties around us increased in value,” Bishop Nelson said of Ebenezer Plaza. And church members are cleaning up the entire block, he added. “We want that space to reflect what Brownsville could look like when locals take ownership of their community,” he said.

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