Faith communities across the U.S. view developments on their vacant properties as a way to bring in revenue and address the affordable housing crunch in their neighborhoods. But it’s not easy to do, even when elected officials seem eager to help.
Besides the familiar resistance to new development from people who live nearby, housing advocates say that sometimes well-intentioned policymakers put up roadblocks. At other times opposition comes from people who cherish the churches they worship at or live near, and don’t want to see them converted or altered into something unfamiliar.
A law that went into effect in California early in 2024 has been an inspiration for legislators in many other states because it limited local governments’ ability to block housing on property that faith-based groups owned. The law permits at least 10 homes per acre on these sites, ranging from single-family homes to apartments. A 2023 report by the Terner Center for Housing Innovation at the University of California, Berkeley suggested that the law could open up more than 47,000 acres for potential residential development.
But, so far, no project has been set in motion by the law, according to a recent report by California advocacy group YIMBY Law (The name is an abbreviation of "Yes in my back yard." Many people trying to develop homes on these properties refer to their effort as the "Yes in God’s back yard" movement.) The report said many potential projects have been deterred by the law’s requirement that the housing be 100% affordable or priced for less than what it would sell at market rate. That mandate is difficult because it can make it harder for housing projects to work from a financial standpoint.
“Unfortunately, it appears that this bill is not creating the intended ‘easy path’ for faith-based organizations to develop housing,” according to YIMBY Law’s report.
Taking early steps to reform
The Virginia General Assembly appears on the verge of passing legislation to encourage, but not require, local governments to make it easier for faith groups to build housing. House Bill 2153 mandates that if a city, town or county takes advantage of the bill, any housing created needs to be priced affordably for at least 40 years. That means that it’s affordable to people who make less than the area median income and that they don’t spend more than a third of their income on rent or a mortgage.
Though encouraging housing rather than requiring it sounds like a modest gain, Sheila Herlihy Hennessee, Virginia Interfaith Center for Public Policy director of faith organizing, still sees it as a big step. She is the author of the book “Virginia Congregations Building Affordable Housing: A Match Made in Heaven.”
“It means we’re having a lot more conversations about it and offering a path forward,” she said in an interview.
In many states, the biggest obstacle to building housing on these properties is that anything other than a religious institution is not allowed under city zoning rules without a special permit. The local government doesn’t have to grant the permit, which gives it leverage to force changes such as making the housing development smaller. Doing so risks killing the project, however, since it still has to make sense financially. The special permit process also gives neighbors the opportunity to express their opposition at public meetings.
Hennessee said she has seen people challenge projects on church land simply because they don’t want more housing near them. But sometimes the issue is that nearby residents feel a sense of ownership of the property and don’t want it altered.
“In one case, someone said, ‘But that’s where I walk my dog. You can’t get rid of that park.’ But it’s not a public park, it’s [the church’s] land,” Hennessee said.
In another instance in Roanoke, a city in southwest Virginia, a church built in 1903 that had dwindled to 20 active members merged with another congregation and gave up use of its sanctuary so it could be converted to affordable housing for senior citizens. The developer committed to maintaining the exterior’s historical appearance, but losing the church building was still a bitter pill for some to swallow.
“From a neighborhood perspective, it still maintains that grandeur,” Hennessee said. “But the pastor [told me] it definitely required a lot of processing for people who had attended funerals there, and for the neighborhood as a whole.”
One project she said has been successful in addressing neighbors’ concerns is that of St. Elizabeth’s Catholic Church in the Highland Park area of Richmond, the state capital. The 56 affordable homes in the development will be divided among 14 fourplexes, with an architectural style that mimics that of the American Foursquare houses common in the area.
It wasn’t easy to get local buy-in, however. Between 2019 and 2021, the church and its development partner held more than 15 community meetings with neighbors and local officials, according to Hennessee’s book. Approval was also needed from the state’s historic resources agency because the property is in a national historic district. Another issue was cost: Total construction expenses rose from 2021 to 2024 by $8 million to more than $19 million.
Besides making it optional for local officials, housing advocates in Virginia modified their approach to the issue in another important way. They left the word “religious” out of the legislation, mindful of concerns about blurring the line between church and state. The bill simply says, “tax-exempt organizations,” though Hennessee said most of the affected groups are in fact religious.
Kentucky is another state trying to pass a bill to help faith communities build housing. Senate Bill 59 would eliminate appointed local planning and zoning boards from the review process for churches’ housing proposals, though local elected officials would still have to approve them.
Republican Sen. Jimmy Higdon, who sponsored the bill, described planning boards in an interview as made up of “a group of bureaucrats who have very stringent rules, not flexible at all.”
He said the bill has drawn a lot of attention from local officials and churches in cities like Lexington and Louisville interested in building affordable housing and homes targeted for senior citizens.
Legal challenges arise
Besides zoning and affordability issues, there can also be legal challenges to faith organizations’ efforts to build housing on their property. A recent example is Christ Episcopal Church in Portsmouth, New Hampshire, which made plans in 2024 to collaborate with the city’s public housing authority to build up to 44 apartments next to the church building. Part of the church’s motivation is that it has had trouble paying its bills in recent years, and rents from the apartments would contribute much-needed income.
But the deed that conveyed the property to the church in the 1960s says it can be used only for religious purposes and therefore not housing, according to the bank that was entrusted at that time with enforcing the seller’s wishes. The church took the bank to court last month to address the dispute, arguing that building affordable housing was an example of the religious institution fulfilling its mission.
Another complication in some cases is that religious leaders don’t have experience with complicated real estate matters, and they can’t always afford to hire a development partner who can handle them. John Hunt, president of MarketNSight, a company that analyzes development proposals to see whether they’re feasible, has worked in recent years with an increasing number of churches that want to build homes.
“You have to become an expert to distill some complicated topics for people,” Hunt said in an interview. “They’re seeking to find out if it’s going to be good for them and not hurt their church or community.”