For Churches, Bigger Isn’t Always Better
Why the large scale development model of faith-based housing might not work
The Faith-Based Housing Initiative, where this article originally appeared, is a program of Southern Urbanism that trains faith-based organizations to build mission-based housing on their land.
Soon, Caldwell Presbyterian in Charlotte, North Carolina will move tenants into 21 studio apartments next door to its main sanctuary. Over the past seven years, the congregation has navigated the development process to successfully convert a 100 year old auxiliary building into “Easter’s Home,” which will house low income people in a supportive community.
If you search for faith-based housing projects, you will not find many projects like Easter’s Home.
What you will find are scores of large buildings, often five or six stories, developed by affordable housing developers. These buildings usually have dozens if not hundreds of units, requiring a hodgepodge of government grants, tax credits, and outside funding to finance projects costing tens of millions of dollars. Often located in large cities, these low or mid-rise buildings are the primary model for the ever-growing YIGBY (Yes in God’s Backyard) movement, which promises to both alleviate the housing crisis and help struggling congregations with much needed cash they need to survive.
Yet if the YIGBY movement is to be successful, it will need more flexibility.
Hundreds of units are not appropriate in all settings, especially for rural and suburban churches, and out of scale development can (and does) trigger community backlash. Neighborhood scale village style developments offer an alternative that is far more adaptable and attainable in a variety of settings. Also, churches are interested in missions more than affordability, including senior housing, developmentally disabled housing, refuge housing, etc. These smaller scale projects can be tailored to a neighborhood and its surrounding housing needs, making for a style of development that could be more resilient, personal, and effective.
A Clear Problem: Churches Are Not Developers
The primary reason faith-based housing projects of the past have been so large is because faith-based institutions find it difficult to act as developers. Churches lack the expertise to navigate the complicated development process. If a house of worship does decide that it wants to enter into the housing market, it typically concludes that it will need to lean on established developers. In many cases, this means that the congregation takes a backseat in the process, losing some amount of their influence. Such a partnership varies from case to case, but usually involves the church either signing a long-term ground lease or, most commonly, selling the land outright to the developer. This means that the congregation risks losing control of the project and the future of their community.
Developers want to build big. Often they have to.
Most importantly, these partnerships have a high threshold for entry, requiring larger projects to succeed. Developers, especially affordable housing developers, need to build big to make their numbers work. A larger project offers a larger return with marginally more work, making the decision to build big easy, if not required. Affordable housing developers typically rely on the Low Income Housing Tax Credit (LIHTC), a government program which encourages projects over 50 units. This means that these developments are fairly uniform nationwide, with similar size and aesthetics. It also means that the price tag is giant; one project at Central United Methodist in Arlington, Virginia cost $84 million, requiring a complicated patchwork of tax credits, philanthropy, and loans which are inaccessible to most churches.
Affordable housing developers are very good at what they do, managing to navigate government programs and red tape in order to provide as many units as possible at affordable rates. Their priorities require using economies of scale and complicated financing schemes like LIHTC to build dozens or hundreds of units per project. In an urban area like Arlington, 144 was an appropriate size project for its surroundings. Because the partnered faith-based institution also wanted to prioritize affordability and scale, the developer agreement worked out.
The Flip Side
When faith-based institutions have priorities incompatible with large LIHTC developments, forming partnerships with affordable housing developers becomes more difficult. Projects as simple as building a small community for their parishioners or converting an existing building are not attainable under the large-scale model. The reliance on “capital A” Affordable Housing and its baggage has stifled innovative projects suited to their surroundings, making it difficult for churches to build an intentional, unique community. It is simply not worth the pain and expense of navigating the LIHTC process for anything smaller than 50 units.
In fact, the sheer scale of today’s macro faith-based housing can have a negative effect on building intentional community and, in fact, few of the faith-based developments built recently have any physical connection to their originating church. When congregations are primarily presented with the LIHTC model, it becomes harder to envision creative, tailor-made solutions for their specific needs.
Alternatives (Easter’s Home)
So what, then, is the alternative? The few churches that do manage to succeed in building smaller projects, such as Easter’s Home in Charlotte, North Carolina, do so because they have expertise within the congregation. Easter’s Home, a project of Caldwell Presbyterian Church, recently converted an old building on-site into 21 units for low income people. Though they received assistance from developers, the congregation was the driving force of the project, a critical differentiator from how most Faith-Based Housing is being done today. Self-performance ensured that the project stayed on track and centered their priorities.
Because they did not turn their land over to a larger developer, the Caldwell congregation will retain control over the ownership and operation of Easter’s Home. This will facilitate greater interaction with the residents, offering more support and community than a large scale project. Furthermore, the small scale meant a $6 million price tag that pales in comparison to the tens of millions typical of larger faith-based development. They were able to raise this money through philanthropy and grants, avoiding more complicated financing and finishing the project debt-free.
Easter’s Home is the exception, not the rule. Yet it shows that there are options outside of an affordable housing partnership where the faith-based institution simply provides the land. This is not to say that affordable housing partnerships are bad, but rather that they are problematic in many settings. In order for the YIGBY movement to realize its full potential, we need a rapid expansion of smaller projects like Easter’s Home. These projects will be more adaptable to the needs of a congregation and neighborhood, providing an unprecedented diversity of models to learn from and ultimately more success in the long run.
Thank you for this article! I've been mulling lately on church as a place where community is built (and the gaps that it absence can leave) and this gave me more to think about. Keep writing!