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A tsunami of emptying houses of worship—up to 100,000 according to one religious source—is washing across America. Developing intelligent reuses and redevelopments for these properties will make the difference between a community flourishing and struggling. Housing advocates view underused faith properties as natural sites to develop projects that help close the great national gap on affordable housing.

Many religious groups face a great mismatch between small, aging congregations and large, deteriorating properties. Thousands more are struggling to find new uses for their surplus space in ways that extend their missions and defray operating expenses.

The U.S. is estimated to have a deficit of affordable housing of 7.3 million residences. While the amount of money provided by the U.S. Department of Housing and Urban Development and state and local agencies for affordable housing is slowly increasing, the funding is a drop in the bucket compared with demand.

Pairing the surplus of faith properties with the deficit of affordable housing appears to be a match made in heaven. Although America could already boast several successful affordable housing projects in and around former faith properties over the past decades, there’s a renewed interest in church-to-housing among faith communities, municipalities, the real estate industry, and not-for-profits.

Conversion barriers

Barriers to conversion strategies exist. All too often houses of worship are stricken immobile by their declining congregations. Convincing an elderly congregation to close or even alter the sacred places where they were married, their parents were memorialized, and their children were baptized can be a heavy lift. Faith leaders are schooled in neither real estate nor finance in divinity schools, and sometimes find it anathema to their beliefs.

Municipalities are handcuffed by outdated zoning ordinances, building codes, and property-tax regulations that assume vital houses of worship, not struggling properties. NIMBY neighbors fear turning a peaceful-if-struggling house of worship into a multifamily, mixed-use development, professing fears of noise, traffic, and public safety.

Real estate professionals are impatient with torturous negotiations with faith institutions and uneven regulation by municipalities, as time is money. Graveyards on faith properties and reversionary clauses in church deeds can add even more complications.

Yet the opportunities can outweigh the threats. The Terner Center for Housing Innovation at the University of California at Berkeley estimates that in California alone, faith-based organizations and not-for-profit colleges own more than 170,000 acres of land that could be developed into affordable housing or other uses—nearly five times the size of the City of Oakland.

Affordable-housing project examples

Plenty of good examples exist and are underway of turning faith properties into affordable housing.

• In a much-cited initiative, The Emory Fellowship, a United Methodist Church in Washington DC, in partnership with the not-for-profit group, Emory Beacon of Light, built the $58 million Beacon Center on church property. The project features 99 units of housing for low-income DC families and permanent supportive housing, underground parking, multipurpose rooms, a gymnasium, office space, community space, and a culinary arts training program.
• As part of the more recent wave of redevelopments, Atlanta First United Methodist Church in partnership with Evergreen Real Estate Group of Chicago, has broken ground on a “God-sized” mixed-use development including 320 housing units—85 percent designated affordable—a new headquarters for the church’s Atlanta First Day School and 10,000 square feet (929 square meters) of new retail space.
• In bold announcements, the presiding bishop of the Church of God in Christ, the largest evangelical, predominantly African American denomination in the U.S., last year announced a partnership with Enterprise Community Partners with the goal of leading to 18,000 new affordable rental and ownership housing units and 72 community facilities. And the bishop of the Episcopal Diocese of Los Angeles last year announced the goal of building affordable housing for low-income families, seniors, refugees, and unhoused people on 25 percent of the diocese’s 133 church campuses.

Policy examples

Localities and even states have begun to organize legislation not only to lower redevelopment barriers but also to assist faith organizations willing to consider affordable housing initiatives.

• Citizen action: San Diegans have launched a YIGBY (“Yes in God’s Backyard”) movement to provide a counterweight to NIMBY (“Not in My Backyard”) groups. The YIGBY team describes itself as “an action-based, collaborative group of cross-sector professionals called to address San Diego’s housing crisis by activating abundant, under-utilized faith community properties.” The movement is spreading nationwide.
• City legislation: The cities of Atlanta, San Antonio, and Seattle, notable among others, have forged initiatives to encourage faith institutions to consider building affordable housing on their surplus properties. The initiatives can include planning assistance, pre-development money, and density bonuses for affordable housing development.
• State legislation: The State of California last year passed SB 4, the Affordable Housing on Faith Lands Act, which makes it legal for faith-based institutions and non-profit colleges to build affordable, multifamily homes on lands they own by streamlining the permitting process and overriding local zoning restrictions.

ULI TAPs

Some not-for-profit as well as private-sector firms have reached out to houses of worship to help lead them down the reuse and redevelopment path toward improved mission and financial solvency. The Urban Land Institute’s Technical Assistance Programs (TAPs) of two of its District Councils have added greatly to the dialogue on reuse and redevelopment of houses of worship.

• A North Florida District Council technical assistance panel in 2016 analyzed the downtown-adjacent neighborhood in Jacksonville dominated by five churches. Its report, St. John’s Cathedral Cathedral District, recommends that community and church leaders form a special district organization and plan, with an emphasis on providing affordable housing.
• An Atlanta District Council technical assistance panel in 2022 examined the significant property portfolio of All Saints’ Episcopal Church in the bustling Midtown area. The report, Creating Sacred Oasis, suggested ways for the church to both increase their community impact and gain operating revenues.

Other uses

Some faith institutions have reused or redeveloped their properties into uses other than affordable housing while maintaining their need for a religious connection. A site far from mass transit or grocery stores, near natural or human-caused hazards, or surrounded by litigious neighbors can be compelling reasons for a faith institution to opt for a direction other than affordable housing.

• The Village @West Jefferson in Louisville is a 30,000 square foot (2,787 square meter) office and retail development at the site of St. Peters United Church of Christ in the primarily African American Russell neighborhood.
• Centre St. Jax in Montreal, formerly St. James the Apostle Anglican Church, has been transformed into the home of a not-for-profit circus company, a food mission, a refugee-serving agency, and a homeless-serving agency, in addition to hosting church services.
• At a less development-intensive level, St. James United Methodist Church in Brick, New Jersey, is one of dozens across the U.S. that has converted its underused church hall into pickleball courts, providing the church with a new audience as well as additional operating revenues.
• In many cases, shrinking houses of worship have reached out to growing religions and denominations, especially those organized by immigrants, to use their facilities, sometimes transferring or selling the properties at below-market value to the new congregations.

Many non-religious organizations face challenges like those of houses of worship. Veteran-serving organizations, such as the American Legion and Veterans of Foreign Wars, fraternal clubs such as the Freemasons and Knights of Columbus, and family not-for-profits, such as the YMCA and YWCA, often face dwindling memberships and expansive properties in urban and suburban locations.

Reuse and redevelopment challenges are extremely different in communities with hot real estate markets and those less robust.

Future needs

As excellent as some individual house-of-worship reuse and redevelopment projects have proved to be, the vast number of emptying churches—and the accompanying need for affordable housing—suggest that the public, private, and not-for-profit sectors need to adjust to deliver the breadth and depth of projects that are necessary.

Following are five adjustments that could be made:

• Embrace the huge scope of the problem: What empty department stores were to communities over the past 3-4 decades, emptying houses of worship are over the next couple of decades, only the challenges are wider, more intense, and more problematic. As much as we should celebrate local victories (most in hot real-estate markets), the giant scope of the challenge requires resources—people, time, and money—on a grander scale.
• Transition faith institutions into the real-estate business: They own billions of dollars’ worth of real estate but manage most of it as an afterthought. We need to convince faith institutions to be as much in the real estate business as in the religion business.
• Develop a new model for houses of worship: Using large properties only once or twice a week is a bad use of valuable resources. Among the central arguments of Jane Jacobs’ “The Death and Life of Great American Cities,” Great American cities embrace four factors: a mix of uses, short blocks, aged buildings, and high densities. Houses of worship that are unwelcoming, single-use, fenced-in fortresses should be a thing of the past.
• Update municipal regulations: Municipalities regulate reuse and redevelopment of houses of worship through zoning regulations, building codes, and historic preservation ordinances. Many are outdated and assume the healthy, single-use houses of worship of times past. States desperate for affordable housing have begun to show their frustrations with local governments by passing legislation that overrides local laws.
• Provide incentives: Faith-related redevelopment projects require government incentives at the local, state, and federal levels. Most traditional affordable housing developments require a Rubik’s Cube of several funding sources—grants, loans, tax credits, land write-downs, and the like—and much of the funding is hard to come by. With its further complications, redeveloping a house of worship requires even more.