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Churches use buildings to address affordable housing crisis

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Friday, July 20, 2018 8:59 PM
Associated Press file

For churches faced with shrinking congregations and underutilized buildings, installing affordable units offers a fresh infusion of cash and a better way to serve the community.

WASHINGTON – Helen McIlvaine gets excited when she sees a church.

Driving around her hometown of Alexandria, Virginia, on a bright and sunny morning, McIlvaine slowed the car at white spire after white spire. She turned her head, cocked an eyebrow and scrutinized each red-brick square on its grassy plot.

“I sort of go past everything and say, ‘That could be affordable housing,’” McIlvaine said. “I go past a Scottish Rite temple and say, ‘Do they really need all that land?’ Once you start looking, you can’t stop – there are opportunities everywhere.”

Land for affordable housingOver the past five years, McIlvaine has proven her own maxim. In her work for the city of Alexandria – where she serves as director of housing – she has shepherded four churches through selling or leasing all or part of their land and converting it to space for affordable housing. At least two more churches are “in the pipeline,” McIlvaine said.

And it’s not just Alexandria. Churches across the District, Maryland and Virginia are turning their properties into living space for low-income residents. David Bowers, vice president of the nonprofit group Enterprise Community Partners, said his organization helped seven houses of worship in the Baltimore-Washington corridor do this in the last 12 years.

Enterprise is working with two dozen more churches.

Bowers said the Mid-Atlantic region has become a national leader in this arena, pioneering a faith-based solution to the dearth of affordable housing that advocates around the country are beginning to imitate. He and others at Enterprise – which formed its Faith-Based Development Initiative specifically to encourage this tactic in 2006 – hope to bring the strategy to cities across the nation.

Proponents say churches are ideally suited to build affordable housing. Houses of worship often sit on valuable land but are less concerned with cutting the best deal possible, thus minimizing costs borne by nonprofit developers. And, for churches faced with shrinking congregations and underutilized buildings, installing affordable units offers a fresh infusion of cash and a better way to serve the community.

“In Matthew 25, we are called to feed the hungry, clothe the naked,” said the Rev. Sam Marullo, a former professor at Washington’s Wesley Theological Seminary, at a forum on faith and affordable housing in the District of Columbia in June. “I would add in to that Matthew 25 quote, ‘Build housing for those that need housing.’”

Convincing the skepticsWhen McIlvaine walked through the door of Alexandria’s Office of Housing in 2006, no one there was thinking about churches.

But she couldn’t get them off her mind. McIlvaine had just completed a stint at the Arlington Partnership for Affordable Housing, where she had launched the First Baptist Church of Clarendon on its long and contentious – but ultimately successful – fight to build affordable units on its land. Clarendon was one of the first churches in the area to try its hand at affordable housing, and McIlvaine wanted to keep a good thing going.

She felt churches were the future. The faith groups “just have a natural heart for it,” she said.

Initially, though, the idea drew skepticism in the region, Bowers said.

“When we started about 12 years ago, there were a number of folks who were dubious, who would say, ‘These are not developers. Why would we work with a house of worship?’” Bowers said.

He heard these comments from bankers, government officials and affordable housing experts. Over time, though, the wind changed.

The area’s affordable housing crisis deepened as low-income individuals poured into the region while low-income units disappeared. Alexandria offers a typical example: Between 2000 and 2017, upscale redevelopment projects and rising rents in the city slashed by 90 percent the quantity of apartments affordable by individuals who earn about 50 percent of the area median income.

At the same time, churches were facing a crisis of their own. Over the past 60 years, church attendance in the northeast sector of the country has declined. The problem may worsen in years to come: A 2015 study by the Pew Research Center found that religious disaffection is soaring among Americans younger than 30.

The intersection of these trends quelled doubt and made religious leaders and housing advocates willing to risk a new scheme, Bowers said.

“A lot of these faith communities are in crisis. They had their peak attendance in the 1960s, so they have these overbuilt facilities and yet they want to be good stewards of these places they’ve inherited,” said Nina Janopaul, the president of APAH. “So they see this as a win-win – they can right-size their facilities to the size of their congregation and serve their mission at the same time.”

A familiar scriptIn 2013, seven years after McIlvaine’s arrival, the city of Alexandria issued a Housing Master Plan. For the first time in city history, the plan specifically suggested places of worship as a source of affordable housing.

Today, the church-to-affordable-housing pathway is well-established in the Washington region.

Most houses of worship follow the same script, either selling their land outright to a nonprofit developer or signing on to a ground lease, which allows the developer to build and operate the affordable housing units while the church retains ownership of the land beneath. The units built are usually designated for individuals who make 40 to 60 percent of the area median income.

The construction fee is driven down by low-income housing tax credits, which the government grants to affordable housing investments. Still, each unit can cost hundreds of thousands of dollars to build. This means churches and their nonprofit developer partners often face a “gap” in the financing, as McIlvaine calls it – and that’s where the city steps in.

In each of the church projects McIlvaine has undertaken, the city of Alexandria contributed a long-term loan often amounting to several million dollars. McIlvaine said the Office of Housing typically receives a yearly budget of between $4 and $6 million it can dedicate to affordable housing initiatives.

Bowers said local governments around the region are starting to follow in Alexandria’s footsteps and recognize houses of worship as “potential partners” in the battle to create more affordable housing. So are state officials further afield – Bowers said he took a call a few years ago from New York City’s housing department, which wanted to learn how it could better work with the “faith community” in the five boroughs. Enterprise, which boasts offices in San Francisco and Denver, is also hoping to kick-start projects in those places.

“So we are starting to see more of it bubble up in some key places around the country,” Bowers said. “We are intentionally looking to bring it to a number of cities.”

A long processThe sale and construction process is long and taxing, typically requiring between five and seven years to complete, McIlvaine said. To ease the way for would-be builders, Janopaul has developed a seven-step program to guide churches through the construction of affordable units. The steps include “discernment” – during which the church evaluates whether it possesses the necessary resources and vision – as well as team building, a feasibility study, financing, construction and, finally, celebration.

Janopaul said the last step is vital to recognize everyone involved along the way. “It takes a village,” she said.

St. James PlazaJames Henry, the pastor at St. James United Methodist Church in Alexandria, said he would do it again.

St. James in 2015 sold the 3 acres of land it had long owned in the sleepy Beauregard neighborhood to nonprofit developer AHC. Within the next three years, AHC demolished the old church building and replaced it with 93 units of affordable housing dubbed St. James Plaza. The plaza opened its doors to residents in April and has filled up rapidly. John Welsh, the vice president of AHC, estimated the apartment complex will be fully occupied by early August.

As for Henry and his congregation, St. James bought and renovated a new building – much smaller than the old church – on a smaller piece of land a few hundred yards from St. James Plaza. The old church had a seating capacity of 120; the new building seats 80.

He said the decision to sell the land has had a “really positive impact” on the local community. But he acknowledged the path to sale was at times difficult.

Longtime Beauregard residents were upset at the idea that “the quiet church at the end of the street” would make way for a new housing complex, potentially heralding increased traffic and less space for parking. Some churchgoers also found the prospect distasteful.

Henry said the church probably lost 10 to 15 percent of its congregation during the move.

Now, though, St. James has begun to recover. It’s drawn an influx of new members, some of whom told James they joined because they appreciated the church’s efforts to live out its mission by building St. James Plaza.

“The truth is, the origins of the church were building-less, Jesus was walking around with people, and there were no buildings – in the end it’s really about the people,” Henry said. “I think the congregation is actually stronger now.”

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