Faith Institutions as Untapped Housing Developers in the US

US communities grappling with persistent housing shortages are increasingly looking beyond traditional development models, with a recent analysis highlighting faith institutions as a significant, yet often overlooked, asset. These organisations, which include churches, synagogues, mosques, and temples, possess substantial landholdings and a deep-rooted presence in neighbourhoods, positioning them uniquely to contribute to housing supply through local stewardship and incremental development.

The argument presented by Strong Towns suggests that faith institutions are community anchors with existing infrastructure and proximity to schools and transit, making their land ideal for housing that integrates seamlessly into established areas. This approach could provide a vital new avenue for increasing housing opportunities, particularly in locations where housing is most acutely needed.

Faith-owned properties have historically served as more than just places of worship; they are often hubs for essential community services, learning, and social gatherings. A significant portion of the support provided by these congregations extends beyond their membership, indicating a broader mission of community service that could encompass housing provision.

Land Ownership and Potential

Nationwide, religious institutions own an estimated 2.6 million acres of land, according to the Lincoln Institute for Land Policy. This vast land inventory presents a considerable opportunity for various housing typologies. Potential developments range from transforming underutilised parking lots and vacant land into apartment buildings, to adapting empty sanctuaries into residential units or converting fellowship halls and classrooms into condominiums, all while potentially preserving historic architectural character.

While some faith communities have engaged in large-scale projects, the greatest untapped potential lies in smaller, incremental developments that align with existing neighbourhood patterns. Examples cited include the Collister United Methodist Church in Boise, Idaho, which developed two rental homes at below-market rates, and a historic church in Baltimore converted into 10 live/work units. In Philadelphia, the Old First Reformed United Church of Christ successfully created 34 units of supportive housing on a former parking lot, even relocating a historic house to accommodate the development.

Research conducted by Smart Growth Maryland analysed faith-owned properties in designated growth areas, identifying over 8,000 parcels. If even a portion of this land were developed with “missing-middle” housing (single-family, duplex, triplex, quadplex – around 15 units per acre), it could address a significant percentage of a state’s housing gap. Similar analyses in other states indicate comparable potential.

A Different Time Horizon

A key differentiator for faith institutions as developers is their long-term perspective. Unlike typical developers who may hold property for a few years, congregations often steward land for generations. This generational ownership means their development goals are less focused on immediate maximum returns and more on sustaining their mission and community well-being. This stewardship could foster housing that is smaller in scale, more context-sensitive, and aligned with local priorities, offering an alternative to the dominant models of large suburban subdivisions or corporate-led multifamily developments.

Challenges to Development

Despite the potential, several significant barriers hinder faith institutions from readily undertaking housing development. These include zoning regulations, a lack of technical capacity, and financing complexities.

Zoning often presents the primary and most unpredictable obstacle. Many faith institutions occupy land zoned for “institutional” or “residential” uses where housing development is heavily restricted or entirely prohibited. The legacy of zoning practices, rooted in cases like Village of Euclid v. Ambler Realty, has led to vast areas being zoned exclusively for single-family homes, limiting flexibility for adaptive reuse or new housing construction on institutional land.

Furthermore, congregations facing declining membership and financial pressures may find it challenging to muster the resources and expertise needed for complex development projects. The closure of religious institutions, which is projected to affect tens of thousands of churches in the coming decades, adds another layer of complexity. While property from closed institutions could be adaptively reused, the process is often fraught with difficulties, regardless of whether the faith institution retains ownership or the property changes hands.

The Archdiocese of Baltimore’s recent announcement of closing nearly half its city parishes, for instance, raises concerns about the future of these substantial properties and their potential for community benefit, including housing.

Key facts
| Factor | Detail |
|—|—|
| Land Ownership | US faith institutions own approx. 2.6 million acres. |
| Development Focus | Incremental, small-scale housing projects are seen as the greatest untapped opportunity. |
| Barriers | Zoning restrictions, technical capacity, and financing are major hurdles. |
| Potential Impact | Faith-owned land could contribute significantly to addressing housing gaps. |

The implications for urban planning and housing policy are substantial. Recognising faith institutions as potential developers could lead to policy reforms, such as zoning changes to permit greater density or mixed uses on institutional land. Capacity-building initiatives and financial support mechanisms could also help faith communities overcome the technical and financial challenges of development. By unlocking this potential, cities could foster more diverse housing options, strengthen community ties, and promote more equitable development patterns, all while supporting the enduring missions of faith-based organisations.

Source: Strong Towns, “America’s Most Overlooked Developer: Local Churches”, https://www.strongtowns.org/journal/americas-most-overlooked-developer-local-churches

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