In my last blog post, I highlighted a few of the actions that states have taken to assist churches in the process of converting their property to mission-driven developments such as affordable housing. A few states such as Washington and California have passed statutes ensuring that churches receive favorable treatment with respect to these developments, and similar legislation has been proposed in several other states.
In an effort to meet its current housing shortage, California has led the way on this issue through its passage of the Affordable Housing on Faith and Higher Education Lands Act in 2023. Under certain conditions, this act allows multi-family and mixed-use developments to (1) be considered a “by-right” use on land owned by religious institutions, and (2) to by-pass lengthy environmental review rules thus clearing substantial barriers for churches that may be considering converting their excess property.[1] One study concluded, for instance, that 170,000 acres of land would be covered by the act.[2] This law built on earlier reforms which reduced or eliminated parking reforms for religious institutions pursuing affordable housing developments.[3]
Relatedly, the state of Washington passed legislation requiring local governments to provide density bonuses for religious organizations seeking to develop affordable housing for persons making up to 80% of the Area Median income (AMI). After Seattle expanded these incentives through the passage of an ordinance reducing the threshold to 60% AMI, the Lutheran Church of the Good Shepherd decided to construct a 92-unit residential building in downtown Seattle.[4]
Other states have legislation on the table that would provide similar incentives for religious institutions. For instance, in New York the Faith-Based Affordable Housing Act (S7719A) would allow for qualifying affordable housing developments to be considered “by right.” Additionally, both Texas[5] and Arizona[6] have bills before their state legislatures that have been proposed this year.
Dalton & Tomich, PLC will continue to closely monitor the developing legal landscape surrounding affordable housing developments initiated by religious institutions. If you are a religious entity seeking a creative way to convert your excess property, we would be happy to help you navigate the various legal incentives and obstacles that might face your project.
[1] Cal. Gov’t Code § 65913.16 et seq. (West)
[2] Conor Dougherty, What would Jesus Do? Tackle the Housing Crisis, Say Some Congregations, NYT (April 27, 2024), https://www.nytimes.com/2024/04/27/business/affordable-housing-religious-organizations.html.
[3] Nadia Mian & Richard T. Reinhard, Transforming Empty Churches Into Affordable Housing Takes More Than a Leap of Faith, American Planning Association (May 5th, 2023), https://www.planning.org/planning/2023/spring/transforming-empty-churches-into-affordable-housing-takes-more-than-a-leap-of-faith/?utm
[4] Id.
[5] Texas Senate Research Center, C.S.S.B. 854 Bill Analysis (March 13, 2025), https://capitol.texas.gov/tlodocs/89R/analysis/html/SB00854S.htm?utm.
[6] Howard Fischer, Arizona Lawmakers Propose Bill Allowing Religious Institutions to Build Affordable Housing, KAWC (February 25, 2025), https://www.kawc.org/news/2025-02-25/arizona-lawmakers-propose-bill-allowing-religious-institutions-to-build-affordable-housing?utm
