Churches Look to Residential Real Estate Development to Support Congregations
Saturday, August 8, 2009
The new apartments in Landover have all the features one expects to find in a luxury complex. There's a state-of-the-art fitness center, a quiet courtyard, nine-foot ceilings and oversize windows.
Residents can use a theater, a barbershop, a beauty salon -- even a chapel.
Yes, a chapel.
The small church, with its plush blue seats, ornate fixtures and pulpit, was included in the architectural plans at the request of the developer: Jericho City of Praise, a 19,000-member congregation in Landover.
"There is just so much to do here, so many amenities," said Eugene Selden, 67, who moved June 16 with his wife, Olivia, to Jericho Residences near FedEx Field.
For years, the faith community has been a driving force in building affordable housing such as the unit where the Seldens live. And despite the recession and the accompanying risk of attempting a project now, Jericho and some other Washington area churches have recently taken their involvement a step further, purchasing properties and partnering with developers or builders to construct communities that can include subsidized units, full-price residences and even commercial space.
Churches have a steady income from weekly donations to spend in a depressed real estate market and to qualify for financing. The churches say their goal is to diversify revenue streams so that, among other things, they can expand their community service projects to support growing congregations. And the developers can get tax benefits.
The churches acknowledge the financial risks, said Midgett Parker, an attorney who represents about 80 churches in Prince George's County. An oversupply of housing units and tightening credit markets have affected them, Parker said.
"The contract could fall through; the market could fall apart," he said. Churches "manage the risk," he said, by including clauses in contracts with developers that allow them to reclaim their property if a developer abandons a project.
Parker said many churches are counting on a turnaround in the real estate market. Plans for their projects are being drafted and are moving through the planning and zoning process so they will be well positioned when the market rebounds.
Terry Lynch, executive director of the Downtown Cluster of Congregations, a consortium of 43 churches and synagogues in the District, said the move is part of "a new economic reality" for churches that need money to "maintain a large vibrant congregation." Churches have to meet their social missions, and as memberships expand, the demand for services grows -- even beyond what they might be able to support with member donations, Lynch said. "You have to be savvy in how to pay for extended ministries," he said. "How do you offer substance abuse programs, food banks and other programs without reliable funding? On top of that, they are paying for utilities, youth ministries, educational facilities. . . . It's very daunting."
Jericho Senior Pastor Betty P. Peebles said the decision to build Jericho Residences, a 270-unit independent-living facility for seniors that opened in June, has been part of the church's vision since it moved from the District to Prince George's in 1997. Today, 130 residents live at the apartment complex.