Many churches have have financially supported non-profit housing organizations in the construction and repair of affordable housing. Members of some churches have bought and rented out properties below market rate.
Cass Community Social Services | Detroit, Michigan |
“I was homeless,” said Robert Prince. “I wasn’t proud of it; but I wasn’t ashamed of it either.” Happily, Robert is no longer homeless. Since December 1, 2018, he has been participating in a rent-to-own program in the Tiny Home community of northwest Detroit sponsored by Cass Community Social Services, a ministry of the United Methodist Church.
Twenty-five tiny homes, ranging from 250 to 450 square feet, rent to own at $1 per square foot. After renting for seven years, participants own the house free and clear. These homes are being built side-by-side on vacant lots acquired by Social Services for a total of $15,000 from the city of Detroit in order to “to allow formerly homeless people and other low-income individuals and couples to become homeowners,” writes Director Rev. Faith Fowler in her book Tiny Homes in a Big City. In addition to paying rent, residents are expected to participate in eight hours of community work per month. In return, they receive regular financial counseling. The homes come completely furnished. Each home costs between $40,000 to $60,000 to build and furnish. In many cases a registry is set up for a home. Donors can contribute as little as $3 for a plant to hundreds of dollars for major appliances. After the first couple of homes were built, architects stepped up and provided their design services pro bono; in many cases building materials were also donated. On average, 350 hours of volunteer labor goes into each home. The tiny homes sit on a fixed foundation and include indoor plumbing, an on-demand water heater, heat and air conditioning, stove and refrigerator, microwave, washer and dryer, a security system, and a solar panel in the backyard that keeps the electrical bills down. A good number of the homes were sponsored by local congregations. For example, the youth group of Birmingham First Methodist Church raised $40,000 for one of the homes through a friendly “extortion” scheme: they planted pink flamingos on fellow parishioners’ front lawns and then charged them to remove the birds; they also sold “insurance” to prevent the flamingos from showing up on the front lawns in the first place. The Tiny Homes community is located on northern edge of the Cass Community Social Services urban campus. Group meetings for AA and NA are in walkable distance, as is a bike bank, a clothing and furniture distribution center, food services and community garden, computer and internet services, a free medical clinic, an employment center, GED classes, a gym, a tool warehouse, some retail for basic household products, and places of worship. Cars are not needed. After paying rent for seven years, which covers the operational costs of the program, residents own their homes. As homeowners, residents continue to make monthly payments to cover the operational costs of the Cass Community Tiny Homes community (property taxes, water bills, insurance premiums, and security system charges). No home mortgage is involved. Residents are free to sell their home at market rate. Why seven years to own? In the Bible, seven is the symbolic number of completeness, explains Rev. Fowler. In addition, in the Old Testament the people of God were to give the land a rest every seventh year (a sabbatical); and, upon seven sabbaticals—the year of Jubilee—turn the land to the families who originally owned it and set all the slaves free. These measures were to prevent the permanent polarization of society into the rich and poor. |
Eastern Avenue Christian Reformed Church | Grand Rapids, Michigan |
In 2007 two members of the Neighborhood Development Committee of Eastern Avenue Christian Reformed Church looked out the window the church’s fellowship room to the properties across the street—a collection of vacant lots and abandoned buildings. Eastern Ave CRC is an inner-city church of Grand Rapids, Michigan, located in a neighborhood that experienced white flight and much disinvestment since the 1960s. Even though the majority of its parishioners had moved out to the suburbs, the church decided to stay in the neighborhood and minister as it could. Maybe we could buy the properties across the street and hand them off to an enlightened developer, thought the committee members.
The next year they formed an LLC named Restoration Row, with the aim of acquiring the five, contiguous, independently owned properties facing the church. No small brief. Nothing a market developer would attempt. But they knew they would have to initiate a project large enough to create its own context. Fourteen households from the church joined the LLC, pooling their money together. Over the course of the next five years they acquired the properties, one by one. The recession of 2008 helped, of course. After the properties were aggregated, the LLC entered into talks with the Inner-City Christian Federation (ICCF), a faith-based non-profit housing organization that had its birth in the diaconal activity of the church in the early 1970s. The properties were sold as a package to ICCF at a price that allowed the LLC members to be reimbursed for their investments plus enough to cover inflation over the intervening years. The next challenge was for ICCF to find funding for the construction project. After four rounds of applications, the organization was awarded Low Income Housing Tax Credits by the State of Michigan. Other funding sources were secured, including donations and a long-term, low-interest rate loan from HUD. The $19 million project was ready to start in the fall of 2018. The existing buildings were torn down. The site where a dry cleaner had once been had to be remediated. Two four-story buildings were erected, comprising 65 apartment units, including six live/work units on the ground floor. 61 of the units offer affordable housing at 80% to 30% of Area Median Income. 17 of the units are reserved for the supportive housing of young people aging out of foster care, supervised by Bethany Christian Services. In addition to the apartments, the buildings offer a lounge, a community meeting room, a playroom for kids, and a small gym. At the ribbon cutting ceremony on January 30, 2020, the buildings received their official name: “Steepleview.” |
Sherman Street Christian Reformed Church | Grand Rapids, Michigan |
Form an LLC. Buy a house. Rent it below market. That’s the approach several members of Sherman Street Christian Reformed Church took around 2008 in order to advance affordable housing in the Baxter neighborhood of Grand Rapids, Michigan.
An inner-city neighborhood, Baxter’s history is not unusual: white flight in the 1960s followed by severe disinvestment; over 60% of residential units become rental properties run by absentee landlords, neighborhood retail closes up, the schools underfunded. Five members of Sherman Street CRC, located in the middle of the Baxter neighborhood, decided to take advantage of the falling real estate prices during the 2007-2009 recession. They formed a Limited Liability Company and purchased a nearby neglected three-bedroom house for $5,000. They invested $40,000 in the rehabilitation of the structure, and, as of 2018, rent it below market to a family for $650 a month. The LLC was not formed as a profit-making venture. The members do not intend to cash out once the real estate appreciates. All “profit” from the rent is re-invested in the house in consultation with the renters. There is no expectation of return on investment, which the members of the LLC think of as a permanent tithe, part of the diaconal work of the church. A second LLC with 4 members formed around 2016 to buy a second house in the neighborhood. Both LLCs stand under an umbrella LLC that handles finances and property management, and bills the member LLCs for its services. The model of affordable housing pursued by Sherman Street CRC is flexible. The purchased property need not be a single-family detached house. It could be a duplex, or a triplex, or a multi-unit apartment building. And the LLC need not be a strictly non-profit venture in order to provide affordable housing. |