Developing Affordable Housing Through Faith-Based Partnerships
Addressing the high cost and limited stock of available housing units in the Washington, D.C. region requires innovative solutions and partnerships to ensure that low-income households can access affordable housing. The faith community and houses of worship in the Washington, D.C. area — 780 of which collectively own more than 679 acres of land — are in a unique position to develop affordable housing for those who need it most. Since its inception 15 years ago, the Faith-Based Development Initiative (FBDI), led by the Mid-Atlantic office of Enterprise Community Partners, has developed more than 1,500 affordable housing units in the region through more than $155 million in grants, loans, and tax credit equity to houses of worship. Another roughly 2,200 units are currently under development. On September 15, 2021, Enterprise Community Partners hosted “Developing Affordable Housing & Community Facilities in Partnership With Faith Communities,” a virtual panel moderated by Monica Warren-Jones, director of capital solutions at Enterprise. Three panelists discussed best practices and successful projects to show faith leaders how to develop affordable housing on religious property in a way that protects the interests of the congregation and the community at large.
Demonstrating Community Stewardship
Joseph Williams, senior program director at Enterprise, summarized the role of FBDI, which offers training and technical assistance to houses of worship wishing to develop affordable multifamily housing on their property. In 2021, FBDI created a cohort of 17 houses of worship in Washington, D.C., whose leaders receive training, technical assistance, and grant support to move their development projects forward. The training sessions cover the basics of development, harnessing public and private resources, and managing and maintaining assets. FBDI connects each cohort to a development consultant who guides cohorts through the community development process. In terms of technical assistance, FBDI assists faith groups in conducting feasibility and zoning analyses and offers referrals to pro bono and fee-based legal services.
Lloyd Jordan, executive partner at Motley Waller LLP, encouraged faith leaders to tap into in-house resources by identifying congregants who have experience in real estate and can offer suggestions. He cautioned congregations to avoid common pitfalls that may come from a too-hasty acceptance of a developer’s real estate offer. Once a congregation has selected a developer, it must establish a strong working relationship with the firm and hire legal counsel to review letters of intent and contracts to protect the interests of the congregation. In addition, a real estate lawyer can help a house of worship hold developers to a firm sunset date so that congregations do not spend years stuck in limbo waiting for a project to be completed.
Leading by Example
Williams encouraged faith leaders to foster strong relationships with neighborhood associations, local officials, and community leaders over several years to build rapport and align their ministries’ goals with community needs. As he emphasized, “[T]he first time you engage with your municipality [and] your elected leaders, can’t be when you’re talking about putting together a project.” Macedonia Baptist Church in Arlington, Virginia, recognized the importance of laying the foundation of community engagement early, as Leonard Hamlin, Sr., canon missioner of the Washington National Cathedral, noted. Before pursuing real estate development, the congregation had already been active in many outreach efforts and programs in the neighborhood and recognized the housing needs of local residents in the rapidly gentrifying area. Macedonia Baptist Church partnered with developer AHC, Inc. to construct The Macedonian on church-owned land directly across the street. The property consists of 36 units for families earning between 50 and 60 percent of the area median income, with 5 units set aside for tenants referred through the Arlington County Supportive Housing program for persons with disabilities. Input from residents and local officials as well as financial support from Enterprise Community Partners and the local government made the project possible. The $14.9 million development opened in spring 2011 and demonstrates the church’s social responsibility not only to “transform the neighborhood but [also] to transform the lives of those who will be living within those units,” Hamlin stated.
Building Capacity for Development
With plans to expand FBDI beyond the Washington, D.C. area, Enterprise recently partnered with the American Heart Association to implement FBDI in Detroit, Michigan, and in the Gulf Coast region. As FBDI widens its sphere of influence, it can equip more faith leaders with tools to pursue the projects. Jordan stressed that faith leaders need to collaborate and share resources to learn from one another’s experiences. The goal of FBDI’s training sessions is not to help faith groups become real estate experts but rather to have them become sufficiently conversant in real estate development to make informed decisions about potential projects, Williams noted. Furthermore, working with real estate lawyers can help congregations maximize their assets and negotiate with developers. When all the conditions are in place for a positive working relationship between developers and congregations, completing a real estate development project offers faith groups the chance to generate equity while also fulfilling a community need for affordable housing.