Bill to Help Churches, Nonprofits Turn Extra Property into Affordable Housing Advances to Senate

Thousands of acres of properties throughout the state that exist within urban growth boundaries, are already connected to local infrastructure and have owners eager to see the sites redeveloped as affordable housing – with little to no expectation of return on investment. 

These properties belong to churches and other nonprofits eager to transition extra space into everything from rental units to land trust properties. Unfortunately, as many religious leaders testified to Oregon lawmakers earlier this year, the pre-development costs can be prohibitive. 

“Like the vast majority of churches in Oregon, we are a small church with less than 60 members,” the Rev. Heather Riggs of Montavilla United Methodist Church told the House Committee on Housing and Homelessness during a March public hearing.

“We are land-rich and resource-poor.

"We would love to share our land, which is right next to a bus line and close to many important services, for nonprofit affordable housing. But in order to build affordable housing, we first need to have an idea of what is possible to build, and have a plan to submit to the county planning office. And we can’t do that ourselves.”

House Bill 2964, currently headed to the state senate, would expand the Oregon Housing Community Services Predevelopment Program to award grants in addition to low-interest loans to not only religious nonprofits, but also housing authorities, federally recognized tribes or developers partnering with such organizations. With these changes, limited equity cooperatives would be eligible for funding.

This would help eager nonprofit partners fund land surveys, technical site evaluations, traffic studies, community engagement efforts and other expenses that arise in the early stages of housing development, co-sponsor Rep. Mark Gamba (D-Milwaukie) testified in March. 

“We’ve heard two key things from these entities,” Gamba said. “First, that their finances are usually too precarious, and their expertise too small, to be able to take the risk on a loan for feasibility work that may not result in actual development projects. Second, we have heard from organizations like Square One Village that the current state program does not accommodate the innovative work that they are doing with limited equity co-ops.”

The Legislative Fiscal Office found the measure would likely have minimal fiscal impact on the Housing and Community Services Department, since similar programs already exist.

Success Stories

Maria Elena Guerra, executive director of Farmworker Housing Development Corporation, explained how her organization has used the Oregon Housing Community Services Predevelopment Program currently in existence to help fill the need for housing in rural areas more quickly. 

“It  has allowed us to put in place a pipeline of 200 units,” Guerra testified. “One hundred of them will be up and ready in the next 18 months, which is great news if you consider that before, just to put 50 units in the ground would take us between three to eight years.” 

Housing developments don’t necessarily mean the end of the congregation’s presence at the site, as the  Rev. Paul Richards-Kuan, pastor of Christ United Methodist Church in the Cedar Mill neighborhood, explained. In April 2024, his church opened a 54-unit affordable housing development for LGBTQ seniors. 

“Just across the parking lot from my church building, it is much-needed affordable housing that quickly reached capacity,” Richards-Kuan said. “We have special services for LGBTQ members provided by Friendly House Elder Pride Services. We have a resident who lived her entire life in the closet or without safe and affordable housing. In her 90s, for the first time she’s able to live both out of the closet and in safe, affordable housing.”

Richards-Kuan was quick to add that his church sits in one of the wealthiest neighborhoods in Oregon, and so it had ample funds and was able to have an active role in working alongside the developer. 

“We know that we are an inspiration for other churches in the state, but we can’t be a model for them,” he said. 

Dan Bryant, director of public policy at Square One Villages, said his organization in part used American Rescue Plan funding to purchase Peace Presbyterian Church in Eugene, where it developed 70 units of multifamily, limited-equity co-operative housing. 

“In a limited equity co-op, you have individuals who become owners through their co-op,” Bryant said. “As a former pastor myself, I can speak to how well this coincides with the mission-driven work of a church, in working to provide low-income households greater financial stability, greater agency in their housing – it just makes for a wonderful partnership.”

The Rev. Brett Pinder of the United Methodist Oregon-Idaho Annual Conference stated there are 153 churches represented within his organization. 

“Over half of them right now worship with less than 25 people on a Sunday,” he said. “In the coming years there will be a large wave of churches deciding what to do with their land, adding to the thousands of acres in desirable locations.”

It is a decision First African Methodist Episcopal Zion Church in North Portland made two years ago.

Brief Windows

Proponents warned that many churches considering such transitional projects have short timeframes to make a decision. 

“Unfortunately, when a congregation reaches the point of discerning closure, their financial capacity has been diminished to the point where the costs associated with pre-development are prohibitive,” the Rev. David Eppelsheimer, affiliated with the Oregon Senate of the Evangelical Lutheran Church in America, said. “In the grand scheme, these are small costs that would be a drop in the bucket for for-profit owners who come with high reserves and high returns, whereas for a faith community at diminished capacity, this cost is a barrier that stops them in their tracks.”

He added, “ Which means this is a lever to pull that would be a small cost to the state to create an outsized impact across our communities for our neighbors who need housing.”

Eppelsheimer reported that in past years, a coalition of faith communities surveyed congregations who were ready and willing to launch affordable housing developments on their properties. 

“They cumulatively held 200 acres worth of land assessed at over $108 million on the traditional market,” he said. “Because of this predevelopment barrier, some of those were not able to continue the project in the time they had left to operate and they had to sell.”

“So often, what ends up happening is they run out of time and they end up selling to an entity that does not provide what our communities most need right now,” Pastor Anna Hosley of Storyline Community in Clackamas and a lead organizer with Leaven Land and Housing Coalition, said. 

“I recently met with a (homeless student) advocate in our local school district who said there are over 100 students they cannot find shelter for right now,” Hosley explained. “These are families that are often living out of cars or on friends’ couches. We don’t have enough supply to shelter our kids. Meanwhile, one of the congregations in our school district is trying to build that supply, and they’re ready to go. One of the members, Bonnie, recently told me, ‘I need to see something good come out of this land before I die, and I am 84 years old so we better get cracking.’

“I’ve seen so many faith communities that we work with hit this barrier and get stuck because they don’t have the reserves, they don’t have the promise of future returns, they don’t have the financial expertise or staffing capacity to get over this hump or to take on a loan. It’s a congregation of Bonnies who have passion and so much land in many cases, but not enough money for this little molehill.”

The bill advances for senate consideration. A public hearing is scheduled for May 12 with the Senate Committee on Housing and Development.