A Match Made in Heaven

Credit Joan McGuire

How religious communities offer a unique solution to tackling the housing crisis.

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You’d be forgiven for thinking Oregon’s escalating housing crisis might take a miracle.

Conservative estimates are that the state will require 30,000 affordable units a year to keep at-risk families off the streets, and that is not counting the 14,000 Oregonians already suffering from homelessness.

The Leaven Community Land and Housing Coalition says it has an innovative solution to the housing crisis. It is a group of like-minded religious and faith-based organizations that want to build affordable housing on their land.

The coalition has 20 members across the state and is growing. The group says faith-based communities are uniquely positioned to step up during the housing crisis, and not only because of their mission to help the less fortunate.

“There’s over 600 acres of land owned by religious organizations around the state, land in good locations where people want to live,” says Pastor Andy Goebel of Portsmouth Union Church in Portland, who also serves on the board of the housing coalition. “It’s not a silver bullet, but it’s enough to put a serious dent in the housing crisis.”

It is not a completely unheard of idea. St. James Lutheran, a church in Portland, built 122 housing units of low-income housing in the 1990s.

Today the housing crisis is more pressing as rents have surged and affordable housing development has not kept up with demand. Faith-based communities that want to develop their land face hurdles that might not be as difficult to surmount for larger developers. Their biggest challenge is finding the money for an initial investment.

Mark Edlen, cofounder and chairman of investment at real estate and development firm Gerding Edlen, says religious organizations have the added advantage of owning their land debt free. He has been working with a parish, which chose to remain nameless, for four years.

“Thirty percent of the [affordable] housing capital comes from low-income housing tax credits, which is a very complicated program. Twenty to 30% comes from debt, and the rest has to come from somewhere else, like philanthropy, Metro bond money, and organizations like Meyer Memorial Trust,” says Edlen.

“Quite often, lands owned by churches are zoned institutional, so you have to go through a zone change as well.”

Traditional investors have been shy to invest in the coalition’s projects, primarily because of the perceived lower returns. The coalition is dedicated to building units that will be affordable for people on the lowest income spectrum.

“Business community folks have the capacity to lend a very low interest for a short amount of time. They can beat the banks by 3-4%, and help the housing projects get over the initial bump.” says Reverend Julia Nielsen, housing resource developer at Leaven Community Land & Housing Coalition.

“We got lucky for our initial investment, as one of our parishioners sold their home and made a large contribution.”

While the return on investment might not be as high as other prospects, Nielsen says that when business communities get on board with these kinds of housing projects, the entire community, including neighborhood businesses, benefit.

“There are also newer kinds of investment groups that are dedicated to green buildings and socially responsible investing who are willing to take a lower return,” says LaVeta Gilmore Jones, co-director and lead organizer of the coalition. “This is an opportunity to put your money where your mouth is.”

Not only are there large amounts of red tape to go through, small faith-based organizations are not able to jump through the hoops of larger developers, which can also cause setbacks.

For example, when Portsmouth Union Churchtried to develop its land in 2015, it was told it had to provide an additional $300,000 of funding to improve the nearby intersection, money the nonprofit organization did not have on hand.

“In 2017 Senate Bill 1051 gave community groups, including faith-based groups like ours, the ability to build affordable housing as provisional use of our land,” says Jones. “But when we talk to city officials, they only know about the ADU [accessory dwelling unit] section of that bill, and either don’t know or aren’t in compliance with the other half of the law.”

“The legislature has done its job,” says Nielsen, “but often we need to educate county officials and commissioners about what the laws actually are. Often we are being treated the same as large-scale developers.”

But after five years the work has finally begun to pay off.

On Jan. 28 the Portsmouth Union Church, a founding member of the coalition, was awarded $2,355,000 from Oregon Housing & Community Services, a state-run department, to begin construction of Portsmouth Commons, a housing project dedicated to serving homeless veterans from underserved communities.

It is the first ground to be broken by the coalition since its formation.

“What a win after five years of work,” says Nielsen. “We hope our other members don’t have to wait this long.”

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