Unused church property is emerging as a viable source of housing as two slow trends converge: declining church attendance and rising housing costs. Many churches have more land but are on tight budgets, while cities lack prime locations for new homes.
States and local governments are rewriting zoning laws to make it easier for churches and other religious institutions to build homes on land they already own — often with affordability requirements. This change is designed to provide clearer, faster permits in areas where zoning has historically prevented multifamily development. Virginia, California and Florida are showing how those changes are starting
Virginia became the third state to pass a “yes in God’s backyard” (YIGBY) law that allows the right to occupy unused church space. California was the first to allow houses on church grounds without rezoning. Florida lawmakers acted in March, ahead of Virginia.
Church attendance has been declining for years, weakening donations and leaving many churches with high maintenance costs, dilapidated buildings and unused parking lots. A recent Gallup analysis found that religious affiliation has declined, with fewer people viewing it as “very important” and more people viewing it as “less important.”
Affordable housing developers and partners see an opportunity when states reduce – or consider reducing – property rights barriers.
California is the best
At the beginning of a trend other states may replicate, California’s Affordable Housing on Faith Lands Act allows religious institutions and nonprofit colleges to build 100% affordable multi-family housing on their own land, even where zoning would prohibit that type of housing.
Projects that meet the criteria receive ministerial approval, which limits discretionary review and certain legal challenges. The goal is to convert church parking lots and underutilized campuses into housing sites without long-term rezoning battles.
Laguna Beach’s Neighborhood Congregational Church is an early test case. The church had about 30 regular worshipers in a building designed for more than 200 people, according to Shelterforce. Members voted in 2020 to redevelop the unused property and later applied to build 44 units of 100% affordable housing on its campus while maintaining sanctuary and services on site.
In Los Angeles County, about 80 churches of all denominations have begun housing inspections in their area with the support of groups such as LA Voice’s Faith in Housing initiative, which brings together churches and affordable housing developers.
A UC Berkeley Terner Center analysis prepared during the legislative debate estimated that 171,000 acres of religious and nonprofit college land across the country would be eligible. Buildings range from suburban church parking lots in Los Angeles and San Diego to underutilized campuses in the Bay Area and Central Valley suburbs.
Florida toughens YIGBY law
Florida’s approach initially left more discretion to local governments. A state law passed last year allowed cities and counties to approve affordable housing on land owned by religious institutions regardless of the area, as long as the units meet income limits. Local governments had to opt in.
St. Petersburg was the first city to implement that mandate, adopting a law in 2025 that allows affordable housing on religious grounds while allowing congregations to maintain a place of worship on the site. Gainesville launched the YIGBY program that helps churches use state law to build housing in their area, with at least 10% of designated units being affordable.
This year, lawmakers folded church-owned property into the state’s broader housing protection framework as part of the Live Local 4.0 package, moving church land from an discretionary tool to a statewide mandate.
Virginia housing requirements
Virginia is facing affordability pressures in all of its densely populated counties. Gov. Abigail Spanberger pursued a comprehensive housing package this year, including multifamily development in commercial areas.
That bill failed after opposition from local government groups, but smaller measures were passed, including a right-wing bill tied to church and nonprofit land.
“We have non-profit organizations that are willing to step up and help us with one of our most important housing needs around the world,” said Sen. Jeremy McPike during the February debate.
HousingForward Virginia has estimated that faith-based organizations own more than 74,000 acres across about 22,000 parcels across the state, ranging from rural to small vacant lots.
“Undoubtedly, there are many opportunities for mission-oriented churches to help address a problem in their communities: affordable housing,” Eric Mai, the group’s executive director, said in a statement.
Virginia’s bill imposes restrictions
Virginia’s legislation, commonly referred to as the Faith in Housing bill (SB 388/HB 1515), passed both chambers with bipartisan support and was awaiting action by the Governor this month. If signed, the measure would allow churches and other tax-exempt religious and nonprofit groups to build affordable housing on existing land without rezoning, as long as most units remain income-restricted for decades.
Essentially, the law would:
- Create right-of-way approvals for religious and non-profit properties, complete rezoning and special-use permits while still requiring compliance with zoning, safety, historic preservation, height, environmental and resource standards.
- It requires at least 60% of the units in each development to have a long-term income limit, usually tied to the area’s median income limits.
- Limit eligibility to tax-exempt religious owners and certain non-profits who have held land for several years, and set a minimum density allowance of up to 20 units per acre and right on eligible land.
- Keep new homes taxed in most cases, allowing local governments to collect property taxes even if the underlying corporation doesn’t pay taxes.
The law will go into effect on September 1, 2027, and expire in 2031, giving the General Assembly time to decide whether to extend it, HousingForward said.
Other states are considering similar legislation
Massachusetts lawmakers are debating a broader “yes in my backyard” measure that includes YIGBY language, but it hasn’t advanced beyond committee. In Connecticut, lawmakers introduced a bill in late February that would require local governments to plan for approval; not only is it fair, but it will limit the consideration of local laws that limit the density or height of the building.
Most YIGBY credits remain a test of consciousness. Still, as the housing shortage continues and congregations reassess long-term housing needs, lawmakers increasingly look to church land as another way to add affordable housing.
