The “Faith-Based Organizations” Real Estate Grift
Here is the church, here is the steeple, open it up, where are the people?
Church properties across the country are up for grabs as more and more congregations close for good.
Two bills, one in California, the other in New York, offer a glimpse at how these properties might be repurposed — at the expense of — and often against the wishes of the communities these local churches once served faithfully.
Governor Gavin Newson of California signed Senate Bill 4 (SB 4) into law in 2023. Known as the “YIGBY” law (Yes In God’s Backyard), the bill allows the owners of defunct church properties to bypass local zoning laws to build 100% affordable housing.
The other bill is the stalled Faith-Based Affordable Housing Act in New York.
Small towns across America could have their demographics forcibly changed by multi-unit dwellings, forever altering the character of their historic main streets and town squares.
And there won’t be a thing they can do about it, thanks to the exemptions from local zoning the Zombie lobby is trying to get passed.
America’s failing mainline Protestant denominations are projected to die off by 2050, if not sooner.
What’s left after the faithful die off? Money and land — plus a small clerisy to manage it. These are America’s post-Christian “Zombie” denominations.
There’s another problem, too. The development of so-called “affordable housing” is often part of a well-known grift.
It goes like this. The federal Department of Housing and Urban Development (HUD) calculates an Area Median Income (AMI) for a given area. In densely populated areas, like greater metropolitan New York City, high-income and low-income neighborhoods are sandwiched side-by-side. For instance, at my former church, located in the working class and starving artist neighborhood of Inwood in Manhattan, the HUD AMI radius was wide enough to include some tony neighborhoods in Westchester County.
This skews the HUD AMI and allows developers to market units to households making close to $100,000 a year as affordable. $100,000 a year doesn’t go as far as it used to, but it hardly qualifies as low-income, even in New York City. Yet this sweetheart arrangement means developers get to call housing “affordable” while setting the floor for tomorrow’s market rates.
Both developer and Zombie denomination landlords cooperate to gentrify a neighborhood, pocket the profits, and all in the name of “doing good by doing well.”
Indian Boarding Schools and USAID
In the past few days, Americans have been shocked to learn just how much money the Federal Government funnels through America’s Christian churches.
Keep in mind that, for the most part, this money doesn’t go to individual congregations but to the NGOs run by their parent denominations.
These NGOs, with names like Lutheran Family Services or Episcopal Migration Ministries, are the recipients of lucrative government contracts.
It may come as a surprise to many on the Left, given how much they prize the separation of Church and State, to learn just how much America’s Christian denominations benefit from federal largesse.
It began in 1819 when Congress passed the Indian Civilization Act. The legislation established a system that would eventually grow to 150 federal boarding schools tasked with “Indian assimilation.”
Federal contracts were awarded to the Roman Catholic, Episcopal, and Presbyterian churches, among others, which commissioned their affiliates to set up and operate the schools.
The policy was reversed in the second half of the 20th Century, and the schools shuttered. President Biden formally apologized for the policy last October.
Given this legacy and what is now coming to light under DOGE, the efforts of Zombie denominations to lobby state legislatures to allow them to bypass local zoning laws demands careful scrutiny.
Local zoning amounts to home rule, something Native Americans were denied, to say nothing of the communities across America that are overwhelmed by illegal immigrants settled there by faith-based NGOs fulfilling their government contracts.
“Zombie” Denominations and the Public Trust
It is now fair to ask if these erstwhile Christian denominations are still what their founders intended them to be.
They were founded — in many cases with royal, colonial, and later, state (sometimes even Congressional) charters — as churches.
Churches exist for the regular public worship of God and to disciple the members of the public in His ways.
They have members (or should) who are distributed in local congregations across the highways and byways of the land.
Churches are the faithful gathered and, in legal form, recognized by the state as corporations, able to conduct business, buy and sell, and hold and dispose of property. They are granted First Amendment rights and tax-exempt privileges.
The question now becomes: Are Zombie denominations still churches? If not, should the government intervene in the interest of the public trust?
Let me be very clear: it is not (and never has been in the United States) in the interest of the public trust to ask the government to step in to settle matters of church discipline or doctrine.
However, it is a legitimate question for the people to ask: “Is this organization, calling itself a church, still fulfilling the intent of its charter?”
If a local church quietly becomes an Airbnb or a catering hall and is run for the profit of its officers (who also happen to be the only remaining “members”), then clearly the answer is no.
If an entire denomination devolves into a real estate holding company with only a nominal membership, I also think the answer should be no.
From Churches to “Faith-Based Organizations” (FBOs)
I first wrote about this in March 2024:
An example of this delegitimizing is the proposed Faith-Based Affordable Housing Act that would override home-rule zoning in New York State.
My concern is that this bill will be used to liquidate the real estate assets of failed churches — to the benefit of absentee landlords — and at the expense of local community determination.
Notice what’s going on here. The sleight of hand is visible for all to see. Not even the backers of this legislation call them churches anymore because, increasingly, they aren’t.
A new name is needed, one that can be plausibly attached to the old local church yet durable enough to survive its demise and not raise any eyebrows. And best to start using this new name now, while the old churches are still operating, but increasingly start to call them by the new one: “Faith-Based” Organizations (FBOs).
To be sure, these FBOs can claim the histories of the once-vibrant churches they’re aggregating under their umbrellas, and they will strenuously assert that they are their legitimate successors. A vast real estate portfolio that’s up for grabs, plus billions more in endowment funds gives them every incentive to do so.
The Episcopal Church took the lead on this in 1979 with the Denis Canon. (A canon is a church law.) This house rule stipulated that all property owned by the local congregations was held in trust for the denomination.
I’ve seen the deeds and titles to the property owned by the two Episcopal congregations that I pastored. One predated the Denis Canon by decades, the other by centuries. Nothing in those deeds or titles could be construed as putting the congregation’s property into a denominational trust to be administered by a “Faith-Based Organization.”
As of today, these FBOs still have ordained clergy. They still conduct public worship. But their continuing claims on the legacies of America’s historic Protestant denominations become less and less plausible after each new wave of church closings.
I hope the courts will see this and challenge their claims soon.
It’s not entirely clear, even to me, what to do with the assets of a defunct denomination, but I am quite certain that these Faith-Based Organizations, which are run by progressive ideologues, must not be given carte blanche to do whatever they like.
Image Credit: Unsplash