States Bet On By-right Housing Projects On Church Land

Unused church property is emerging as a viable housing supply source as two slow-moving trends converge: declining church attendance and an escalating housing affordability crunch. Many congregations have surplus land but tighter budgets, while cities are short on well-located sites for new homes.

States and local governments are rewriting zoning rules to make it easier for churches and other faith institutions to build housing on land they already own – often with affordability requirements. The shift is designed to provide clearer, faster approvals in places where local zoning has historically blocked multifamily development. Virginia, California and Florida show how those changes are taking shape.​

Virginia became the third state to pass a “yes in God’s backyard” (YIGBY) law that allows housing on unused church property by right. California was the first to allow housing on church property without rezoning. Florida lawmakers acted in March, ahead of Virginia.

Church attendance has fallen for years, weakening donation revenue and leaving many congregations with high maintenance costs, aging buildings and underused parking lots. A recent Gallup analysis found religious engagement has declined, with fewer people seeing it as “very important” and more people seeing it as “not very important.”​

Developers and affordable housing partners see opportunity where states have reduced – or are considering reducing – local entitlement hurdles.

California leads the way​

At the vanguard of the trend other states may replicate, California’s Affordable Housing on Faith Lands Act allows religious institutions and nonprofit colleges to build 100% affordable multifamily housing by right on land they own, even where local zoning would otherwise prohibit that housing type.

Projects that meet objective standards receive ministerial approval, limiting discretionary review and certain legal challenges. The goal is to convert church parking lots and underused campuses into housing sites without prolonged local 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, according to Shelterforce. Members voted in 2020 to redevelop unused property and later applied to build 44 units of 100% affordable housing on its campus while keeping the sanctuary and ministries on site.

In Los Angeles County, about 80 congregations across denominations have started exploring housing on their land with support from groups such as the nonprofit L.A. Voice’s Faith in Housing initiative, which connects churches with affordable housing developers.

A UC Berkeley Terner Center analysis prepared during legislative debate estimated that up to 171,000 acres of religious and nonprofit college land statewide could be eligible. The properties range from urban church parking lots in Los Angeles and San Diego to underused campuses in Bay Area and Central Valley suburbs.

Florida tightens YIGBY law

Florida’s approach initially left more discretion to local governments. A state law adopted last year allowed cities and counties to approve affordable housing on land owned by religious institutions regardless of the underlying zoning, as long as a share of units is income-restricted. Local governments had to opt in.

St. Petersburg became the first city to use that authority, adopting an ordinance in 2025 that permits affordable housing on religious property while allowing congregations to keep worship space on site. Gainesville launched a YIGBY initiative that helps churches use the state law to build housing on their land, with at least 10% of units designated affordable.

This year, lawmakers folded church-owned property into the state’s broader housing preemption framework as part of the Live Local 4.0 package, shifting church land from an optional tool to a statewide requirement.

Virginia’s housing needs

Virginia faces affordability pressures across its most populous regions. Gov. Abigail Spanberger pursued a broader housing package this year, including by-right multifamily development in commercial areas.

That bill failed after opposition from local government groups, but narrower measures were passed, including a by-right bill tied to church and nonprofit land.

“We’ve got nonprofit organizations willing to step up and help us with some of our critical need for housing across the commonwealth,” state Sen. Jeremy McPike said during February debate.

HousingForward Virginia has estimated that faith-based organizations own more than 74,000 acres across about 22,000 parcels statewide, ranging from rural property to small infill lots.

“There is, without a doubt, a significant amount of potential for mission-oriented congregations to help address their communities’ most pressing issue: affordable housing,” Eric Mai, the group’s executive director, said in a statement.

Virginia’s bill sets limits

Virginia’s legislation, often referred to as the Faith in Housing bill (SB 388/HB 1515), passed both chambers with bipartisan support and was awaiting the Governor’s action this month. If signed, the measure would allow churches and certain tax-exempt faith and nonprofit groups to build affordable housing on land they already own without rezoning, as long as most units remain income-restricted for decades.

In practice, the law would:

• Create by-right approval for qualifying religious and nonprofit property, eliminating rezonings and special-use permits while still requiring compliance with local building, safety, historic preservation, height, environmental and utility standards.
• Require at least 60% of units in each development to be income-restricted for a long term, typically tied to area median income thresholds.
• Limit eligibility to tax-exempt religious and certain nonprofit owners that have held the land for several years, and set a minimum density allowance of up to 20 units per acre by right on qualifying property.
• Keep the new housing taxable in most cases, allowing local governments to collect property taxes even if the underlying organization is tax-exempt.

The law would take effect Sept. 1, 2027, and sunset 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 back yard” measure that includes YIGBY language, but it has not advanced beyond committee. In Connecticut, lawmakers introduced a bill in late February that would require local governments to streamline approvals; it is not strictly by right, but it would limit consideration of zoning rules that restrict density or building height.

Most YIGBY bills remain cautious experiments. Still, as housing shortages persist and congregations reassess long-term property needs, lawmakers increasingly view church-owned land as another pathway to add affordable units.