Affordable Housing in God’s Backyard

7 min read

The Diverse Benefits of Building on Church Land

Apparently God, at least, doesn’t mind having low-income neighbors. That’s the implication of a new initiative called YIGBY (Yes in God’s Back Yard), which is using church land to build affordable housing while getting around the usual litanies of NIMBY objections.

The movement is a coalescing around several overlapping positives. Low-moderate people get affordable housing in often quite high-priced housing markets, churches get rental income to help with their revenue loss from having fewer congregants and their inability to hold services due to COVID regulations, and mission-driven financial institutions and philanthropies get a chance to support  projects that line up with their philosophies.

Mary Lydon is the lead project organizer at, a San Diego-based consortium of housing advocates, business leaders, developers and architects that got started in 2019 and is looking to add 3,000 affordable church land housing units in San Diego County over the next five years. Similar efforts are under way in other areas of the country.

“That’s a big goal,” Lydon admits, but there’s also a lot of energy around this kind of development.

YIGBY’s first project is 16 400-square-foot one-bedroom units of affordable housing for veterans and the homeless on land owned by San Diego’s Bethel AME Church on a transit corridor, making it a highly valued transit-oriented development (TOD). Since San Diego is one of the country’s highest-priced housing markets, YIGBY plans to use modular housing to bring down the construction cost from an area average of $600,000 per unit to a total development cost of $4 million.

Ready to Break Ground has faced a few COVID headwinds but hopes to break ground on the project in January and have it finished in four to five months. Lydon is anticipating move-in will happen next summer. The church, whose pastor is the Rev. Harvey Vaughan, dates back 133 years in the Logan Heights section of San Diego and has about 675 congregants.

“Our congregation is very aware of the lack of affordable housing in San Diego,” says the pastor, who believes the church’s real estate efforts will be “a blessing” for both congregation and community.

Rev. Vaughan points out the development has a metro bus line stop directly in front of it and a trolley station two blocks away.

The high price of construction locally is a barrier to affordable development. “Modular is quicker and cheaper,” says Lydon, pointing to recent modular industry improvements that have produced well-built units in offsite factories, units that can then be assembled onsite in as little as ten days.

The Bethel AME development is too small for traditional Low Income Housing Tax Credits, but Lydon says her group is open to using the LIHTC when it plans larger projects. It is also hoping to partner with innovative modular home builder Factory_OS, but this first project is again too small to work for the Bay Area builder. It has two other modular builders competing for this project and was about to award the contract at deadline for this article.

Financing is coming from a couple of sources. Since some of the veterans are homeless, Federal HUD-VASH vouchers will be used. VASH is a rare cooperative effort between two federal bureaucracies, the Department of Veterans Affairs and the Department of Housing and Urban Development. The “SH” in VASH stands for supportive housing, and the idea behind it is that HUD will subsidize housing costs while the VA provides the supportive services, like healthcare and mental counseling, that have proven effective tools in keeping veterans and other homeless people from returning to the streets.

Another source is philanthropic donations into funds structured by Self-Help Credit Union, a mission-driven financial institution based in North Carolina but also active in California.

“Self-Help is very supportive of what we’re trying to do,” Lydon says. One fund, a certificate of deposit product, generates interest to buy down the church’s interest rate. YIGBY is hoping “to finance 50 percent of construction costs through this,” Lydon says.

Providing a Guarantee
The second is a guarantee program to protect Bethel AME from having to use its campus or sanctuary as collateral (the building site is a couple of blocks away from the church and has a couple of homes on it now). The church has other properties it is looking to develop over time as well, Lydon says.

“They want to put their assets to work,” Lydon says. “This won’t generate a huge return on their investment, but enough.”

While the pandemic has slowed things down, it also may end up eventually accelerating this kind of housing.

“The business of church is changing,” Lydon says. “They have surplus land. Congregations are smaller. Schools and daycares are less used. There are ample parking lots. The pandemic shows us all where the weak spots are, more clearly.”

Lydon is aware of similar church efforts in California, like one in Pasadena.

“There are lots of opportunities in the state of California to try to figure this out,” Lydon says, pointing to a study by the Terner Center for Housing Innovation that tabulated thousands of acres of potentially usable church land in the Golden State.

The UC-Berkeley based Center (which is partnering with Factory_OS on a housing innovation lab) has identified almost 40,000 acres of usable church land in California.

“A significant share of that acreage (45 percent) is located in the state’s “high” or “highest” resource opportunity areas, signaling an opportunity for building housing in neighborhoods with lower poverty rates and greater economic, educational and environmental amenities,” according to the report, written by David Garcia and Eddie Sun of the Terner Center.

TOD Opportunities
“In addition, 256.5 acres of the land in higher-resource neighborhoods is located near public transit, offering some potential to build housing that meets the state’s twin objectives of expanding access to opportunity and reducing greenhouse gas emissions through improved land use.”

Garcia and Sun write that the opportunities to do church land affordable housing in California are tempered by the challenges of this kind of development.

“Ownership of this land is quite fragmented, representing 10,440 different parcels and potential land owners. And there are no uniform land use rules governing the development of religious lands, and local regulations such as minimum parking spaces (for both the religious use and new housing) and maximum density and height restrictions limit the development potential of these parcels.

“Third, there is no straightforward source of financing for housing on religious land, particularly for affordable housing. Lastly, most faith-based organizations have little to no real estate development experience.”

Faith-based groups therefore can use a little help getting off the ground for what could be some effective development, the two write.

“Providing pathways for new homes through the initiative of faith-based organizations can play a significant role in addressing California’s broader housing crisis, particularly in areas that are most conducive to fostering economic mobility for low- and moderate-income households.

“As faith-based organizations grapple with the best uses for underutilized land, interventions at the state and local levels in the form of regulatory reform and new financial tools can provide important support.”

Story Contacts:
Mary Lydon, Lead Project Consultant, San Diego 619-252-0295

Rev. Harvey Vaughan, Pastor, Bethel AME Church, San Diego 314-910-8096

David Garcia and Eddie Sun, “Mapping the Potential and Identifying the Barriers to Faith-Based Housing Development,” report by the Terner Center for Housing Innovation at UC-Berkeley


Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.