Los Angeles Developers Build Housing at Church Sites

As costs for new developments continue to impact project decisions, some developers are turning to God for answers – well, sort of.

By partnering with local churches for new housing on church-owned land, affordable housing developers can eliminate the added cost of a land acquisition, which can be significant.

A fourth quarter report from Avison Young shows the typical land acquisition for new developments in Los Angeles County was $100 to $190 per square foot, when examining the middle 40% of 2025 transactions.

By that metric, a developer looking to build a 100-unit multifamily complex in L.A. on one acre of land could save between $4.4 million and $8.3 million by partnering with a church – not to mention skirting the costs of property taxes and other expenses.

So, what do these projects look like in practice? Well, the answer can differ for nonprofit and for-profit developers but there seems to be significant pros on either side.

Logos Faith Development, a for-profit affordable housing developer based in Westchester, works exclusively on church land developments, primarily in L.A. and San Diego. The firm builds voucher-based housing projects with 50 or more units ranging from very low-income to workforce housing in urban infill areas.

Once forming a church partnership, Logos Founder Martin Porter said the church puts its land into a joint venture, single-purpose entity which Logos is the administrative general partner of. That gives Logos site control while allowing the firm to maintain the nonprofit status of the partnering organization, Porter explained.

In addition to the capital saved by avoiding a site acquisition, “We maximize the tax upside by then being able to secure the welfare tax exemption, which is extremely important, and being able to minimize negative tax consequences that occur when you transfer title into a new joint venture entity (because the church is a nonprofit),” Porter said.

With these cost savers, Porter said Logos is able to keep its cost-per-unit on projects between $300,000 and $350,00 including hard and soft costs.

Solely using private funding is another way Logos lowers costs by avoiding certain hindrances that come with government funding such as prevailing wages. A typical financing package for Logos consists of a lender, impact or traditional investors, some of Logos’ own capital and a grant from an organization such as the Department of Housing and Urban Development. While many investors request anonymity, Porter was able to disclose a partnership with the Roy and Patricia Disney Foundation, which invested more than $500,000 into Logos last year.

“Between grants, low interest loans, forgivable loans, impact investors that may require a different return, and then your typical investor and your typical lender… it’s a really distinct capital stack,” Porter told The Real Deal.

Once a project is complete, Logos first pays back its lender and then its investors – which Porter said typically see a 15 to 20 percent return on investment. After that is squared away, Logos pays back the church for the value of its land and from there, the goal is to then give the church a 7 percent annual return.

“We’re not going to make (the church) rich, per se,” Porter said. “We’re going to make sure they are made whole in their land… (and) we’re going to get them a reasonable return to stabilize them economically and to replace reduced tides and reduced memberships.”

Logos currently has a pre-development/development pipeline of more than 2,000 units. One local project about to begin construction is a four-story, garden-style building in the Vermont Knolls neighborhood which will have 62 affordable rental units, a mix of one- and two-bedrooms, in partnership with St. Rest Friendship Church. The firm also completed a 92-unit affordable housing complex on South Central Avenue in South L.A.

While there’s not a clear indication of the number of church land housing projects that have been completed in the L.A. area, as many as 80 congregations in Los Angeles County are weighing the possibility, HousingWire reported, and more than a dozen projects are in development.

Church land developments are also piquing the interest of the nonprofit building sector.

The Community Corporation of Santa Monica, a nonprofit affordable housing developer, recently broke ground on a church land project in partnership with the Culver-Palms United Methodist Church in Culver City.

The 95-unit, six-story 100% affordable project is CCSM’s first entrance into the church land development space but it won’t be the last. Executive Director Tara Barauskas said the firm is in early stages of a similar project in Del Rey.

Like Porter, Barauskas said avoiding a land acquisition through a church partnership is the “hidden gem that makes a huge difference to developers.”

“We’ve been working on this Culver-Palms project for six years, and we didn’t have to buy the land and pay six years worth of property taxes, insurance, land loan payments, interest and all those things,” she told TRD. “So it’s a huge benefit.”

The partnership mutually made sense, as Culver-Palms had seen its congregation shrinking over the years, Barauskas noted. Rev. Johan Dodge, Culver-Palms’ pastor, said in a release that the church was “honored” to work with CCSM on this project which builds upon the church’s “long history of championing a wide variety of social justice and community-building activities.”

Rather than purchasing the land, CCSM entered into a ground-lease agreement with Culver-Palms United Methodist Church, which is using that money to fund the redevelopment of its church facility, making it smaller and more modern. Unlike Logos’ structure, in this project, the church is not an equity partner and does not have any long-term financial interest in the development.

The portion of church land needed for a development will vary project to project, but for this particular venture, the church offered up two-thirds of its property.

The $82 million project has a layered capital stack with about half of the funding coming from tax credit equity through the National Equity Fund, along with tax-exempt bonds and state and federal tax credits, Barauskas said. The remainder of the budget comes from a 40-year permanent loan, a $21 million investment from the city of Culver City and some of CCSM’s own capital.

Rep. Sydney Kamlager-Dove of California’s 37th Congressional District also announced new federal funding in the amount of $850,000 for the project at its March 13 groundbreaking.

The state too has taken note of the opportunities these developments create. In 2023, the California Legislature passed Senate Bill 4, also known as the “yes in God’s backyard” bill, which gives way to a streamlined approval process and an exemption from CEQA for 100% affordable housing developments on church-owned land.

While neither Logos or CCSM have utilized SB 4 – which went into effect in 2024 – for its projects, both Barauskas and Porter indicated interest, citing the reason for not using it yet is simply that it’s new and they already had projects far along in the development process.

“We think there’s a benefit to SB 4 because it’s continuing the church land conversation,” Porter said. “It’s amplifying the possibilities of unlocking more church land housing going forward.”

Barauskas reiterated this point, adding that “land is really hard to come by in general and on the West Side in particular, (especially) land that’s desirable and suitable for affordable housing funding.”