National CORE Pioneers Development of Affordable Housing on Church Land

Developer-Church Partnerships Blaze New Path for Needed Housing, Stronger Communities

California’s latest innovation in tackling the surging crisis in affordable housing streamlines the process for building on underutilized church land – a practice pioneered by National CORE.

Senate Bill 4, known as the Affordable Housing on Faith Lands Act, allows developers to skip expensive and time-consuming efforts to rezone land owned by faith-based organizations or nonprofit colleges. The law took effect on Jan. 1.

SB 4 prevents efforts to block affordable housing on such land by local government organizations or by challenges through the California Environmental Quality Act (CEQA).

By doing so, the law makes an estimated 171,000 acres of land across California available for developing affordable housing communities, according to UC Berkeley’s Terner Center for Housing Innovation.

“SB 4 is a win-win for affordable housing in California,” said Jay Prag, a professor at the Drucker School of Management at Claremont Graduate University. “It provides access to land in many communities that are in desperate need of new affordable housing, and it cuts through the red tape that often slows or completely stymies development in some California cities.”

Faith-based partnerships are often configured as ground-leases, which allows the religious organization to retain ownership of the land and receive annual payments from the developer. This in turn lowers the upfront costs of developing affordable housing.

Because churches are often at the center of communities, it also ensures new residents are close to key services, transit and shops.

National CORE, the nation’s third largest nonprofit developer of affordable housing, pioneered partnerships with faith-based organizations before SB 4 was passed.

As of April 2024, the Southern California-based organization has opened communities in partnership with churches in Orange, San Diego and Riverside counties. Three more such communities are in development in Los Angeles and Orange counties. Altogether, the developments are creating more than 350 new affordable apartment homes for communities in need.

“Our church partnerships reflect an ongoing program of innovation in financing options as well as build on our deep commitment to collaborating with communities when proposing new affordable housing developments,” National CORE President Mike Ruane said. “We’ve often been early adopters, finding new ways to shepherd this much needed housing to reality, and then share what we’ve learned with the industry.”

National CORE’s first such partnership began in 2018 with the Santa Ana United Methodist Church, which had operated two church sites in Santa Ana.

“The situation facing the Methodist church leadership in Santa Ana was that the church congregation numbers were diminishing, and they were trying to maintain two large church campuses,” said Alexa Washburn, National CORE’s senior vice president of planning and acquisitions.

“They consolidated their ministry onto their north campus and freed up their downtown campus to become a family-centric affordable housing project. This approach allowed them to continue their mission of helping the most vulnerable members of their community by providing almost 100 units of beautiful and conveniently located homes that these working families can afford.”

It is from this goal that the development’s name, Legacy Square, came to be.

The church leased the land to National CORE at a below-market rate, which reduced upfront construction costs by about $50,000 per apartment and created a reliable stream of income for the church community.

Washburn and her team guided the development through the planning and approval processes, working with community members to shape the development so it would serve the maximum number of local residents in need. They also partnered with local organizations to secure $10 million for neighborhood improvements, including safe routes to schools, a park and new bike paths.

The result: a 93-home community that blends beautiful aesthetics, the latest in sustainability construction and design and a robust slate of resident services. Thirty-three homes serve community members who have experienced homelessness or who were at risk of becoming homeless.

Washburn said the commitment of the church community boosted neighborhood engagement and expedited approvals.

“When I am out there knocking on neighbors’ doors to inform them about our plans and get their perspective, the reception is warmer when I have the local pastor, priest or bishop at the door with me,” she said.

In 2023, the Southern California Association of Governments recognized the development for its environmentally sustainable design. On April 11, it was named 2024 Project of the Year at the Orange County Affordable Housing Awards, hosted by the Affordable Housing Clearing House, the Kennedy Commission and the Orange County Community Housing Corp.

National CORE followed Legacy Square with partnerships with Nestor United Methodist Church in San Diego, the Episcopal Diocese of Los Angeles and the Pacific Union Conference of Seventh-day Adventists in Riverside.

Nestor Senior Village opened 73 apartments in late 2023, serving residents who have experienced homelessness or who were at risk of becoming homeless. Thirty-five apartments serve seniors who need mental health services.

As with Legacy Square, Nestor Senior Village’s ground lease generates a stream of income that benefits Nestor United Methodist Church – a century-old institution – while fulfilling the church’s mission to serve residents in need. Residents and church members will share access to amenities on the property.

National CORE’s partnership with the Episcopal Diocese of Los Angeles has generated three additional developments. Santa Angelina in Placentia, a senior development, will open 65 apartments in May. Orchard View Gardens, a family community, will open 66 apartments in Buena Park by the end of 2024. St. Ambrose in Claremont is beginning development of up to 59 apartments for seniors.

Each development sets aside homes for residents who have experienced homelessness or who are at risk of becoming homeless.

The Episcopal Diocese of Los Angeles would like to create affordable housing on up to a quarter of 133 mission and parish campuses in six counties in Southern California and the Central Coast.

“The Episcopal Diocese of Los Angeles feels blessed by its collaboration with National CORE and other partners to build affordable housing,” said the Rt. Rev. John Harvey Taylor, VII Bishop of Los Angeles. “These projects give congregations the opportunity to do mission-appropriate outreach to housing- and food-insecure neighbors while securing vital resources through ground leases to build up and sustain our core ministries.”

The National CORE church partnerships thus far predate the state’s approval of SB 4.

Washburn described the new law as a mixed blessing. The speedier development process is balanced by a trigger for paying prevailing wages and other provisions that can boost development costs significantly.

“SB 4 can be a valuable tool to overcome development barriers, but it can also drive up the cost to build by as much as 30%,” Washburn said. “More importantly, National CORE will continue to build strong alliances with faith-based communities to create highly effective affordable housing developments with