According to New York City’s publicly available PLUTO database, over 900 parcels of land in Manhattan are designated for religious use. But that number has been gradually declining, from 976 in 2010 to 907 in 2020. These religious congregations vary by age of organization and/or building, neighborhood context, landmark status (around 10% of the 907 are landmarked), adjacency to developable lots, membership size, and affiliation with hierarchical denominations. All of these variables affect congregations as they face rising real estate challenges in New York City. The decline of religious parcels indicates changes of use of the building—from a religious use to other uses such as residential or educational. This means that religious organizations across Manhattan are making dramatic modifications for their own congregations that affect the wider community.
Various changes can bring about declining memberships in longstanding congregations—from demographic shifts and aging communities, to out-migration due to increasing residential rents. And while financial contributions from congregants dwindle, maintenance costs increase as buildings age (and can include unanticipated expenses to meet modern regulatory standards). This phenomenon is felt more acutely in historic buildings. While exempt from most property taxes, rising property values can drastically impact a religious organization’s neighborhood context, real-estate appraisal prospects, or future development options by creating pressures and financial incentives for struggling congregations. These pressures make selling and relocating to a rented or distant property a viable choice for some groups.
The loss of local religious congregations often negatively impacts both congregants and the neighborhood. Faith-based organizations across the United States are anchor institutions, functioning as hubs of community building, volunteering, organizing, and social services delivery. The “halo effect”—positive spillover of these community benefits—extends to the economic impact of staffing, local purchasing, and providing a multi-purpose space for neighborhood institutions. [1]Houses of worship can also have positive effects on the built environment: beautifying streets with unique architecture, enabling light in dense neighborhoods, and functioning as visual landmarks.
The COVID-19 outbreak has altered everyday life for the city’s residents and religious organizations—and the importance of these local religious congregations has never been more clear. Many of these organizations have responded to the crisis by expanding their social services, like food pantries and shelters, or by creating new services to assist congregants and residents of their neighborhoods.
Religious organizations have been impacted financially, since their members have fallen ill, become unemployed, or are otherwise unable to tithe or donate. Federal stimulus bills have provided some relief [2] but many institutions are still in need of resources.
The number of religious facilities in each of Manhattan’s ten city council districts, as well as their status as historic landmarks. (Source: BetaNYC)
[1] “The Economic Halo Effect of Historic Sacred Places” from Sacred Places, the magazine of Partners for Sacred Places.
Religious organizations are granted 501(c)(3) status by the Internal Revenue Service, which allows them certain tax exemptions. As congregations incorporate multiple uses inside their properties, it is important for religious communities to consult their legal counsel before approving a major change of use so as to not jeopardize their 501(c)(3) status. It is possible that some revenue from the new uses would not be tax-exempt.
Sales of religious properties are subject to approval from the Attorney General’s (AG) office pursuant to Religious Corporation Law §12 and New York State Not-for-Profit Corporation Law §511/ §511-a. The AG asks whether there is “fair and reasonable consideration” for the following aspects when approving a sale of a religious facility:
Some resources provided by the Attorney General’s office include:
The act of secularizing a building is called “deconsecrating.” Certain faiths have rules that govern deconsecration of religious buildings. These rules might be internal, by a congregation’s commitment to certain religious laws, or a combination in which the religious law supersedes the civil laws when deconsecration and selling are taking place. Congregations should be aware of their denomination’s rules, regulations, and processes on deconsecration before taking action to make a space secular. For example, the Roman Catholic Church is governed by Canon Law and the local Archbishop.
Zoning regulations govern use, height, density, and other characteristics of the built environment to guide land use development. Evolving with changing goals and court rulings, zoning began in 1916 in New York City, followed by the rest of the nation, with the Zoning Ordinance that laid the groundwork for a 1961 reorganization of zoning regulations still governing land use and development across the city today. Although the 1961 regulations are still in effect, numerous additions, changes and amendments have been added over time. On the federal level, the Religious Land Use and Institutionalized Persons Act seeks to afford additional protection by constraining local land use regulation of religious facilities.
Sections 22-13 and 22-14 of Article II of the New York City Zoning Resolution allow certain community facilities to be built as-of-right, i.e. no special permits required, including houses of worship, in residential areas. Specifically, there are two “community facility” Use Groups: 3 and 4. Use Group 3 comprises most educational uses, and Use Group 4 includes nonprofits, medical centers, and houses of worship. Use Group 4 is permitted in any residential district, R1-R10, as well as any commercial district except C7, which is reserved for large facilities like golf courses and amusement parks.
One of the most important tools regulating density or bulk in New York City is Floor Area Ratio (FAR). FAR describes how a building occupies the area of a lot. Each zoning district has a distinct FAR number associated with it, which when multiplied by lot size shows the permissible building floor area. If a lot is 1,000 square feet, and the two-story building that occupies the lot has 2,000 square feet of usable floor area, then the built FAR is 2.0 (the ratio of floor area to lot size). Different areas are zoned for different maximum values, with some as low as 0.5 FAR and others as high as 10.0 FAR. Developers have some flexibility in how the allowable FAR is used: For example, each building in the diagram uses the same amount of floor area as long as the open space remains unbuilt.
Online resources like the Zoning and Land Use Map (ZoLa) [6] maintained by the Department of City Planning can show how much FARhas been built compared to the maximum allowed. While this is a good way to get a sense of development potential, owners should consult an architect for exact square footage. Sometimes the built FAR may exceed allowable FAR because the parcel was downzoned after the building was constructed. Such buildings are considered to be nonconforming buildings, and therefore, if the property were redeveloped the new building would have to comply with existing zoning (i.e., the lower FAR). In parcels zoned for different uses, the maximum FAR can vary depending on use. Zoning may also specify a maximum height or setback requirements. These restrictions are common in special zoning and historic districts.
The Transfer of Development Rights (TDR), also known as air rights transfers, is an important land use tool employed in New York State. This mechanism enables, in certain circumstances, the sale of unused development space (if a building is five floors but could have been 10 floors, for example) to an owner of a separate lot or to the same owner of the granting parcel who owns additional property. Air rights are usually transferred to adjacent lots through a zoning lot merger. This action does not require special approval from the City. However, TDRs also occur between non-contiguous sites. Landmarked sites, for example, have access to specific TDR programs that enable greater flexibility in utilizing this tool (see landmarked properties on Page 12). TDRs (air rights) may be relevant to religious institutions if they are located in high density districts or where Special Area Rules apply, as governed by the City’s Zoning Resolution, and have an under-built site.
[3] “Religious Corporations: Sales and other Disposition of Assets” from the Office of the New York State Attorney General Charities Bureau (NYS Charities Bureau)
[5] “Faith-Based Real Estate Development Transactions” a presentation from the New York State Attorney General, archived by the Manhattan Borough President
[6] ZoLa, NYC’s Zoning & Land Use Map developed by the City of New York zola.planning.nyc.gov
This chapter was informed by the many stakeholder interviews conducted for this Action Guide. It compiles best practices and guidance from subject matter experts and religious leaders who have gone through planning processes. These suggestions are relevant to congregations large and small, to those who are in the midst of planning, or those who have only just begun the process.
What do we own, and how do we own it?
Gathering your documents.
The first step is to gather all the necessary legal documents and records to confirm a clear titleto the property. This is helpful to understand how you own your property and if there are any deed restrictions, easements, zoning, or building code obligations, and if your property is a landmarked space or located within a historic district. This is also an opportunity to ensure that there are no tax liens, debt obligations, restrictions on your assets, or other title problems on your property.
KEY TERMS
title: establishes legal owner(s) of a property
easements: rights held by an interested person to use property, despite not owning it (utility access is common)
liens: unpaid taxes, water bills, and other charges against a property become debts that may be sold by the City
What are we working with?
Assessing your value.
Once you understand what you own, it is vital to know what it is worth. So the second step is to obtain a real estate appraisal which can show your property’s current value, explore what it would be worth with certain uses and investment, and map your assets. This step is especially crucial when considering a sale, as the Attorney General’s office will focus its attention on the appraisal.
KEY TERMS
appraisal: an estimate of the value of real estate conducted by a third party (usually a State-certified professional) for purposes such as tax assessment, sales, or a mortgage
What do we need and want?
Connecting your goals to your mission.
Assess your needs and wants. Congregations should ask themselves: Do we want to stay in our neighborhood? Would it be beneficial for us to relocate? Review your organization’s mission statement and sources of income. Determine what is “mission-critical” for your
congregation and where you can be flexible. This step is helpful to set goals and understand your internal capacity for whichever step you take in planning your congregation’s future.
What approvals do we need?
Engaging with denomination guidelines and other regulations.
Next, you will need to identify what your decision-making process will be, and who are the bodies that approve these decisions. Will you need approval from members of your congregation or from organizational leadership? Does your site include other buildings or is it located in a special district? Ensure that key leadership and all relevant parties are informed along the way. Present your ideas and plans to these stakeholders for consultation and approval.
Who will lead our goals?
Identifying and empowering the congregation’s decision makers.
The fifth step is to designate a steering committee that can lead the congregation as it navigates the question of what to do with their building. Transparency should be a priority for this committee as it considers the various options a congregation may choose. The congregation’s support is important for plans that consider building maintenance or redevelopment. For some religious organizations it will be necessary to check whether the decision makers must be organized in a certain way to satisfy denominational requirements. Make sure these decision makers are properly authorized according to a congregation’s bylaws.
Who else do we need?
Assembling your team of professionals.
Before crafting a plan, be sure to speak with experts to learn what’s possible and to advocate for your needs. Secure an experienced architect and attorney to complete a preliminary zoning analysis and project test-fit to evaluate your space and to help you understand the zoning regulations, the Attorney General’s requirements, and the design possibilities for your property. Ensure that your team of experts has experience with projects that align with your goals and have worked with faith-based organizations in the past. Be wary of upfront payments. Many architects, attorneys, and property appraisers will even be willing to provide preliminary analyses for free or at a low fee.
KEY TERMS
preliminary zoning analysis: an early assessment of municipal codes specific to a property, including zoning and more
project test-fit: drafting plans (like floor plans) to estimate how well a property will fit an intended use.
What financial support will we need?
Exploring internal and external opportunities.
Once you start to envision what is possible, you will want to consider what resources exist to finance your goals moving forward. For this step, you will need to obtain internal information about your budget, savings, congregational giving, and endowments. You should explore various funding approaches through private and public resources. For example, there are funding opportunities for landmarking projects and for affordable housing development. See Chapter 8 for a collection of resources.
KEY TERMS
endowments: funds set aside by or donated to an institution to produce regular income
How can we be transparent?
Communicating with your congregation.
The eighth step is all about communication and inclusion. Make sure to keep the congregation’s leadership and the members informed of the mission, goals, and steps moving forward with regard to any major decisions for the building and the space. This is especially important if the congregation has a formal role in the decision-making process.
Who else are we responsible for?
Understanding your neighborhood impact.
As you are planning for your congregation’s future, remember that you are part of a neighborhood, and your decisions can affect the surrounding community. From spiritual guidance and community building, to providing necessary social services, religious organizations often serve as a community anchor and provide a public value for the larger community. It is important to build relationships in your local neighborhood with residents and institutions and inform the community of your goals. It is helpful to also keep your local elected officials and Community Board updated. Getting support from community partners can help move your organization’s plan forward.
Now that you have created a solid foundation of leadership, decision making, engagement, knowledge, and mission-driven goals, it is time to start crafting a work plan that engages with all these steps. No matter which path you choose, it will likely take time, often years, which is why religious organizations should start with a long-term work plan.
For readers interested in resources and information on building maintenance and generating additional income streams, continue on to Chapter 4. For readers interested in selling or redeveloping a property, skip to Chapter 5. For readers who do not currently have their own space, jump to Chapter 6.
After taking stock, your religious organization may decide that staying in place makes the most sense for the congregation and the overall mission of your organization. To assist with maintenance costs, many religious organizations consider pursuing landmark status, applying for grants, establishing partnerships, leasing available space, or even selling portions of their property. This chapter lists different scenarios your organization might want to consider to help “stay in place.”
Many Manhattan religious organizations have property with landmark designations. The New York City Landmarks Preservation Commission (LPC) governs all properties that are designated as individual landmarks or are located within a historic district. In either case, any alteration to the exterior of the building must be approved by the LPC. It is also important to note that some buildings within a historic district are known as “contributing buildings” even if they are not individual landmarks.
While the City administers historic designations at the city level, some buildings can be in the national or State historic preservation registries. The National Register of Historic Places is a list of buildings and sites of local, state, or national importance. This program is administered by the National Park Service through the New York State Office of Parks, Recreation and Historic Preservation. The National Register is separate from the Landmarks Preservation Commission, although many of New York City’s individual landmarks and historic districts are also listed on the National Register.
If you are unsure about your property, you can look it up on the New York City Landmarks Preservation mapping tool. [7]
One of the most common challenges for all religious organizations are the costs associated with repairs and upkeep— especially for those whose properties are landmarked. Most repairs made to the exterior of the building require approval by the LPC.
There are a few scenarios in which permits for maintenance work that meets the LPC Rules can be issued by staff. An example of this is the Permit for Minor Work, Certificate of No Effect, Authorization to Proceed. In addition, the LPC has an expedited review process called Fast Track Service, which can approve applications in 10 days. Work that does not satisfy the LPC Rules must be reviewed by the LPC Commissioners at a public hearing.
The LPC has produced a guidebook to help applicants navigate the process and expedite staff-level approvals. Check out the LPC Permit Guidebook for a full overview. [8]
The New York Landmarks Conservancy, a New York City-based nonprofit, maintains a hotline that can be a good first step to inquire about repairs and restorations to a landmarked facility.
Their staff can provide referrals to building management professionals, contractors, real estate professionals, and technical services that can help navigate religious organizations through a restoration project. Call the hotline at 212.995.5260. [9]
The New York Landmarks Conservancy also administers a Sacred Sites Fund. [10] This program provides religious organizations with matching grants for planning and implementing exterior restoration projects, technical assistance, and workshops. Grants are awarded to assist with projects such as conditions surveys, architectural and engineering fees, roof replacements, masonry restoration, stained-glass restoration, and structural repairs. Priority is given to essential repairs to the primary worship building.
For landmarked properties, unused development (air) rights are one way to generate revenue for building repairs and renovations. See the end of Chapter 2 (in the “Transfer of development rights (also known as “air rights”)” section) for an introduction to air rights/TDRs. Obtaining a special permit pursuant to Section 74-79 of the Zoning Resolution through the City Planning Commission will allow a property to sell air rights to a receiving parcel that is across the street or down the block from the granting parcel.
This special permit allows greater flexibility in finding a receiving site than the standard rule, which requires the receiving site to be adjacent to the granting parcel. This action would be subject to the City’s Uniform Land Use Review Procedure (ULURP) and the Environmental Quality Review (CEQR) process. See Chapter 5‘s “Environmental Review” section or more about these regulations.
Additional resources and funding opportunities can be found in Chapter 8.
A religious organization can petition the LPC to receive landmark status for their property. The LPC evaluates individual parcels and districts for their architectural, historical, or cultural significance when granting landmark status. Potential landmarks and historic districts are identified by the LPC through surveys and other Commission-initiated research. Commission surveys and research may include properties suggested by members of the public. The LPC maintains a list of the types and criteria [11] of landmark properties and districts online.
If you are considering pursuing landmark status—or the LPC is considering your building for designation—consider the possible outcomes carefully.
KEY TERMS
Landmarks Preservation Commission (LPC): the agency responsible for protecting New York City’s architecturally, historically, and culturally significant buildings and sites by granting them landmark or historic district status, and regulating them after designation
landmark: Properties designated with landmark status by the LPC have special historical, cultural, or aesthetic value to the City of New York. The LPC must approve in advance any alteration, reconstruction, demolition, or new construction affecting the designated building.
Any alterations or changes of use are subject to the standard rules and regulations of the New York City zoning and building codes. Proper permits from the Department of Buildings (DOB) are required for most renovation work. Learn more about how to obtain a permit from the DOB. [12]
Religious organizations across the borough have implemented programs that produce income streams to stabilize finances and fund ongoing maintenance or rehabilitation projects. Religious organizations can lease unused space to other organizations or provide programming that generates income. The sale of air rights is also an opportunity to generate revenue for building maintenance.
If your organization has an income-producing property that is listed on the National Register of Historic Places, you may be eligible for federal and State tax credits to help pay for rehabilitation projects. The New York State tax credit must be used with the Federal Investment Tax Credit Program. Owners of income-producing properties that have been approved to receive the 20% federal rehabilitation tax credit automatically qualify for the additional state tax credit if the property is located in an eligible census tract. Learn more from the Department of Parks, Recreation and Historic Preservation. [13]
Leasing space presents opportunities to generate income and expand community impact. In this situation, the religious organization serves as a landlord and has to understand what the building has to offer, what types of tenants it wants, and how it will meet its obligations as a landlord. Many religious organizations share their space with performance and art groups, nonprofit organizations, and community social services for one-time or ongoing events. A long-term tenancy model may be more financially sound; such tenants can be helpful for investing in the building, helping to make repairs, and contributing to long-term capital improvement.
KEY TERM
capital improvement: any addition or alteration to real estate that meets all three of the following conditions:
(A) it substantially adds to the value of the real property, or appreciably prolongs the useful life of the real property
(B)it becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or article itself, and
(C)it is intended to become a permanent installation.
The Brooklyn Metro Chamber Orchestra performing at St. Ann & the Holy Trinity. (Source: PIANYC)
Religious facilities can provide a unique atmosphere for events. For example, in Brooklyn, St. Ann & the Holy Trinity Episcopal Church frequently rents out its space for concerts (pictured), art exhibitions, and other cultural events. The church also leases out, on a long-term basis, an attached parish house to Saint Ann’s School, which provides a more stable income. The school renovated the space to better suit its needs, and in exchange for the school taking on the renovation costs, the church withheld charging rent for a period of time.
Another example is St. Paul and St. Andrew United Methodist Church in Manhattan, which shares its space in ways that align with its core mission. The church hosts an emergency food program that serves over a million meals a year; service providers that assist with food stamp applications; attorneys who help with immigration processes, housing issues, and domestic violence cases; and a job placement program. The church also established a partnership with neighboring synagogue B’nai Jeshurun, which houses a women’s shelter. All of these activities are managed by a shared calendar, and the space is provided on a contribution basis. Proceeds are directed toward the maintenance of the space.
Developing partnerships with like-minded organizations can be a powerful tool to both further your mission and also find new avenues for income for facility maintenance.
A great example of a church that forged such a partnership is Judson Memorial Church. Parallel to its mission to be an inclusive, uncensored space for the community and a beacon for free speech, Judson Memorial Church rents out its space to organizations that push the boundaries of justice, art, and worship. The church has a Sunday service but is also regularly programmed by a variety of these groups. The space is rented for a fee, and those who align with the church’s mission are eligible for subsidized rent. The church’s space rental form [15] offers a good template for gathering relevant information and identifying events that reflect an organization’s mission and values.
Partners for Sacred Places is a national organization that helps religious organizations build capacity to better serve their neighborhoods as anchor institutions, while nurturing transformation and shaping vibrant, creative communities. They have publications on fundraising, sharing space, and building repairs and maintenance. [16]
KEY TERM
Unrelated Business Income Tax: Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization’s exemption.
Religious organizations that own their property might have unused air rights, and in Manhattan, these rights can be highly valuable. Selling these rights could generate funds to help maintain or redevelop a property, and can potentially provide a financial asset base to fuel outreach and community development initiatives, thereby expanding the organization’s levels of influence and effectiveness. See the end of Chapter 2 (in the “Transfer of development rights (also known as “air rights”)” section) for an introduction to air rights and Transfer of Development Rights.
For example, Bethel Gospel Assembly [17] in Harlem faced the need to build a larger sanctuary to accommodate a growing multicultural congregation, increased weekly gatherings of visiting international guests, and accommodate a second congregation comprised of French-speaking West Africans and Haitians who settled in Harlem. Bethel Gospel Assembly was approached by a developer who wanted to build on what was originally the church’s parking lot.
To accomplish the goal of building condominiums, rental space, and a new adjoining worship center, the church sold its unused air rights and maintained its land ownership. Bethel Gospel Assembly received $12 million up front, and the developer agreed to build a state-of-the-art worship facility at the base of the tower. In addition, the church acquired ownership and management of the rental units in the tower, which provides ongoing revenue
This transaction enabled Bethel Gospel Assembly to maintain ownership despite neigborhood gentrification. The church continues to be a supportive pillar in the community and the city under an emerging leadership of millennials.
Founded in 1917, Bethel Gospel Assembly has gone through three major developmental stages amid corresponding socio-economic and quality-of-life shifts in Harlem. In 1985, the church moved into the former James Fennimore Cooper Junior High School after purchasing the abandoned property at auction from the City for $300,000 in 1982. With a down payment of one-third the purchase price, New York City provided Bethel Gospel Assembly with a mortgage for the balance, which was paid off in the following decade, rendering the property debt free. The 150-member congregation contributed their sweat equity to renovation efforts.
This has enabled initiatives such as an in-house men’s shelter, prison outreach, a food pantry, and a counseling center. The church has also hosted Gun Buy Back, Operation Clean Slate, Youth Opportunity HUB, Emergency Response, and other community initiatives. The church currently occupies two buildings on their square block complex: the Bethel Gospel Assembly Connection Center and the Destiny Worship Pavilion.
[7] Discover New York City Landmarks, official map of the New York City Landmarks Preservation Commission
[9] 212.995.5260,The New York Landmarks Conservancy Hotline
[10] Sacred Sites Fund Grant Criteria, The New York Landmarks Conservancy
[11] Landmark Types and Criteria, the New York City Landmarks Preservation Commission
[12] How to Obtain a Permit, the New York City Department of Buildings
[13] Tax Credit Programs, New York State Department of Parks, Recreation and Historic Preservation
