How much for a house of God?
Sky-high real estate market forcing out churches, congregants
REDWOOD CITY » For years, neighbors have turned to Pastors Mauricio Diaz Uriza and Matilde Perez Diaz when they’ve needed help.
The husband and wife bring food to the poor, offer beds in their own home to those who have nowhere to sleep and help struggling alcoholics get sober.
But the pastors don’t have an answer this time — not as they’re staring down a problem threatening their Pentecostal congregation at Nueva Generacion Covenant Church, and other churches throughout the Bay Area. Nueva Generacion has been displaced from its building and is scrambling to find a new space in the region’s cut-throat real estate market.
“It’s emotionally sad, but also spiritually,” said church member Cecilia Sandoval, a 54-yearold child care provider originally from El Salvador. “Because we have fought for this church to grow, to get strong, and now we have to start all over again.”
Communities across the Bay Area are feeling similar disruptions, as the sanctuaries many people turn to in times of spiritual and economic crisis struggle with their own financial woes. Some small and midsized places of worship are being displaced by high rents, forcing them to relocate, downsize or even close altogether.
Others are suffering from dwindling membership as their
congregants move away in search of cheaper housing, leaving pews empty and collection plates light.
“In the last five years, it really hit the churches real hard,” said Pastor Paul Bains of Saint Samuel C.O.G.I.C. Church in East Palo Alto.
To cut costs, many small churches are sharing space and taking turns holding services. Saint Samuel, which owns its building, rents space below market rate to outside pastors.
For Orchard Community Church in Campbell, it’s the exodus of worshippers that poses a problem — the small congregation is losing members to the pull of cheaper housing markets outside the Bay Area.
In Oakland, where housing prices are more affordable but have been rising quickly, the rabbis at Temple Sinai worry they’ll soon face a similar dilemma. For some congregations, the situation has become so dire that they’re considering converting part of their churches into market-rate housing and retail space to rent out for extra cash.
For now, Nueva Generacion has relocated to a tiny Menlo Park storefront next to a shop that sells piñatas and other party supplies, a spot another pastor agreed to rent short-term for $900 a month. But it’s only temporary — the original agreement was for two months, and they’ve already had to extend that deal once while the church hunts for a new permanent home.
Diaz Uriza founded Nueva Generacion almost 10 years ago in a former florist’s warehouse on Marshall Street in Redwood City. He and his wife held three or four Spanish-language services a week with music, singing, dancing and fiery sermons, while they lived in an apartment upstairs.
Last August, the landlord gave them notice to vacate both the apartment and
the church, without citing a reason. The pastors contacted a lawyer and tried to fight back, but there wasn’t much they could do — Redwood City landlords have the right to evict tenants for any or no cause. They moved out at the end of February.
The pastors were paying $3,200 a month to rent the entire building owned by the Iwashita family, a steal in a city where a single apartment typically rents for more.
But after Iwashita patriarch Frank Iwashita died, his surviving family members took over the property and decided they weren’t comfortable with its belowmarket price tag or its use as a church, because of the number of people coming and going, including children, and the potential liability if something went wrong.
Now, more than two months after the church moved out, the building remains empty. The landlords are weighing their options
for the space, an Iwashita family representative said.
Attorney Todd Rothbard, who represented the Iwashita family in the proceedings, said his clients were very accommodating. They agreed to give the church a free month’s rent and push back the moveout date.
“For years and years and years, they had let these people occupy the premises
at way below market rate,” Rothbard said. “Those things do tend to come to an end at some point.”
All over the Bay Area, places of worship are feeling the squeeze of the real estate market.
“I got my service in the morning, then one group’s at 2 o’clock, another group comes at 6 o’clock. So that way, we can afford to pay the rent,” said Pastor Hipolito
Gama, who rents space from Saint Samuel in East Palo Alto. But even though he splits the $3,000 rent with two other churches, the collection plate often comes up short, and Gama finds himself dipping into his own pocket to pay.
In downtown Campbell, Orchard Community Church has seen eight young couples move away over the past two years because of the area’s high housing costs. The church expects to lose two to six more this year. And five empty-nest couples moved away last year to cash out on their homes’ equity.
The losses have had a huge impact on the Evangelical church, which has about 125 members, Pastor Todd Burgett wrote in an email.
In Oakland, Rabbi Jacqueline Mates-Muchin of Temple Sinai is watching the housing market anxiously. So far, Temple Sinai, which owns its building, is swelling with new members who have moved to Oakland from more expensive parts of the Bay Area. But housing prices are rising in Oakland, and Mates-Muchin already has seen the cost of living drive out some of her younger members.
“In the past, a lot of synagogues, we’ve relied on yearly donations from our membership,” she said. “And if that starts to drastically shift, then we have to start to think differently about how we do business.”
Shrinking congregations are such a common problem in the Bay Area that Dublin-based developer Landis Graden of DCG Strategies has created a niche business helping churches downsize or better monetize their properties.
“If you have a building that once sat 200 people, and the costs associated with it, and now you have 30 people, you have a liability,” Graden said. “Even if you have great reserves, at some point you’re going to become unsustainable.”
Graden is working with one congregation in downtown Oakland on a proposal to turn its two-story church into a mixed-use building of up to seven stories. The church would hold services in one section of the ground floor and rent out the rest for retail use. The higher floors would be condos or apartments, which would bring in additional revenue.
Diaz Uriza recently found a potential new home for Nueva Generacion in a former mechanic’s shop in Redwood City. But there’s one big problem — the price tag. The owner wants $5,000 a month, a big jump from the $3,200 the church had been paying.
Diaz Uriza can’t see how his church can afford that, but he hasn’t given up hope. He and his wife and their congregation have been praying and fasting, asking God for an answer. They have faith he will respond.
“I don’t know how it’s going to happen,” Diaz Uriza said, “but I know it’s going to happen.”