ANTI CHRISTIAN ZONING LAWS INCREASE APPRAISAL VALUE OF CHURCHES

ANTI CHRISTIAN ZONING LAWS
INCREASE VALUE OF CHURCHES:

American Appraisers Corp. appraises churches all over the country
and a phenomenon that I would like to discuss is the affect on church real
estate in the face of an anti Christian government.

The most obvious example I have witnessed was a church we appraised in
Washington DC last year. Prince George County is one of the three
counties adjacent to the city limits of Washington DC. A few years ago,
Prince George County was attempting to spur industrial development with its
own industrial park. Much to the consternation of the local government, a
church purchased a large tract and built a large church. Consequently, the
government lost the tax revenue that they were expecting for this site. With a
knee jerk reaction, the government changed the zoning laws so that,
churches could not build on anything but residential land. Not surprisingly,
churches were not happy. The days of small churches in quaint residential
settings are gone. The current trend is very large churches, with family life
centers, gymnasiums, adult classes, etc. In order to pay for these facilities,
the church needs people.

Although churches are not considered retail, they do share several attributes
of a retail use. A church thrives by increasing its membership and
attendance. This can be accomplished using all the same methods that a
retail store would use. They are advertising, word of mouth, convenience.
The advertising and convenience are accomplished by having an attractive
church that is highly visible and easy to get to. Therefore, the current trend
of new churches is to locate in high visibility areas, preferably close to a
major limited access road interchange. These site qualifications are identical
to a retail use. Since the location of these sites, would most likely be
commercial or industrial, the change in zoning eliminated the very sites that
new churches were seeking.

So what happened? The first reaction was that any existing church facilities
were suddenly in high demand. The premise of the cost approach is that no
reasonable person would pay more for a property than the price for which a
new facility could be built. If building a new church is suddenly not an option,
then the bindings of the cost approach, which generally keep an appraisers
feet on the ground fall away. The market value is then free to drift into the
stratosphere. Churches began selling at prices higher than shopping
centers and would sell again after a very short holding period at even higher
prices. The thirst for new church property encouraged churches to be more
creative. Their solution was to purchase existing retail and office buildings
and convert them into a church. Since the structures were already in
existence this conversion was allowed by zoning. With such a supply crunch,
the converted churches began selling at 300% of what it sold for as a retail
building.

The overall affect on the market has been the opposite of what the local
government would have expected. They were hoping that since churches
could no longer build on vacant land in commercial areas, they would quietly
retreat to the suburbs and allow the land to be developed into a tax revenue
generator at some future date. Instead, the churches are buying high grade
retail buildings that already generate tax revenue and turning them into a
non-taxable entity; thus reducing the tax revenue. So, the local government
managed to protect the “future” tax base on undeveloped land, but in the
process, actually decreased their existing tax base. The secondary and
most unfortunate result is that churches simply have to pay a higher price for
real estate than any other buyer.

Is this an example of a government discriminating based on religion? I would
submit a resounding yes.

Although this particular example was in the Washington DC area, the anti
Christian zoning laws are becoming increasingly popular. In Port St. Lucie
Florida, a church must have a parcel of land specifically zoned for religious
facility. In other words, churches are not allowed in any zoning category. In
order to get the RF zoning, the church has to successfully obtain a zoning
change. As I’m sure you known, a zoning change is typically difficult and
expensive to obtain.