On any given Sunday morning, you’re likely to find my family and me at church. That’s how I was raised, and that’s what Christians do on Sunday, especially those of us who live in the Bible Belt — we go to church. “Forsake not the assembly of yourselves together,” as the writer of Hebrews puts it.
But people like me and families like mine — people who have faith and regularly attend religious services — are becoming less common. Much has been written in the last several years about the decline of organized religion in the United States. Here’s an excerpt from one such article in Psychology Today.
“It’s important to consider trends in religion in the context of broader cultural changes, and this context is often missing in polls on religion. We found that religious involvement was low when individualism was high in the society. Individualism — a cultural system focusing more on the self and less on social rules — has been on the increase in the U.S., with increased self-focus (more positive self-views, more use of “I” and “me” in books and song lyrics), more tolerance and equality (around race, gender, and sexual orientation), less adherence to social rules (with acceptance of premarital sexat an all-time high), less social support (lower empathy), and less interest in large groups and social rules (declines in political and civic participation). Things are not all better, and they are not all worse. But American society is more focused on individual freedom, and less focused on social rules, than it used to be.”
Construction of Religious Facilities is Declining
Regardless of the causes, the decline in religious attitudes and behavior in the United States portends dramatic changes when it comes to real estate — churches, synagogues, mosques, and other religious facilities. As the following chart illustrates, there has been a steady decline in construction spending on religious facilities, and it’s been declining for more than a decade.
As someone who’s performed numerous appraisals of church buildings and other religious facilities, I can tell you that when these properties sell, it’s typically for a significant discount. There are several reasons for that.
- Church buildings and most religious facilities are considered a special purpose type of property. That is, they were specifically designed for a special purpose, and usually do not lend themselves well to a secondary use. While it may be possible to convert a sanctuary to a professional office building or warehouse space, the renovation costs are likely to be significant.
- There is a strong correlation between church growth and neighborhood conditions. While there are some exceptions, growing churches are typically found in growing neighborhoods, and declining churches are in declining neighborhoods. As the neighborhood goes, so goes the church. At the end of the day, religious facilities are just another type of real estate, the value of which is strongly influenced by location.
- With the exception of investment properties, properties that are performing well, those that are meeting the needs of the owner or occupants, do not usually sell. Although churches sometimes sell because they outgrow their facilities, they’re more often sold because of a problem — one that is typically associated with growth, as discussed above. Problem properties that are also special use properties can be subject to extremely long marketing times.
It’s likely that construction spending on religious facilities will level off at some point, maybe even improve somewhat, but I don’t expect the general direction downward to change significantly in the foreseeable future. The overall outlook for religious facilities — and religion as a whole — does not look promising.
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