Guide to Amending a Pastor’s Housing Allowance

i thought parsonages were all but dead.

In our city, the average price for an average three bedroom family home is over 1.2 million dollars. I've considered leading our church to buy a house to use as a parsonage someday (renting it out in the meantime) since the cost of housing here is so very high.

How would a new younger pastor have a hope of purchasing his own home if they were to start out in our city? I think the church would have to consider some way of helping him build some equity as part of his compensation as well as providing a parsonage.

Nevertheless, it might be time to resurrect the idea of the parsonage, especially in places like ours.

My brother lives in Mountain View, CA, and carefully hides the real estate ads so his landlord never sees them--he's in 1400 square feet built in the 1960s that would go for well north of three million bucks. I'm guessing that's a picture that Don recognizes well. It's a church budget issue that is quite profound--and writing as someone working in tech, I know for a fact that wages are not 5-10x what they are here in MN. So it's not like likely tithes in the Bay Area or Vancouver are that much higher.

Regarding parsonages, you've got something of an issue where in days of yore, you had young men who would likely have a lot of kids--and these days, you very often have empty nesters. So you might have an occasional/often mismatch between the pastor's family size and the parsonage size. Flip side of doing housing allowance is that you've got a disadvantage as the pastor pays rent, or suffers transaction costs when he sells. No easy choices.

Don,

A couple of points. First, buying a home may not be in the cards for a young pastor. I didn't buy a home for the first 6 years of our marriage. Second, the church should provide enough salary to be able to afford what the average person makes/lives in their area. If all of the church members are in $1.2M homes, the church should be able to afford paying their pastor to purchase a $1.2M house. If not, than buying a parsonage won't help, as it is doubtful the church could afford to buy the parsonage. Third, in my experience, churches get into problems in parsonages. Someone comes and ministers for 20 years at the church and then decides to retire. Either the church kicks them out of the parsonage to make way for the new pastor, or they gift the parsonage to the retiring pastor and are now stuck trying to purchase another property for the next pastor. You can easily get into a scenario where a church is trying to manage 3 parsonages for two retired pastors and a new pastor.

Most homeowners in our area bought pre covid when prices were much more manageable. During Covid, construction waned a bit and at the same time our government was insanely (preCovid and postCovid) bringing in huge amounts of immigrants so that demand increased. And governments put huge restrictions and fees on construction, exacerbating an already tight marketplace.

Wages have not kept up with the increase in costs. Not only are prices much higher, but for a typical house rents are astronomical. There is no easy solution to the real estate crisis, but a church has to have some way of managing things for pastors for the future.

I have never seen a scenario about parsonages such as you describe, but I suppose it could happen. I'd think it is highly unusual, though.

I should add that there are ways for a church to afford a parsonage that might not seem obvious. If the down payment could be raised, I would advise the church to buy a building with two suites to offset the cost of the mortgage to start with, leaving one suite as a revenue generator to help with the cost of the mortgage once a new pastor was installed. It's not as insurmountable as you might think.