Home sweet home

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We’ve heard an awful lot about the housing market, as of late. Those Adjustable Rate Mortgages are adjusting, and the results aren’t pretty. Foreclosures abound. People are losing the roofs over their heads.

As a pastor, I’ve been told to sign on to an ARM on several occasions. Thank God, I never did. But the people who were trying to talk me into it (often bankers) were quite persuasive.

Actually, what was compelling was simply trying to figure out some way to be able to afford a home. Pastors are often in a difficult position, nowadays. We often don’t make enough money to live in the area in which we minister.

The D.C. churches are just starting to figure this out, as more and more new pastor negotiations begin to crumble around cost-of-living issues. I think congregations might be waking up.

It’s just difficult. Our calling committees are filled with people in their sixties, who bought their homes when the a high mortgage equaled two years’ salary (revised on 4/8, I originally had one year, but I was advised that it was two). Now, mortgages can be ten times a year’s salary. And, of course, churches never have enough money.

In the PCUSA, each church used to have a manse (or parsonage, or church-owned home). And it worked out pretty well, because the age expectancy was low. But then, people began to live well past their retirement age, and when they hit 65, they moved out of the manse, with nowhere to go. While most Americans relied heavily on the housing equity to get through their twilight years, pastors had nothing to draw upon.

So, churches began to sell their homes and pastors began buying their own places. Which worked for a short time. But then housing costs ballooned. This is fantastic news for the Boomers who are about to hang it up, but it’s not working out too well for a new generation of pastors entering the ministry.

What’s the future of housing for pastors? Here are some options:

Church-owned home. This could be great, especially if you live in an urban area, where there’s no way to afford a place in the neighborhood. But, there are some considerable problems with this arrangement. I know. I lived in one. Other than the equity thing, maintenance is often an issue, because the church members are not so fast and furious about getting things done. And, of course, then they’d rather do it themselves than hire a professional. And I won’t even mention the faux-Laura-Ashley bountiful rose borders that I had to look at for three years (they put them up just for me, without asking. Because they knew I would love them).

Church-owned home, with an equity account. I’ve heard of congregations setting these up. The pastor lives in a manse, but also has an account where equity can accrue at the rate that it would if s/he owned the home. Potential problems? We miss out on significant tax advantages if we don’t own our homes. Plus, I don’t think the equity accounts consider the fluctuations in housing prices.

Shared-equity home. This is what I have now. We own two-thirds. The church owns one-third. There are all kinds of good and bad things about the arrangement. A couple good things: we live in a neighborhood that we could never afford, close to the church. The arrangement takes a lot of pressure off of us. I mean, we have enough money to live comfortably. A couple bad things: we assume all the costs for taxes, maintenance, lawn care, etc. And the church will get one-third of the profit (or loss). And, like a manse, the house is tied to the job.

Living far away from our church was never an option for us. It’s just terrible environmental stewardship, among other things.

So, what do you think our future options will be? What’s better? The manse or owning a home? What should seminarians look for? What do you know now that you wish you knew earlier?

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10 thoughts on “Home sweet home

  1. No manse. We lived in a 200+ year old manse during our first call. It was hell to get the church to make necessary repairs. But I agree that churches need to reimagine what it means to have pastors in the neighborhood.

  2. Coming into ministry at 41, I already owned a home. It’s hard to imagine leaving this house, ever, given that I now have ten years putting in payments, but have seen only a little of the principal paid off, things being what they are. Two years ago I might have sold the house for a huge profit, but unless we had been moving to a much less-expensive rural area, we couldn’t have bought another house. I guess my point is even those of us who came in with a house feel trapped by our relatively low income prospects and by the current housing market. I guess I will stay here as long as I can, continuing to discern whether interim ministry is a long-term calling or a gift of God’s grace that will allow me to finish raising my children in their familiar home.
    I’ve never heard of an arrangement quite like yours. Why doesn’t the church have responsibility for a third of the expenses, too? Seems like that would have been more equitable.

  3. Songbird,

    Ugh. You are so right about the front-loaded interest payments. Our mortgages are constructed so that we stay in one place for thirty years. But how often does that happen?

    “Why doesn’t the church have responsibility for a third of the expenses, too?”

    Well, you know, it was just one of the downfalls of what I negotiated. Like I said, there are plusses and minuses about the whole thing. The D.C. housing market was really hot when I got into this… so the deal was negotiated with the assumption that we would be making money if we had the chance to get into the market.

    There is a calculation so that any major improvement that we pay for would positively affect our percentages in the final sales price.

  4. Well, I LOVED being in a manse, as it’s the only chance this single income, never once made the presbytery minimum person has ever had to live in an actual house. I miss it desperately.

    One of our recent grads took an associate gig at a church that provides their associate with a manse in the form of a condo in a great complex with a pool, tennis courts, gym, on-site day care, etc. It’s a much better set-up than a traditional manse, because the church just pays the condo association to take care of all the major maintenance issues. You don’t have to ask your employer to fix the leaking roof. Had he stayed, he had the option of buying the condo from the church, and they set aside a portion of his salary every month (with his permission) toward the down payment. When he decided to leave instead, they returned the down payment savings–with interest–to him. (The church now owns the condo outright, and only pays the annual association fee on it.)

    I know that there are real downsides to manses, and people who have more family income want, and should be able to have, their own homes. But if a manse is a better option for the church or pastor, I think this condo set-up is a pretty thoughtful, easy route. (And it could also be a house with a maintenance plan, too–just something that gets the repairs out of the hands of the church.)

  5. When I took this call, I came off of seminary and a year as a YAV…and I moved into a suburban area with very little rental property. I had to buy in order to move here. I got the cheapest condo on the market when I moved here and still my housing costs are easily 45% of my total salary, possibly more. I know that mortgage/utilities/association fees/etc shouldn’t be more than 40% but that’s just not feasible for me. While I don’t want to live in a manse, and I don’t really like the shared equity thing, it is hard to start out in a first call and a first house (and all the other firsts that come with being a “new” grown up, especially one who’s moved a lot and has lived overseas and therefore has no furniture, etc). And, of course, buying a house means that you can’t really receive a gift of a down payment or other help from family (who might be willing to give it) because it has negative impact on the interest rate you qualify for.

    I sort of like the condo-manse idea, where part of the salary is put aside for a down payment–since then later it can be used for a down payment somewhere else if you take a different call. But then again, I love living in a condo where I have no snow removal/grass mowing/roof fixing responsibilities!

    I don’t know what a long term answer will be, but I do know that most churches, especially those that can barely afford a pastor as it is, can’t afford to pay enough for a new pastor to get started in the housing market, even if housing prices drop significantly. I find that worrisome, particularly since young people starting out already have significant other debt.

  6. I like the condo idea as well. You know, aside from the maintenance difficulties, I must say that living in a manse allowed us to save enough money for our first down payment. And it assured that we had housing PLUS a salary. Now, I think Teri’s 45% scenario is common.

  7. We are just finally about to have my husband become a wage earner, which, in theory, means we could now afford to to live in the area where my church is. We’ve been renting a house that is literally falling in on us.

    But, we’re going to find another house to rent, pay a little more, and not buy.

    As an associate, I cannot guarantee that we’ll be here for 10 years. To buy would be foolhardy. But my church folk are confused by this: the church offered to help with a lower rate mortgage package, but there are all kinds of issues around that.

    As a former PK who lived through some pretty horrific manse situations (sewage in the basement, the great shag carpet debacle of 1984, etc.) I still think there could be a role for a manse. For associates who are paid less than head of staffs, just starting out, often have debt, and, in reality, won’t necessarily stay in the market long enough to really get any benefit out of buying, a manse could be a really nice option.

  8. I really appreciate your post…I just came across your blog after hearing your interview at DAIO. I have been having this conversation with the interim search committee at my church (i am an associate). They just had a candidate turn down the position because they couldn’t offer a good package. The session was a bit taken back, thinking, “Well maybe he’s not right for us if he’s going to be about the money” But when I started putting the salary in terms of being able to afford a home near the church, they all kind of sat back, and said, “huh” like it was a totally new concept. The retired pastor bought his house way before prices went so high, plus he was never really paid what he should have been. So now the church is faced with coming up with a much higher salary package than they have ever paid.

    I was able to buy a home in a decent neighborhood because my husband is quite handy – we bought a definite fixer-upper and are putting in the sweat equity, otherwise it wouldn’t have been possible. Of course, the cost of living here in the suburbs isn’t nearly what it is in larger cities.

  9. The search committee sure is lucky to have you around! And it’s good that the candidate was honest. It’s so hard to be upfront about this stuff, especially when we have the concern of looking greedy when we are.

    I hope that more of these conversations start taking place.

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