Edition: U.S. / Global

Talking: Parsonages; Housing For the Clergy

Published: December 1, 1991

THE parsonage, a slice of congregational real estate often cited in works of literature and history, seemed for a spell to be on the endangered list. The cause of its demise was the lure of the profits being reaped by lay people during the property boom of the 1980's.

The clergy were not above temptation, and some considered a home that would appreciate for them an essential part of their financial planning. "Everyone started talking about missing out on the opportunity to build equity like other people and have something for retirement," said Manfred Holck, a retired Lutheran minister in Austin, Tex., who publishes The Clergy Journal, a nondenominational monthly for church professionals. This attitude became so common that even today most congregations building a new church or synagogue do not build a parsonage or clergy house alongside it.

Moreover, trustees and elders were discovering that money could be raised for a financially beleaguered congregation by selling the existing parsonage at a time when property values were hot.

But preparing to recite the last rites over the parsonage concept may have been premature. Because of the downturn in the real estate market, some congregations have reversed their strategies and are now buying or renting property for their clergy. .

William Briggs, minister of the New York Conference of the United Church of Christ, noted that a parsonage aids mobility, especially in a weak market -- important for younger clergy who move on average every three or four years. Ministerial careers could be stymied and congregations stuck with a frustrated pastor, he warned, if selling a home became an obstacle to moving.

Further, he said, congregations in betterneighborhoods have come to appreciate that a parsonage can provide convenient and appropriate housing that would otherwise be far beyond the financial reach of a minister, even with a generous housing allowance.

"For 15 years I was saying, 'Buy, buy, buy,' " said Rabbi Joseph B. Glaser, executive vice president of the Conference of American Rabbis. "Now I recommend renting, at least for the first few years until you are sure you will be staying on. Or, be glad that housing is being offered."

His group, he said, had lately become alarmed by the losses some of its members were taking on property bought in the 1980's. This occurred most often, he said, when a rabbi felt compelled to move in a hurry, either because of a dispute with the congregation or because a particularly attractive position opened up in another town.

The revival of the parsonage has received an added boost as a result of the number of tempting properties languishing on the market that might have been prohibitively expensive only a few years ago.

Consider the strategy of the First United Methodist Church of Carrollton, Tex. Twelve years ago it discontinued its parsonage system. But when two adjacent city lots -- one with a house on a quarter acre -- became available last year, the church saw it, said Maurice Carlton, the church administrator, as a double opportunity: a chance to provide a home for its junior minister, who couldn't afford to buy a home or rent anything comparable nearby, and an opportunity to add land for the expansion of its Carrollton Christian Academy, a 670-student day school, and its rapidly growing 3,000-member church.

INDEED, these observers suggest that this time around it might be the junior minister who uses the parsonage. This is expected to occur most often in larger, more affluent congregations where the presence of more than one minister tends to coincide with higher area housing costs. Meanwhile, the senior minister -- who enjoys a higher income and is more professionally stable -- might still be better served by buying something of his own.

Mr. Holck of The Clergy Journal recommends having the congregation take a long-term lease on a suitable apartment or small house rather than leave the young minister to seek something on his own. While he concedes that this inhibits personal choice, he argues that such a longer-term lease guaranteed by a congregation can often be negotiated at a lower price than if the minister were to go it alone.

A second suggestion he offers is for a congregation to buy one of today's bargain-priced properties while the opportunity lasts, such as a condominium at auction. Alternatively, he suggests looking into buying property being offered by the Resolution Trust Corporation under its Affordable Housing Disposition Program. Although the intended beneficiaries are nonprofit organizations that house lower-income families, the designation all too often characterizes the income of a junior minister, too.

For details call the nearest regional R.T.C. office. The offices are in Denver, Kansas City, Atlanta and Dallas. In the Northeast, call the sales center at Somerset, N.J. -- (908) 805-4000.

Mr. Briggs advises junior clergy who accept parsonage housing to protect their future and retirement needs by investing in an inexpensive vacation home as early as they can -- something he finds increasingly feasible for married ministers with dual family incomes. "It helps you put down roots in one place," he said, "as well as giving you somewhere you know will always be your own."

By contrast, these experts still encourage senior clergy planning to remain with a congregation indefinitely to buy their own homes even if it means negotiating with the trustees for help with a down payment or subsidized mortgage.

Mr. Holck, who is a certified public accountant, said the tax structure offers major home-owning benefits to clergy. Not only can they deduct the mortgage interest and property taxes from their regular incomes like everyone else, he said, but they can also deduct the same costs from their housing allowance all over again.

A housing allowance is fully tax deductible to the extent that it is used to cover housing costs, he noted. Eligible costs include maintenance, utilities and yard care. Congregations typically divide clergy income into two parts, ordinary income and a housing allowance, assuming parsonage housing is not provided.

Finally, Rabbi Glaser has warned his home-owning members not to expect a congregation to bail them out of a loss should they leave the congregation. The only way a member might recoup all or part of a potential loss on sale, he said, would be to have such an amount incorporated into a relocation allowance provided by a new congregation.