Property rich, cash poor: How churches can help solve Canada's housing crisis

Father David Bryan Hoopes was sitting on the front porch of a Victorian-era heritage home on a corner of a prominent tree-lined street in west-end Toronto. It was the end of the workday, and he was enjoying a cup of tea and watching the neighbourhood go by, one of the many things the 80-year-old Anglican monk and longtime resident is going to miss about the stately home the New York-based Order of the Holy Cross has owned since the early 1980s.

Maintaining an eight-bedroom, four-bathroom, 5,000-square-foot, 19th-century beauty, with an altar in the main floor living room for saying mass each morning, had become too much. Repairs are never cheap, and the monthly bills have grown increasingly difficult to keep up with, particularly on a monk’s humble salary, despite sharing the costs with two other Anglican brothers who live there. Once upon a more monkish time, there were eight.

“Deciding to sell this house was not a happy decision,” Hoopes said.

He was dressed in comfortable black shoes, a white shirt and slightly weathered grey dress pants; the only clue to his professional calling was a chunky wooden cross around his neck. Hoopes’ accent betrayed his English roots, and his perspective on the earthly matter of real estate in the big city and Canada at large bordered on outrage.

One block north of the heritage home is the shell of a hulking, 100-year-old-or-so church that a developer is hollowing out to turn into condos and loft spaces with $1-million-plus price tags. Kitty corner to the construction site is the Czechoslovak Baptist Church, long since converted into lofts with price tags of $1 million or more.

Two blocks east is the Victoria-Royce Presbyterian Church, once home to 1,200 parishioners on Sundays, but the faithful who gather there today are the niche-market types who can afford to shell out $1.25 million, give or take, for a two-bedroom unit in a church-conversion project that won a City of Toronto heritage award for architectural conservation and craftsmanship. The building is indeed a stunner, but it is what people pay to get inside it that most rankles the monk.

“I am going to use some strong language here,” Hoopes warned. “Today’s housing market is iniquitous. It is crazy. Even a modest house costs $1 million and a modest apartment costs $2,000 a month to rent. They are not worth it.”

But churches are often money pits, given the expensive repairs needed, and their dwindling congregations can no longer foot the bill to maintain them. So when a developer appears with a $5.7-million cheque — as was the case with the former church a block from the monks’ residence that sold in 2015 — selling an old pile of bricks and moving on can seem self-evident to the flock.

Times change, however, and an alternative narrative around church properties has emerged in recent years, one that is not driven by developers dangling big, juicy cheques, but by a growing awareness among faith-based communities that they may be the ones holding the metaphorical real estate hammer in conversations involving their property.

Church land in major cities is often incredibly expensive, ideally situated and only increasing in value. Leveraging the value of that property for redevelopment means creating scenarios where the church, the guys with the big cheques and the great mass of Canadians who desperately need an affordable place or even any place at all to live get what they want.

“Let’s face it, all the mainline churches are in decline, and so this has created a crisis, but a crisis can lead to some creative thinking,” Reverend Dale Woods, of Central Presbyterian Church in Vancouver, said. “The fundamental question facing the church today is: how does it steward its own resources — this incredibly expensive real estate — in a way that remains faithful to its own calling, which is to build better communities?”

That is the sort of question Brian Dolehide spends a good chunk of his time thinking about. He is not a reverend, but a real estate broker/adviser and his Chicago-based company, Revere Midwest Corp. (better known as Anno Domini (A.D.) Advisors), deals exclusively with the Catholic Church, north and south of the border

“We are not really the guy on the corner looking to sell a church,” he said.

His father was a doctor at a Catholic hospital in Chicago, back in the days when nuns still worked the wards as nurses. The sisters spoiled him with attention, but what struck him most was their devotion: they did what they could to help the sick and the suffering.

Now, most of the sisters, if not already dead, are well into their sunset years, but many orders of nuns still own sizable tracts of valuable land — for example, on prime Lake Michigan shoreline in Wisconsin. Dolehide had just come back from meeting with some sisters there to discuss what they wanted to do with a lakefront property next to a US$25-million seniors’ complex.

“It is a very valuable piece of property,” he said. “But for the sisters, it is not about the value of the property; it is about the use.”


In other words, the nuns aren’t looking to cash out to the highest bidder and watch the property become a waterfront casino. Seniors’ housing, a school, something related to health care, perhaps, or possibly a park to be enjoyed by the public in perpetuity are what resonate with the sisters.


“My primary mission with the sisters is to preserve their heritage legacy through their health care and real estate,” Dolehide said.


He could not say how much property the Catholic Church owns or to what extent the church sells land to pay various legal settlements around the world, but the Chicago diocese’s real estate portfolio alone includes more than 2,000 buildings and 5,000 acres.


“I would be surprised if the church was not among the top five landowners in the United States,” he said.


The American has also handled a few church-related transactions in Canada. As a general rule, the parking lot next to, say, a cathedral in Quebec City will fetch a far prettier penny than a parking lot by the crossroads church in the middle of nowhere.

Neighbourly needs

Pick your country, whether Canada, the U.S., somewhere in South America or Europe, and Dolehide said church groups are confronted by the same question: What to do with a valuable property when faced with an abundance of need?

To address that question, Reverend Jim Smith, Dale Woods’ predecessor at Central Presbyterian in Vancouver, started from the premise that the congregation was not interested in selling its 136-by-136-foot property and disappearing into the mists of the neighbourhood’s history.

“The property was worth about $6 million when we started discussing redeveloping it in 2005,” he said. “Today, it is probably worth closer to $30 million, and so had we sold it back then, we would never have been able to buy back into the Vancouver market.”

Figuring out what to do with the site, which wasn’t a historic property, but home to a relative junker of a church that was built in haste in the mid-1970s and had run both its course and out of room to host the various community groups that used the facility, was a good problem to have.


We were a classic church group ... property rich, cash poor, big dreams


“We were a classic church group,” Smith said. “Property rich, cash poor, big dreams.”

The ultimate dream? Build an expanded church/community space, 45 subsidized rental apartments and a commercial space. Fortunately, a chance encounter with an architect led to an introduction to two major players in Vancouver real estate development circles.

“The first individual we met came across like Sam Slick from Sam Slick’s Used Cars,” Smith said, and then laughed. “But then we met Colin Bosa. He presented us with a deal that sounded too good to be true, only it was true.”

Bosa is the son of Robert Bosa, an Italian immigrant and high school dropout. The elder Bosa came to Canada penniless in 1958 and became a journeyman carpenter. He built garages, went into business with two of his brothers and eventually went out on his own, founding Bosa Properties Ltd. in the early 1990s.

The business grew into a full-envelope developer that builds condos, apartments, planned communities and other things throughout lower mainland British Columbia, and is run today by Bosa’s 50-something-year-old middle child. The younger Bosa did just about every job, “learning the ropes,” around the place before assuming the chief executive’s chair.

Among the business/life lessons his father drilled into him along the way was “doing things right, and doing the right things,” he said.

Bosa Properties is a for-profit business, but the profit motive does not eclipse dealing honestly with its partners and initially working off a handshake deal between a CEO and a reverend.

“Colin’s a really cool guy,” Smith said.

The church, in its dreamy enthusiasm, was considering acting as the lead on the redevelopment. Bosa talked the reverend out of it. Developing properties in Vancouver involves wading through reams of red tape. There are lawyers, engineers, rezoning applications, environmental hoops to crawl through, guys with backhoes and hardhats, project-conception-to-occupancy timelines that can stretch to six, seven, eight years, and a significant amount of financial risk.

Should some misery befall a project that pushes it into bankruptcy, the church’s sole asset would have been the church itself. So, Bosa sold the reverend on another idea: the church would effectively hand ownership of its property over to his company. The property was then carved into four air rights parcels — air rights being the space above the property for development.


The result has been a win, win, win


Then, Bosa and Co. built exactly what the church wanted, right down to the interior finishes of the 45 rent-subsidized suites. The developer paid for everything, including the church’s real estate lawyer fees, billed by a blue-chip Canadian law firm. (The handshake deal was formalized by a contract in 2014).

The kicker? Bosa handed ownership of three air parcels back to the church, keeping one for Bosa Properties that is home today to an at-market rental apartment with 162 units, including two-bedroom penthouse suites that fetch close to $5,000 a month.

“The developer was able to do what a developer needs to do: build and get a reward for the building,” Dale Woods said. “And the church was able to do what it was called to do, which is to try to do something for the neighbourhood and also provide a base for its own faith-based community. The result has been a win, win, win.”

Central Presbyterian today is buzzing with action. There is a daycare, food bank, community kitchen and ample public space for neighbourhood groups to gather, and support groups, such as Alcoholics Anonymous, to meet in. There is also a chapel named after Reverend Jim Smith.


Bosa believes the redevelopment of big-city church sites can help take a bite out of the housing crisis and boost the number of below-market rent units getting built. Alas, he said, the deal he made with Central Presbyterian might not necessarily be doable today. Interest rates aren’t what they were in 2014, let alone 2018, when the project was completed, and neither is the cost of labour.

Evil red tape

But the real devil in the development mix is the overly complex regulatory environment. Getting anything built involves arduous, years-long slogs in a climate that has become increasingly less friendly to real estate investors.

“There is a lot of talk about building rental; on the flip side, there is a lot of new regulation around the investor,” Bosa said. “The flipping tax, the vacancy tax and how we deal with renters. I am not suggesting it has been all bad, but it has been an assault on the investor.”

Risk-takers aren’t going to take risks when the math doesn’t add up to earning a tidy return on their investment, no matter how much land the churches are sitting on and willing to sell.

The scale of those holdings and their value is what led the United Church of Canada to establish United Property Resources Corp. (UPRC) five years ago to assist church entities “in making faithful and prudent property decisions.” It was an acknowledgement by the church that an individual congregation’s expertise in putting on a community church supper doesn’t necessarily translate into executing a major redevelopment scheme.

“The United Church is getting much more careful about selling property,” Reverend Jim Keenan, of St. Luke’s United in Toronto, said. “Typically, the reason a church gets offered a big pile of money is because they are in a very valuable space.”

Enter Tim Blair and David Constable, co-founders of Kindred Works, founded in partnership with the UPRC in 2022. The pair weren’t churchgoers, but real estate development pros. Blair’s background is in real estate-related investment banking; Constable is a veteran architect.

Kindred Works’ mission is to “unlock” the value of the church’s real estate portfolio with the goal of delivering a financial reward and making an environmental and social impact. It is a formula where St. Luke’s, in this case, becomes an investor in its proposed redevelopment by chipping in a critical asset: its building.

Situated in a part of Toronto where gentrification slams up against poverty, the site plan for St. Luke’s calls for a 12-storey, mixed-income apartment building featuring 100 units, 30 per cent of which are to be rented at below-market rates.

Generous space will be set aside for community rentals and a community kitchen. The food bank currently operating onsite and serving 1,100 people every three days won’t be going anywhere, and neither will the congregation, a mishmash of old “white” people, including the reverend, as well as new Canadians and others.

The shovels aren’t in the ground yet, but once the project is finished, the church will get a slice of the income produced by the property. Kindred Works will manage the asset and ideally apply some of the lessons it learns to building a wider portfolio of properties, both those of the United Church as well as other faith-based groups, not-for-profits, private landowners and municipalities with land and an interest in densification.

The goal is to streamline costs and move the company closer to its stated goal of being a net-zero entity responsible for delivering tens of thousands of mixed-income rental housing units.

“This has the potential to be one of the largest urban infill land banks in the country when you look at it collectively,” Blair said.

No choice

Down the highway from Toronto in Hamilton, Paul Oberst was looking at the past and a painful memory when, much to the relief of his spouse, he sold a custom, five-foot-long circular pew that he had salvaged from Victoria-Royce Presbyterian Church to an antique dealer.

The silver lining is that Oberst’s ambition from the outset wasn’t to knock the “crap” out of the structure, but to preserve as much of its character as possible.

“The basic rule of preserving historic architecture is to use it or lose it,” said Oberst, who affectionately refers to Victoria-Royce as his pride and joy. “If you can find a use, you have saved the architecture and that’s a fabulous thing to do because, among other things, the greenest building you can build is the one that is already standing.”

Therein lies the opportunity for faith-based communities, as the bills related to old piles of bricks pile up: by recognizing the value of what they already own and using it as a bargaining chip, selling, even to a Kentuckian-preservationist architect, will no longer seem like the only option.

A five-minute walk from Victoria-Royce, an 80-year-old monk could be found having tea on the front porch of a historic home with a “For Sale” sign out front. There was talk of converting the monk’s house into a hospice, but the costs and logistics of doing so were prohibitive. Carving the home into separate apartments was not a fit, either, so the house is in the process of being sold as a single family home to a couple with a child and the means to afford a $3.4-million heritage property.

“That pew aggravated my wife to no end,” the 77-year-old native Kentuckian said

Oberst, an architect, came to Toronto in 1970 and became involved with an obscure, avant-garde puppet theatre group (it is a long story) and generally fell in love with the city’s heritage architecture, including the massive chunk of “muscular” church masonry known as Victoria-Royce. He and a partner bought the building for $2.15 million in 2006.

“The church had no choice but to sell,” he said.

In its post-Second World War heyday, Victoria-Royce attracted 1,200 parishioners for Sunday services. By the time Oberst came along, the pews were nearly empty, the bills were piling up and the red-brick church with the steeply pitched, cross-gable roof was looking for a way out.

The buyer’s intention, according to David Hoopes, is to fully restore the house to its former grandeur. The monks’ ranks include a Wall-Street-banker-turned-Anglican brother, and the proceeds from the sale are to be wisely managed and earmarked for the care of the aging brothers and the charitable causes they support.

“We never really retire, you know,” Hoopes said, smiling. “But I like to think of this house being full of laughter and of having a new life.”