By Robert Kitchen
A house sits in close proximity to a church building. One family seems to go in and out frequently. But, wait, other families also go in and out. Whose house is this?
The preacher says it’s his home. Some church members say it’s their house. Oh, the preacher rents the house! Well sort of, but not exactly. It’s the “not exactly” part that is the problem. The home is a parsonage.
Parsonages are houses owned by a church but occupied by a minister; they are akin to company-owned housing from times past. There are times when a parsonage may be advantageous, such as when the housing market is depressed or depreciating, or when it is used by an itinerant preacher or a missionary on leave. Generally, however, a parsonage is a remnant of the past.
“Not Exactly” Circumstances
Church members often become very possessive of the parsonage. They think they can use it at any time for any purpose. They are discourteous and don’t respect the privacy of the minister’s family. Simply being in constant view of members is like living in a fishbowl. Problems also may arise when the members’ tastes and objectives do not match those of the minister’s family. Sometimes the parsonage is considered an extension of the church office.
For the church, a significantly different role is assumed when there is a parsonage. That is, the church becomes a landlord, of sorts. In this role, the church is responsible for updating, maintenance, and repairs. But at times some of these items are delegated to, or expected of, the tenant—the minister. The haziness of the arrangement often generates conflict, especially if the parsonage family does not have the time, talents, or resources to do things as (or when) expected by others. And church volunteers can be slow with improvements. It can be tricky for a church to ask a minister to move from the parsonage, or for a minister to inform the church he desires to move out.
Churches often expect the minister and his family to live like them. Usually a majority of the members are homeowners. As long as ministers are renters (sort of) there will be differences.
Providing a parsonage gives the church an excuse to reduce the minister’s pay. But this is a false economy. The church has to pay for the house in the first place and then holds a continuing investment without thinking how the minister is affected. Perhaps the funds could be better utilized for ministry. The church’s primary business is not property ownership and rental.
Financial advisers generally recommend buying rather than renting (except for short-term residency) because a homeowner builds equity through principal payments. Home ownership is the primary investment for a majority of us. But when a minister has a reduced salary because of a parsonage, he and his family are unable to participate in this investment. This means a minister may reach retirement without provision for an established home. The church has bought a house for itself with the minister’s pay. Severance payments seldom provide more than a very short-term solution to this problem.
Churches with parsonages may want to consider their ownership position and select some other alternatives, such as: (1) becoming a real landlord; (2) selling the parsonage; (3) converting the parsonage to some other use; or (4) keeping the parsonage but providing some alternative to the minister’s missing gain.
If the parsonage is rented, the rental income could provide the additional salary needed to allow the minister to purchase his own home. This, of course, leaves the church in the rental business. A loan for initial purchase could be made to the minister that is repaid (or forgiven) any time up to the time he sells his house. The same or similar procedure could apply if the parsonage is sold or converted. See your tax consultant on these alternatives.
If the house is kept as a parsonage, a couple of possibilities are to increase the minister’s pay or establish an “equity fund” based on the amount principal payments and appreciation would increase equity. The principal would be derived from an amortization schedule based on the value of the property and current interest rates. The appreciation may be calculated on the average value increases in the area. This data can be secured from any real estate agent. This arrangement doesn’t solve the “not exactly” circumstances but does reward the minister’s longevity since equity builds faster the longer the home is occupied.
Providing properly for those who work in the Lord’s vineyard has biblical support in many Scriptures. One reference is in 1 Corinthians 9:11 and following. Paul writes, “If we have sown spiritual seed among you, is it too much if we reap a material harvest from you? . . . The Lord has commanded that those who preach the gospel should receive their living from the gospel.”
Robert Kitchen is a retired accountant, new church consultant, and elder at Parkside Christian Church in Cincinnati.