March 27, 2009

The User’s Guide: The Economy’s Toll on Religious Buildings
Church donation coffers are coming back light, and that means less work for religious facility architects

by Zach Mortice
Associate Editor

Summary: It’s hard to imagine any type of building that exists further from the worldly fluctuations and vicissitudes of globalized gold and silver than the art of designing religious worship spaces. But it’s precisely this dependence on altruistic faith that’s tied them to the wider world. As the financial system’s malaise has spread to everyone’s pocketbook, the charitable donations that fuel this part of the design and construction industry have been drying up, stranding faith communities and their architects.

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“It’s the most sensitive to the economy of all non-residential segments,” says Heather Jones, a construction economist with FMI, a construction industry management consultant and investment banking firm. Her firm is predicting double-digit drops in the religious facilities market in 2009 and 2010.

A poll by the Christian consulting firm Dunham + Company found that nearly 50 percent of Christian adults in American have reduced their charitable giving because of the economic downturn as of last summer—before economic conditions worsened dramatically in the fall. John Justus, AIA, a principal at HGA’s Sacramento office who works on religious projects, says his clients are reporting reductions in charitable giving of 20 to 25 percent, and his religion practice is down by roughly 25 percent as well.

As such, architects and economists are predicting a moderate to severe downturn in the design and construction of religious facilities that won’t entirely turn around till the economy at large improves and people again feel secure enough to give. “When people make money on the stock market, they’re more generous in giving it away, and the stock market is down 50 percent over the last year,” says Patrick Newport, of the economic forecasting firm Global Insight.

Out of step with the rest of the market, till now
Certainly, the religious architecture market is insulated from recessions by some of the same development patterns (consistent demand, a lack of speculation, and pre-arranged funding) as other institutional building markets, like the education and health-care sector. Even so, Jim Haughey, chief economist at Reed Construction Data, says this market will be hit hard in 2010. “The bad news takes 18 months to catch up to them, and so does the good news,” he says.

Other forecasts are a bit more forgiving. The AIA’s most recent Consensus Construction Forecast calls for a 9.4 percent reduction in religious facility construction activity in 2009 and a 1.4 percent increase the following year. Meanwhile, Global Insight is predicting a steep 21.8 percent drop in total nonresidential construction for 2009, and the AIA is forecasting that overall design and constriction activity will drop by 11 percent.

Comprising only a few billion dollars per year, the religious facility design and construction market is difficult to track and, in recent years, it’s behaved counter-intuitively to the rest of the market. After the recession of the early 1990s receded, the religious structure market didn’t pick back up until 1996, but by 2000 it had doubled in size. “That’s how long it took the ‘good news’ to get into church construction,” says Haughey.

From 2002 to 2008 the industry was stagnate or receding, according to FMI, even while residential building starts and home prices were rapidly filling an economic bubble that has since burst. Jones says there’s a negative correlation between religious facility construction and mortgage rates because people devoting a higher (and rising) percentage of their income to their homes are less likely to have discretionary funds to give to religious groups. However, she says that today’s precipitously plummeting housing prices are less likely to free up extra cash for donations and more likely to cause widespread economic uncertainly that will constrict the charitable giving that funds religious construction. Jones predicts a gradual turnaround for the religious construction industry sometime in 2011.

Architects say that Catholic churches, which fund building projects in a top-down process directly from the Vatican and local diocese, have been better able to continue with projects because they’re not as dependent on donations as independent Protestant denominations.

Last year, half the projects of Jackson and Ryan, a Houston-based firm that completed $103 million of religious construction in 2008, were religious, but firm principal John Clements, AIA, says that he expects religious facility design to take up only 30 percent of the firm’s portfolio this year. In November, he saw many projects put on hold, and several clients had to renew their fundraising efforts. But after December, Clements says, projects began picking back up, and he’s optimistic that the worst this recession has to offer is behind them. “People are just being more cautious,” he says.

Carter Hord, AIA, principal of Hord Architects in Memphis, which specializes in religious architecture, is also ready for honest optimism. “My hope is that we’ve already crossed the threshold of the bottom of the recession,” he says.

For Justus, the collapse of the nation’s financial system at least feels as though there should be some kind of positive trade-off in a more reverent and spiritual pursuit, like building churches. “When the financial experience isn’t satisfying, people might start looking towards spiritual experiences, or community buildings, and that could mean that church doors could be more open,” he says.

More reasons to build at a modest scale
Today’s economically chastened religious construction industry arrives as other concurrent trends are pulling the scope of the church facilities down as well. After building in popularity over the last decade or so, town-center mega-churches that combine many kinds of community and entertainment programming are becoming less popular and less economically feasible. The areas where they’ve become most common (often rapidly growing communities in the mountain West and the South) have been most deeply affected by mortgage foreclosures, leaving little money for building such grand projects, even though churches there are more likely to be bursting at the seams with congregants. Beyond general belt-tightening that could reduce project size and scope, architects say that church members today are craving a more focused and intimate worship experience in smaller venues. The mega-churches that are built will likely have to sacrifice the audio-visual and performing arts capabilities that have become a mainstay of this building type.

Because of the economic downturn, religious facility architects say that congregations have been forced to slow down master planning schedules and build new facilities in phases. Some churches are also using multi-site approaches that distribute worship services across several smaller venues and locations.

Walk with the client
As a relatively stable market surrounded by economic wreckage in the residential and commercial sectors, religious design can be an attractive place for architects to look for new business opportunities. However, this kind of design work is not easy to break into, as clients and designers find each other largely through informal word-of-mouth networks. It’s also a difficult and complex building type to deal with. Worship facilities often wrap many different kinds of institutional programming together in one building. The designs of these buildings are also influenced by millennia-old liturgical traditions architects must be familiar with. Justus says architects with previous institutional and nonprofit experience will have an edge when looking for religious facility work. Performing arts and educational design experience are additional expertise advantages, as many churches contain audio-visual enabled event spaces and classrooms. Firms with less religious facility experience can pair with expert firms as architects of record to get exposure into this market segment. Potential religious facility projects for firms new to this design discipline can include making buildings ADA compliant, designing new landscaping or courtyards, renovations, repairs, or replacing mechanical systems—which is becoming more and more needed in churches built during the post-WWII population boom.

Most churches use a building committee to hire architects and plan renovations and construction, as opposed to singular clients that often commission commercial or residential work. Interaction with these committees can be complex and unwieldy because of the democratic and consensus-based nature of these groups, but this also presents an opportunity for architects to get first-hand knowledge of how this client type operates. Clements suggests joining a church building committee to gain this perspective and act as an informal adviser for whatever projects they might be taking on.

“Churches want a lot of handholding,” he says. “Your job is to guide that committee from A to B.”

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