The property-tax exemption for religious institutions has been in the news of late. In Wisconsin, the legislature passed a measure that revoked the exemption granted to Presbyterian House at the University of Wisconsin for the student rental complex they constructed several years ago. Gov. Walker vetoed the measure. St. Francis House, the Episcopal Chaplaincy at UW is also proposing a housing development on its site, although plans there are for the project to return to the property tax rolls. From the comments on these stories, it’s clear that the property tax exemption strikes raw nerves.

Meanwhile, city officials in Palmer, Massachusetts, have asked several non-profits, from the Chamber of Commerce, to churches, to make payments to the city in lieu of taxes (this idea is not new; Harvard University has been making substantial payments to the cities of Cambridge and Boston for many years).

Matt Yglesias has posted on this issue. He argues that:

Urban land is a scarce commodity, and structures are valuable fixed assets. If you tax land and structures that are operated as homes and business, but don’t tax land and structures that are operated as churches, you end up with more land being used for churches and less being used for homes and businesses than would otherwise be the case.

This is silly. Take Grace Church for example. Grace is on the National Register of Historical Places; it is also landmarked by the city. As such, the property has no value except to members of Grace Church. If we were to abandon the property, as so many churches have been abandoned in America’s cities due to population shifts and declining attendance, the property would probably remain vacant. No other church would purchase it. The space is ill-suited for the needs of contemporary worship: there’s no parking, the space is not airconditioned, and barely handicapped accessible. No other other entity would be interested in it, either, except a themed restaurant-nightclub, perhaps.

At the same time, we provide valuable services to the city and the community: housing a homeless shelter that would be incredibly difficult to relocate, a food pantry, space for AA and other community meetings. Yglesias himself often argues about the importance of balance in urban planning, and we offer that as well, a courtyard garden that is much appreciated by local residents and tourists, a beautiful space that beckons even non-churchgoers who sense the sacred when they enter it.

I suspect that at some point in the future, the property tax exemption will be challenged, if not in Madison, the home of the Freedom from Religion Foundation, then in another part of the country. When that happens, some religious institutions will be forced to close their doors, and my guess would be that many of the endangered congregations would be located in old buildings in towns and cities that are already struggling to make ends meet, impoverishing the cultural and historical landscape of our communities.