The Pastor & the Parsonage

While becoming less so over time, many churches still provide a parsonage for their pastor’s residence.  For pastoral leaders, it’s important to know the pros and cons of this housing option. 

In general, parsonages are of a greater advantage to churches.  In lieu of paying a housing allowance, churches can cover their pastor’s housing costs by way of their church owned parsonage at a usually much lower cost.  Unless the church has a mortgage on the parsonage (most do not), the parsonage costs to the church are usually for upkeep, utilities, yard care and any needed repairs. 

As a comparison, the typical housing allowance (which varies greatly among synods) for pastors is usually around $9000 to $12000 per year.  Operating a parsonage instead of providing a housing allowance can often save a church half to three fourths of the cost of the housing allowance!  This is often a great win for churches and in addition, the pastor and their family living in a parsonage are usually fairly closely located to the church – another benefit to the church.

The cons for churches with a parsonage can include fewer pastoral candidates to select from (some will not consider a parsonage) and there is less tying down a pastor to a church, such that they can change calls more easily with no home to sell. 

For pastors there are some very significant pros and cons to the parsonage housing arrangement.
Pros include:

• No home to sell at the end of a call
• Parsonage maintenance is at the church’s expense
• No financial risk in the housing market

Cons include:

• No housing allowance
• Loss of potential housing equity appreciation
• Loss of the tax benefit of a housing allowance (this is huge!)
• Possibly living very close to work (could be a pro and con)
• Possible lack of privacy depending on how the parsonage utilization is understood
• Possibility of becoming immediately without housing at the end of a call or death of the pastor.

The common thought is that parsonages are of more benefit to churches than to pastors. While Pastors reduce potential financial risk by living in the parsonage, typically the lower costs for the church and loss of tax benefits to the pastor leaves the church coming out ahead more often than not. 

With all this said, there is an important caveat to this discussion regarding parsonages.  In markets where housing costs are extremely high or in very slow real estate markets, parsonages could become a better win/win for churches and pastors.