A church in the heart of the city, with a heart for the city

Diocese of Pennsylvania’s Transformation Initiative envisions new uses for 26 church properties

April 01, 2026

[Episcopal News Service] Here’s a number that has weighed on the minds of Episcopal leaders in the Diocese of Pennsylvania and on the budgets of some of the diocese’s 136 congregations: 2.5 million. That is how much space in square feet the diocese determined was underutilized across all its church properties, many of them more than 100 years old and bearing high maintenance costs. For years under Bishop Daniel Gutiérrez leadership, the diocese has sought ways to reimagine and revive that space for new cost-effective uses. It is now acting on a plan, dubbed the Transformation Initiative, that could add more than 1,000 housing units to church properties through a new partnership with the Michaels Organization, one of the United States’ largest developers of multifamily housing. The diocese identified 26 church properties in Philadelphia and its surrounding four counties where housing redevelopment projects could be viable — not to replace those congregations, but to make more productive use of their campuses. The Michaels Organization was hired to work with each of the congregations on a redevelopment action plan. The goal is to ensure the diocese’s worshipping communities continue to have places to congregate and tools for ministry for years to come, Gutiérrez said. “Liberated by the anxiety of structures, we can go out and serve the poor, reflecting the hope and love of our Savior,” he said in a written statement. “All things are being made new, and in the process, we are building a community and preparing for the next 250 years.” Under a separate but related branch of the Transformation Initiative, the diocese is working with another test group of congregations to launch a program of diocesan administrative support services. The diocese intends to leverage expertise in a range of tasks, from financial accounting to web design, to relieve local leaders of some of those burdens. The initiative comes at a time when dioceses across The Episcopal Church are considering new ways of absorbing the rising cost of maintaining aging facilities while repurposing some of those properties for new uses. The Diocese of Missouri, for example, has worked with its congregations over the past several years on a range of maintenance projects after paying for professional inspections of each church building. Housing projects are increasingly common in dioceses looking for ways their properties can be used to better serve the communities’ needs. Several such projects are completed or underway in the Diocese of Los Angeles, which set a goal of creating affordable housing on at least 25% of its southern and central California churches. Gutiérrez said he has pushed for a comprehensive diocesan property strategy nearly from the day he was consecrated bishop of Pennsylvania in 2016, drawing on his former career in local government and economic development in New Mexico. In 2023, the diocese’s Board of Trustees authorized $4 million in proceeds from the 2021 sale of the Wapiti diocesan retreat property in Maryland to be used as seed money for the Transformation Initiative. The initiative is now led by a team of Episcopalians with expertise in development, law and financing who are working with the Michaels Organization on plans to invest in the 26 participating church properties. Through the partnership, the diocese will pay Michaels to create housing units on the properties, which will still be owned by the diocese, and a portion of the anticipated rental revenue will be reinvested in congregations and their ministries. “We feel privileged that the diocese has entrusted Michaels with this important initiative,” Milton Pratt, Michaels’ executive vice president of development, said in a statement shared on the diocese’s website. “We have tremendous respect for the financial stewardship that the Initiative members have shown, and we are working in close collaboration with them to maximize their ability to serve their ministry and their local parishes, as well as the greater community.” The diocese has not yet publicly identified the participating churches, and the types of redevelopment projects are likely to vary from site to site. The Michaels Organization has said the size of the housing developments could range from 30 to 150 units each with different market approaches, such as workforce housing, affordable housing, market rate units and developments intended for people 55 and older. Some also may include space for non-residential uses. “We’re hoping to be able to generate revenues from underutilized properties, for the benefit of the diocese and the benefit of those churches,” Albert Dandridge III, who chairs the Transformation Initiative, told Episcopal News Service. The projects will not require demolishing active worship spaces, Dandridge said, but rather will focus on redeveloping the churches’ underutilized space, such as parking lots or vacant rectories. The next steps include working with Michaels to conduct preliminary reviews of the properties to determine their highest uses. After that, the timeline isn’t set in stone, though the Transformation Initiative leaders expect construction to begin by late 2026. – David Paulsen is a senior reporter and editor for Episcopal News Service based in Wisconsin. He can be reached at dpaulsen@episcopalchurch.org.