A focus on zoning practice for small churches and houses of worship across the country could be an opportunity for affordable housing. Given the right circumstances, shrinking congregations present a big opportunity to put a dent in the undersupply of housing across the country. Zoning changes could also be used to explore the potential to support the redevelopment of parking lots and other surplus land owned by religious institutions into more housing supply. Right now the local zoning code must explicitly allow new residences on these properties. And the applicable zoning standards must be flexible enough for residential development to make sense. However the Religious Land Use and Institutionalized Persons Act states that local zoning may not “substantially burden” the free exercise of religion, and left it to the courts to determine precisely what that means. This creates an opportunity for churches, mosques, synagogues, and temples to claim that providing housing is a way of practicing their faith.

https://www.planning.org/blog/9273055/small-churches-equal-big-opportunity