Dear Kingdom Builders,

Residential real estate has been a wild ride the past few years. Last month, landlords offered their most aggressive July rent concessions since 2011.

However, to overcome challenging times, some landlords have found that they can command higher rents when they do something counterintuitive … give one of their units away for free.

Most owners treat challenging times the obvious way: cut the price. For example, in July, nearly 16% of U.S. apartments offered concessions, averaging more than 11% or almost six weeks of free rent.

Other owners found a different remedy. Instead of seeking to rent all of their units, they give one away to a Christian ministry. But it’s what the ministry does that brings the real value.

In our podcast interview this week, Nick Stromwall pointed me to Apartment Life, a Christian nonprofit that embeds trained coordinators inside apartment communities. They have a simple role: care for the residents.

The coordinators are active. They welcome new residents, host events, and show up when someone has a baby or loses a job. They get to know the residents and, more importantly, get the residents to know each other. They are building community.

The owner’s commitment is simply to give that coordinator a free two-bedroom apartment, an event budget, and a program fee.

It may be a good ministry, but research says it may also be very good for business.

The underlying principle is simple. People stay where they know people. And resident turnover is expensive.

The community problem is real. 53% of residents have no friends where they live. Residents with no friends only have a 29% likelihood of renewing. For those with seven or more friends nearby that jumped to 47%!

Researchers studied nearly 100,000 units to test whether residents actually pay for the community these teams create. In the peer-reviewed Journal of Housing Economics, apartments with these teams commanded rents 5.7% to 9.3% higher, and the effect proved even stronger at larger complexes.

And this isn’t limited to explicitly Christian owners. Greystar, the nation’s largest apartment manager, is among the secular operators working with Apartment Life.

The numbers suggest an intriguing flywheel. Genuine care strengthens community, stronger community benefits residents, and that benefit can also produce better business results.

Apartment Life didn't begin because someone discovered a new way to increase NOI. It began with a foundational Christian principle:

Love your neighbor.

The love experienced provides genuine value. But its value transcends economics. When Christians love one another, God’s presence and love become visible through them. “If we love one another, God abides in us, and his love is perfected in us.” (1 John 4:12).

Perhaps this is part of what Jeremiah meant prophesying in one of Israel’s most trying times:

"Seek the welfare of the city... for in its welfare you will find your welfare."

Their welfare … and perhaps yours.

Have a blessed week!

Matt

Nick Stromwall is a longtime real estate investor and former ministry leader who works with faith-driven investors in alternatives including real estate. He discusses his due diligence process, offering a few suggestions I’ve never heard before for assessing the operator.

Following her death this week at 80, this is a reflection on Dolly Parton’s Christian faith and how it shaped her family life, philanthropy, business success, and public witness. From retaining ownership of her music to building Dollywood and launching the Imagination Library, the piece argues that Parton showed it was possible to become extraordinarily wealthy while remaining rooted in faith, family, generosity, and service.

The U.S. Department of Justice’s Office of Legal Counsel issued a new opinion arguing that federal funding programs generally cannot exclude religious organizations or restrict funding simply because it may support religious activity. The guidance could push agencies to revise rules that distinguish between religious and nonreligious uses of public funds.

Effective rent is the actual economic rent a landlord receives after accounting for concessions, discounts, or free-rent periods.

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