Dan J. Harkey

Educator & Private Money Lending Consultant

Church and Non-Profit Owners Can Now Unlock Hidden Value in California Real Estate Through Entitlement Arbitrage:

California’s evolving land use laws have created a rare window of opportunity for church and non-profit corporations. With the state now overriding local municipalities in the approval process, properties once constrained by zoning limitations can now be repositioned for high-density residential development—dramatically increasing their value.

by Dan J. Harkey

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Summary

Why This Matters to Investors • State Mandates Override Local Zoning: SB-4, SB-79, AB-2243, SB-1123, SB-9, SB-35, and related legislation now allow for increased density, reduced parking requirements, and expedited entitlement processes. • Entitlement Arbitrage: Investors can acquire underutilized properties, re-entitle them under new state guidelines, and either sell at a premium or develop for long-term cash flow. • Valuation Uplift: Properties previously valued using traditional comps can now be reassessed based on per-unit development potential, often doubling or tripling land value.

    Today, there are about 47,000 acres of potentially developable church property in California. I would not find non-profit acreage, but there are at least $373 billion of non-profit assets, with an estimated $110 billion in real estate.

    Consulting & Feasibility Services

    Dan Harkey and Pacific National Development (Al Marshall, President) offer investor-focused consulting to identify and unlock development potential.

    Services include:

    • Site feasibility analysis (unit count, building height, parking ratios)
    • Entitlement strategy and timeline
    • Development, matchmaking, or JV structuring
    • Exit strategy planning (sale vs. hold)

    Case Studies

    📍 Downtown Long Beach – Tri-Plex Redevelopment

    • Current Value: $1.7M (based on comps)
    • Lot Size: 22,500 sq ft (150’ x 150’)
    • Potential Build: 40 units + subterranean parking
    • Post-Entitlement Value: $3.2M ($80K/unit)
    • Value of land with entitlements 80 X 40= $3.300.000.

    📍 LA Metro – Church Property

    • Original Value: $1.8M (based on comps)
    • New Potential: 108 affordable units + commercial ground floor
    • SB-4 Advantage: Reduced parking due to transit proximity
    • Post-Entitlement Value: $8M ($80K/unit)
    • Value of land with entitlements 108 X 80= $8,640,000

    Investor Options

    • Acquire & Entitle: Buy undervalued properties and reposition them for resale or development.
    • Partner with Owners: Structure JV deals where owners contribute land and investors fund entitlement and construction.
    • Tax-Efficient Structures: Owners can remain in deals for depreciation and long-term capital gains benefits.

    Let’s Talk

    If you’re a property owner or investor seeking high-ROI opportunities in California’s evolving real estate landscape, let’s discuss how we can help you source, entitle, and reposition properties for maximum value.

    📞 Dan Harkey – 949-533-8315
    📧 dan@danharkey.com

          www.danharkey.com