In the LDS Church, who decides where to place new Churches, and how?
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From page 6 of the Facilities Management Guidelines:
Factors that affect planning future meetinghouse needs include (1) the characteristics of typical Church units in the area, (2) past growth rate and patterns, (3) projected growth, (4) planned unit divisions, and (5) the size, location, and extent of existing building use
Matt is also right; on page 1, it says:
Planning New Facilities
Area administration office staff maintain plans for meetinghouse needs in all stakes. The stake president is asked to update the information for his stake in those plans regularly. For matters pertaining to new meetinghouse space, the stake presidency consults with the administration office.
Meetinghouses used to be funded by individual units, but are now paid for by tithing. Sacrament meeting attendance has been used to measure the need for a building in some wards I've lived in.
For instance, the Chinese branch in Manhattan met in a one room office until they had enough people attend that they became a ward and got their own chapel. However, because it was just one small ward, the church was one floor of a building. Meanwhile, Harlem had several wards, and their growth caused the LDS church to build a new meetinghouse there (all this was from 2003-2005 or so).
Likewise, temples are built according to the number of nearby active members (paying tithing, attending church) and demand on other nearby temples.
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Source: stackoverflow.com
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