Housing in Missoula, MT: Who is it For?
Recently, Missoula City Council was handed a heavy stack of housing policy recommendations to review, with the goal to move forward with developing a robust housing policy for our city. They are expected to vote to approve these recommendations and begin working to implement them June 24th. I’m writing because the policy recommendations are skewed heavily in the direction of developer incentives that have proven largely ineffective in other Montana communities, and require years to evaluate. These types of incentives failed when Bozeman and Whitefish tried them. We don’t have the luxury of time to wait and see if the incentives work and then change course before this crisis will overwhelm our community. The problem in Missoula is more urgent than most people realize. A University of Montana Bureau of Business and Economic Research study from 2018 reported that when median wages are compared to median home prices, Missoula housing is already less affordable than Denver, Seattle, Portland and Miami. I believe that now is our last chance to add some important regulatory pieces to the policy recommendations.
I am hoping our City Council will act courageously to enact policies that will stop the displacement of working people, and the worsening cost-of-living stresses that are making wage-earning Missoulians question whether they’re welcome here anymore. I believe there would be a measurable impact on housing attainability for working people if the City and the Missoula Redevelopment Agency were to enact 1) a mandatory inclusionary zoning policy and 2) a policy that requires Tax Increment Finance Districts to set aside a certain percentage of their funds for development of permanently affordable housing.
Mandatory inclusionary zoning is a policy that municipalities can develop that requires projects over a certain size to include some affordable homes. The policy can relate to both rentals and home ownership units. Imagine what our stock of attainable housing would look like right now if inclusionary zoning had been in place before the Sawmill District and Roam Apartments started development: If we had just a 10 percent affordability requirement— the affordability levels of which could be decided upon by our City staff based on data we already have — about 120 affordable units could be added to the rental and homeownership stock. Our City could decide what the parameters are. The reality today is that market rate developers came into town to develop the Roam Apartments, received Tax Increment Financing with no affordability strings attached, and the building now sits downtown with only 69 percentof units rented (according to the whiteboard in their lobby). Under inclusionary zoning, if developers choose not to develop affordable units, they pay a fee that goes into a housing trust fund that can be used to develop attainable housing somewhere else in the city.
My opinions on this subject are informed by my work as a member of the Housing Steering Committee and as the director of Trust Montana and part-time employee of the North-Missoula CDC. The latter organizations both maintain permanently affordable housing with the Community Land Trust model. CLTs are effective at providing workforce home ownership opportunity in Missoula: if you see a home in Missoula selling for less than $180,000 in 2019, the chances are extremely high that it is one of the homes North-Missoula CDC developed and maintains as affordable. Trust Montana is now tasked with taking that success statewide.
One of the most compelling reasons inclusionary zoning is necessary at this point is that Missoula renters and potential buyers are not just competing with other local wage-earners for housing. Our home prices are based on what people from out of state can afford. As one Whitefish City Councilperson stated about their decision to enact mandatory inclusionary zoning two weeks ago: “The business model of land developers does not cater to the local workforce. The market has created this issue and it’s time to regulate it.”
There is a misconception that placing requirements on developers would only be useful in the case of subdivisions. I believe our City Council should feel empowered to create a community-driven policy that does not rely on sprawl, but instead can focus inward and upward.
I was one of about two people on the Steering Committee that does not (read: cannot afford to) own a home in my town — and I have two good jobs. Anecdotally, I’m aware that there are stacks of pre-qualification letters at our local banks for families that can afford a home for $190,000 to $250,000, and there are no homes for them to buy. Those people are stuck in rentals and are unable to build equity. Those of us who are trapped in the rental market contribute to low rental vacancy rates, which means landlords can keep raising rents.
I have immense respect for the City staff that navigated this housing policy process. They have been trying to balance everyone’s needs while finding ways to make sure more affordable housing is developed in this rapidly-growing city. I appreciate that they listened to many of my concerns and ideas while I served on the Steering Committee and added provisions for supporting CLT development.
My hope for City Council is that they will do their own research, take a hard look at Whitefish and Bozeman, and end up with the conclusion that we must enact mandatory inclusionary zoning. If we don’t act now, I believe our incentive-based programs will under-perform to a point where we are forced to enact a mandatory policy in a few years. By then the development boom may have passed us by, and with no requirements on developers to ensure equitable development, our city will be owned by the people from out of state who can afford the property here.
I understand the concern that requiring developers to include affordable units might raise the prices of other housing — but honestly, we’re already at a point where Missoulians are priced out. I don’t accept the idea that market rate prices rising is an unavoidable consequence of an inclusionary zoning program — we have strong minds at the City level that are capable of the math problems involved in creating good policy. Fear of unintended consequences is fair, but there are also consequences to not acting immediately to do everything we can to fix this crisis. I’d rather see us try to make a regulatory change that benefits working Missoulians, and then have to readjust it, than give up before we start. We are already at the point where our homes are not affordable for people who earn Missoula wages. So what do we care if prices rise on the properties Seattle residents are purchasing here and farming out as Airbnbs? Seattle workers earn good wages and can afford the price increase.
Our City Council representatives can take a serious look at enacting mandatory inclusionary zoning and an MRA set-aside for workforce housing — before the vote on June 24th.
