Panelists: Housing crisis is holding back economic growth in Montana
Montana’s lack of housing stifles economic development because potential employees can’t find housing, so even companies that offer high salaries and want to expand can’t grow.
That’s according to a few panelists who presented last week as part of a housing affordability panel before the Montana Legislature Local Government Committee.
“This has been a growing problem for years and decades in the state, and it’s clearly overflowing at this point,” said Andrea Davis, executive director of Homeword, which creates and preserves homes in the state and teaches the homebuyer education.
Davis, one of the panelists, gave an example she had just encountered at a meeting in Kalispell. She said Applied Industrial Technologies, a major employer in Flathead, could hire 200 workers tomorrow with salaries of $60,000 to $130,000, but there is no housing to move into.
At the meeting, the three presenters, Davis from Missoula, David Fine from Bozeman and Jesse Jaeger from Missoula, offered perspectives on the housing market from their different perspectives. They also shared possible solutions for lawmakers to consider entering the 2023 legislative session.
“We need to stop Bozeman and Montana from just becoming a playground for the rich,” Fine said.
In Bozeman, the median selling price of a single-family home is rapidly approaching $1 million. Fine, program manager for six of Bozeman’s urban renewal districts, said the median cost of a single-family residence is $812,000, up $112,000 from October 2021, and that police, firefighters, construction workers and nurses can no longer afford to live in the city.
He also said companies cannot attract and retain talent. Six years ago, a family of four earning $80,000, or 117% of the area’s median income, could afford a single-family home in Bozeman, he said; in 2021, the same family is expected to earn $162,000, or 219% of the region’s median income, or the equivalent of three salaries of $55,000 each.
“A housing market that is growing this fast is simply unsustainable,” Fine said.
The city has used the tools at its disposal, he said, namely tax-raised funding and, previously, inclusive zoning, the latter of which typically allows local governments to require projects to provide affordable housing. As part of inclusive zoning, Fine said 19 affordable homes had been built in Bozeman and occupied by local families, but House Bill 259, a bill passed by the legislature and signed by the governor in 2021, did derail an additional 60 units.
“As a result, Bozeman residents lost the opportunity to move into one of these 60 affordable units because the primary tool we had was taken out of our toolbox,” Fine said.
In public comments, however, Abigail St. Lawrence of the Montana Building Industry Association said those 60 units were actually stuck in the approval process at Bozeman. She also said inclusionary zoning has been shown time and time again to force the burden of a society-wide problem onto an industry, but developers cannot solve the housing crisis alone.
St. Lawrence said developers want to build at all income levels, but citing a story in the Bozeman Chronicle, she noted that some longtime residents who talk the most about housing issues also “bristle” when building. new developments. She said Montana’s population has jumped 10% over the past decade and housing has increased 7%, so the scarcity shouldn’t come as a surprise.
“We basically have a supply problem in this state,” St. Lawrence said.
Jaeger, of the Poverello Center shelter in Missoula, said 558 people and families are living without a home in Missoula. In fact, he said the number of people at Pov who are going homeless for the first time is at an all-time high. (Pov could not be reached by voicemail from its manager on Friday for trend data.)
“These individuals come to us and are really scared,” Jaeger said.
He also said that people who stay at Pov work, contrary to a common misconception. In fact, he said 40% of shelter clients had an income but still couldn’t find housing due to high costs. Additionally, he said housing vouchers do not track rental costs.
“There just aren’t enough shelters for everyone who doesn’t have a home,” Jaeger said.
Panelists also talked about solutions. In Bozeman, Fine said the city is considering streamlining reviews of low-cost and mid-priced home projects, and he said the state should allow combined planning and zoning hearings to cut costs by winning time.
“That would cut approval times by weeks,” Fine said.
Davis, with Homeword, said resources that leverage other public and private funds are helpful. In 2019 she said a bill which loaned $15 million from the Housing Coal Trust Fund was spent almost immediately and raised another $18 million for seven projects in Montana, and she hopes it can be renewed.
Davis also said a labor housing tax credits bill that the Montana Legislature passed in the last session, Bill 397, was opposed. by Governor Greg Gianforte because he was tied to a federal allowance. She thinks the bill can be easily fixed for a pilot program in the future.
Jaeger, along with the Poverello Center, suggested an extension of Montana’s Medicaid waiver to allow places like Pov to recoup housing service costs. He also said people who were incarcerated and in need of housing would benefit from housing risk pools so they were not “permanently punished” for accessing housing.