Save the (insert your choice here)

by Ed Childers

Affordable housing. Save the north hills. Save the south hills. Save the farmland. Protect my neighborhood. Give me a place where I can live.

There may be some mix of people that makes for a good place to live. If I knew what it was, maybe I could do something to encourage it.

I know I’ve left something or someone out. I need some answers. Tell me what to do.Here’s a hypothetical mix of incomes.

10% not working/need complete subsidy.

20% barely making it, do menial work.

30% sort of making it, have places to live because they bought 15 years ago, have sort of not too bad jobs.

20% have those great incomes, either from jobs or retirements or whatever, that allow them to buy those 200,000-500,000 dollar houses you see getting built everywhere.

10% can get whatever they need. They may not want the rest of us living near them.

10% so rich they don’t need anything.

There’s 2% more people every year. They’re born here or move here.

The population ages 2% every year.

So there’s a hypothetical money mix. Fix the mix if you want, I don’t care and for my purposes it probably doesn’t matter. The question I’m asking are, Should all these people have places to live? and, Where or what should they be?

  1. Dan

    OK Ed, since nobody else will answer I will give it a shot for you. The answer is a mixed bag. There is a role for the market place in deciding the answer. There is also a role for our community in deciding. There is also a role for our government in deciding the answer. As a city council person your part is to decide the role of our government in addressing the housing issues. How’s that for a mixed bag of answers? I dont mean to sound trite but it really is a mixed answer to a complex problem.

  2. I think what Ed was trying to get across is that Missoula is a mixed bag of people. Maybe all of them have a right to live here – rich, poor, well-off, not-so well-off.

    I would agree.

  3. JC

    Well, Dan has it partly right, asking what is the role of our governement in addressing housing issues. Of course, I want to take a step further back than that, and ask the question, why do we have a housing issue? Ed seems to be asking the question of how does a local government solve a problem, that in my mind largely is of national origins. That is, that economic forces, demographic shifts, politics, etc. are all to a degree responsible for the economic conditions we have in Missoula that have created a housing problem for certain segments of Missoula.

    In my mind, as I was reading some economic facts–50% of the population controls 97.8% of the wealth in this country (2001)–I would want to address the root of the problem, and that is one of inequity. Ed’s numbers point to the stark reality of structural poverty. Of course, then we get in the redistribution of wealth conundrum, which seems to be a taboo topic–in our current meritocracy, the rich deserve to be rich, and the poor, well, they just need to work a little harder.

    How much money can we skim off of the taxpaying public in order to subsidize housing seems to be the way we currently get around discussing the root of the problem. Or how can we encourage giving to let NGO’s assist with the problem. Maybe a combination of both, as we see in some great Missoula projects and service organizations.

    But closer to home, how does a local government address the problems deriving from our national economy? It is difficult, because even the notion of “affordable” housing in Missoula has become beyond the means of many. You can only make houses so small, packed so tight, developments so dense, before it becomes unlivable–slum like.

    I honestly don’t know the answers that may be acceptable. I can say things tongue-in-cheek like: lets have a windfall tax on Realtors and developers; a migrating to Missoula fee; rental price freezes; urban homesteading (buy a section and open it up for a nice 8/acre development, land trust style); raised minimum wages; progressive property taxes.

    Actually, if I had one idea, it would be to support expansion of projects like the ones the North Missoula Community Development Corp. are building. How can we use their model on a much larger scale in Missoula?

    Good luck Ed!

  4. Dan

    There are any number of places all around us that have a mixed bag of people living there or that want to live there. Missoula is not unique in that respect. My point is simple, combined, the market place, our government and our community hold all of the answers to the housing problem. Relying on the market place as the sole answer to the housing problem is not going to work. I agree with JC, if there is one working example that I would support it is NMCDC. I think that group deserves all of the support we can offer.

  5. You can only make houses so small, packed so tight, developments so dense, before it becomes unlivable–slum like.

    False assumption. Density does not mean decreased property value and low-income neighborhoods or even “unlivableness.” Else Manhatten would be an impoverished, deserted rubble. Problem with a lot of Missoula, IMHO, especially in neighborhoods like mine and Ed’s is that people who moved here 20 years ago thought they were in a rural suburb, and now they find themselves in a city. That’s not a problem with infrastructure, that’s a problem of perception.

  6. Ed Childers

    Dang. I had a swell reply and when I posted it poof! it disappeared. I’ll make do.
    My wife and I visited my son & his wife over Thanksgiving. They live in a 550 sq ft apartment in a 64-story complex (3 buildings) in central Los Angeles. Everything’s a 2 or 3 block walk away. The complex includes parking and a pool and tennis courts and a barbeque/picnic area and maintenance. We enjoyed our stay, and they seem to be doing OK.
    The NMCDC does great work for a small fragment of a slice of Missoula. How about expanding their land trust model so businesses/government/schools have to supply housing for their employees? Company housing, anyone?
    Speaking of subsidies and wealth redistribution, as I understand land trusts, property taxes are paid on improvements but not on the real estate, so land trust property taxpayers are subsidized by non-land-trust property taxpayers. There are subsidies everywhere. People who buy gasoline buy bike lanes for bikers. People who buy retail subsidize people who only buy on sale. People with no kids in public school subsidize people with kids in public school.
    Back to my original question, all I want is to know what kind of societal mix works well, and how to work toward that. Maybe we put all of Missoula in land trust except for the top 20%? Even if we could do it, and could identify just what kind of mix we wanted, there’d be the matter of who picks whom to be what part of the mix. Maybe that won’t work?

  7. JC

    Density by itself is not a predictor of “unlivableness.” But density for density’s sake can be a precursor to a neighborhood’s future decline. Witness the condos on Wyoming st., or Canyon Creek. While they appear to be nice, while new, what long term community-building do they offer? Similarly, while the northside of Missoula was built out on small-footprint lots long ago, eventually those homes’ neighborhoods went into decline. It wasn’t until housing became a premium, that there was interest in redeveloping the neighborhoods. But other areas of Missoula, built out on larger lots, did not undergo such a decline.

    My point still stands that density, done for density’s is not necessarily a good thing. Comparing density in Missoula to density in Manhattan is apples and oranges. That doesn’t mean I don’t believe in density–just that I think that Missoula has approved some really horrible projects in the past. Some of the PNCs we have are real atrocities. But there are good models, too, like NMCDC, that can be expanded to the greater Missoula community.

  8. Ed Childers

    Regarding marketplace/ community/ government: What’s the government’s place in the mix? Do we tell the community and/or the marketplace what to do? What if the community seems to be diametrically opposed to the marketplace (see last night’s work with a Rattlesnake subdivision proposal)? Are both important? Is one more important than the other? Is there really a difference between the marketplace and the community?

  9. Dan

    Yes, there is a difference between the market place and the community. The market place is driving the subdivision up the ‘snake just as it is driving the Teton Village subdivision. What I seem to be hearing from Orchard Homes, Miller Creek, and the ‘snake is the community is diametrically opposed to what the market place is doing. The government’s role in the mix is the toughest nut to crack, but thats why we pay city council persons the big bucks. Its a tough choice. Seriously, the role of the community is the easiest in the mix. But to me the most important role for the government is to keep an open mind, maintain an honest approach, and keep a full tool box at hand. But always remember, the well-equipped tool box always has a big hammer if it is needed.

  10. Ed’s getting “big bucks” for being on city council?

    Wait. Where do I sign up?

  11. Ed Childers

    JC, I don’t understand “density for density’s sake.” I’ve heard it said that a developer chooses higher density in order to make more money, or to have more homes on a piece of land, or better walkability, or to preserve open space, for instance, but never have heard of high density for density’s sake. Nor am I aware of low-density for the sake of low density, for that matter.
    A forinstance: back when shank’s mare was the primary form of transport, low density meant long walks, so higher density made life easier than low density.
    Did the north side decline because of small lots? Or because that part of town got old, and people who could afford to do so went for the new stuff on bigger lots which was largely made workable by cars? Or possibly some other reason? Also, is the University area, which has not undergone a decline (monetarily, at least), built on larger lots than the north side?
    Regarding PNC’s, are you sure the examples you’re thinking of are PNC’s? We studied that and found that people generally did not know.

  12. Ed Childers

    Hi, Dan. I was thinking maybe the community participated in, or maybe even comprised, the marketplace. People come, people go. People have kids who eventually want to live somewhere. People move to bigger or smaller or more convenient or less convenient homes, for instance. My sense of the community was that included all the people who live, work, shop, go to school, etc. in Missoula, and also included businesses and schools and such. There are many subsets of that larger community. And I thought of the marketplace as the activity that takes place between and among members of the community.
    Not what you’re thinking of, I gather.
    Perhaps what you’re referring to as the “community” may be what I’m used to hearing called the “neighborhood” or the “neighbors.” The marketplace,: then, might be all those forces outside the community (neighborhood). They would include anyone who might want to move into the community, and of course all the carpenters and electricians and plumbers and realtors and contractors and roofers and bankers and such who’d be needed to make that move possible. The marketplace would be anyone who owned land in the community who was interested in selling their property, expanding their home, that kind of thing. Thus the “community” opposes the “marketplace.” I think I see.
    If I’ve misunderstood you, and that sort of thing happens often, I’m sure I’ll soon find out. :)

  13. Ed Childers

    jhwygirl: yep, it’s big bucks. And the health insurance is paid for.
    Thanks. :)

    Thanks for the conversation, folks.

  14. Dan

    No Ed. thank you. Serving on the city council is a thankless job. When people tell me they are going to run for a council seat the first question I always ask is why would anyone want that misery. I often poke fun at you and your compadres on the council but the reality is you stand up and make a difference. This discussion about housing is necessary and even though its been going on for a number of years, the topic is not going to go away any time soon. Again, thanks

  15. Hm. I think it’s a little…naive?…to think of the marketplace as a simple exchange of needs, goods, and services within a community, especially when it comes to new housing.

    Put it this way: depending on the type of product a developer creates brings in a particular buyer. McMansions draw a different kind of customer than an apartment building, for example. That is, the choices that a developer makes often conflict with what the residents in the neighborhood would like to see, and might draw new residents that differ economically — and perhaps socially — from existing residents.

    That’s what KC is likely getting at by a conflict between market and community. After all, the existing residents aren’t participating in the marketplace at that time and place.

    So the real question about government’s role is, IMHO, how can the city mediate between existing neighborhoods and new development? For one, IMHO, a clear long-term growth plan is essential, esp. with CLEAR regulations regarding new development and infill, a plan that preserves the essential “feel” of Missoula (read: infrastructure), anticipates oil and gas shortages, and includes lots and lots of new houses.

  16. No one has enough information to create an accurate long-term growth plan. The models the planners use end up simplifying too much and working from faulty premises. Nothing will paper over the fact that people on Duncan Drive don’t want Sonata or the people at Mulaney Ranch don’t want Teton Addn. The conflict will always be there.

    And I’m wondering, were there any questions raised about affordability in either of those two subdivisions? Or is the City too desperate for bldg permit and mitigation fees to pose the question?

  17. JC

    Ed, when I say “density for density’s sake” I’m referring to the implied notion in the valley that sprawl is to be avoided, and infill encouraged. And the more dense the infill, the less sprawl we have. So it seems that over the years, the city has encouraged density in many ways, density bonuses, PNCs, zoning changes, etc. It has as much to do with how density is encouraged and accomplished, as it has to do with just rubber stamping a developer’s proposal because he jumped through the hoops.

    We all know that a developer’s main goal is to maximize profit. And there are many ways to do that. But offering affordable housing in a marketplace (the local one by your definition) like Missoula’s is not going to happen unless there is incentive to do so. And when I say affordable housing, I don’t mean Cooper Creek style housing, or apartment buildings.

    What Missoula lacks, are affordable neighborhoods being built that cater to the families working within the “living wage” definition–unless home ownership is no longer something our community desires for working families.

    So, to rephrase your original question, I’d ask the question: “given that those who can afford to purchase a home have either done so where they want to, or have forgone the opportunity for whatever reason, how do we lower the barrier to home ownership to those working families that have been priced out of the market due to no actions of their own?”

    In otherwords, the local marketplace is to a large degree influenced by economic changes, public policy, and corporate practices outside of the community — influences that it has no control over. A desirable place to live like Missoula then needs a strong local government that can see these things, and do what it can to protect its more vulnerable populations. Otherwise, we continually marginalize a large percentage of our population, as they become fodder for the larger marketplace.

    Think of it this way: a bank turns down a family–trying to buy a house they’ve been living in, but renting–for a loan, saying they don’t have the income to qualify. Someone else buy the house, and then raises the rent to cover the now higher mortgage payment (and taxes). The family then has to decide to pay the rent–which it maybe can do if it suffers the consequences of ignoring other needs like health insurance or heath care, or buying a car that gets better gas mileage and doesn’t pollute as much–or move. And moving in Missoula to try and find affordable and livable rentals is becoming more and more difficult, nie impossible. So the family ends up staying in the home, and pays the mortgage, through their rent payments, for the new owner. Every time a house is flipped in Missoula, the situation gets a little bit worse for the local marketplace, as a whole. Collectively, the churn in the housing market in Missoula over the last 10-15 years has done nothing but nearly triple rental prices.

    This is a lot of what I see as the “New Missoula.” Our community seems to accept that it is OK for so many working families to pay exhorbitant rent to cover the mortgages for houses that a banker wouldn’t let them buy. Oh, so now you’re getting even poorer: here are some social services you can apply for, or nonprofits will give you.

    So Ed, the goal is to close the gap between the price of an entry level home, and the “living wage” that Missoula is so fond of proclaiming that we have. Work to increase the percentage of home ownership of Missoula’s working poor. With home ownership we build neighborhoods. And by building neighborhoods, we build community. Continue to allow a segment of our populace to increasingly be priced out of home ownership, and we diminish the quality of our community.

  18. Now I’m no market maven, but I think the answer to affordable housing is more houses. What we should be working towards is encouraging development, but in a way that’s congruous with the city’s vision of itself.

  19. JC

    Jay, who’s going to build them? And who is going to build houses that “living wage” Missoulians can buy? That’s one of the questions that Ed needs answered.

    We sure aren’t going to do it with the current stock of available housing. It would take a major recession in the Missoula housing market, and/or a $5/hr raise in the livable wages notion to get the working poor into home ownership.

    As I see it, the problem’s going to get a lot worse before it will get better, as there isn’t anything in place to change the growing percentage of Missoulians that are getting priced out of the housing market.

  20. Build more houses and the prices come down.

    I remember the latest theory going around in SF affordability circles was the best way to make affordable housing was to build luxury housing. That way, folks with more money would be driving up the prices on the upper end of the market, instead of driving up the prices on the “mid-level” market, which then has repurcussions all the way to the bottom of the market.

    That is, if the folks with money to burn don’t have a place to buy, they’ll buy from the next level down, and they’ll outbid the midlevel buyer, and midsize housing prices rise…the midlevel buyer grabs up the low-level housing, and the low-level buyer’s pushed into renting. And the renter…well, the renter moves to the cheap apartment complex thrown up 2 miles out of town.

    To solve the problem then, we need enough different housing types to solve all of the buyers’ markets. Build more houses with infrastructure — parks, transportation, walking and biking paths, schools — and the prices will come down…or something…

  21. JC

    So this theory of yours Jay says that to provide housing for lower income families, we don’t build housing for them. We build housing for the higher ends, which keeps those buyers out of the low end. Then the lower end homes drop in price to make them more affordable.

    This might work in San Francisco, but can it work in Missoula?

    Who gets hurt when lower end housing prices deflate? People who bought in with marginal loans? Can this sort of tactic precipitate foreclosure?

    It’s the “or something” that scares me. Maybe we should encourage a nice big gated community on some Plum Creek land and only allow rich Missoula residents to buy homes there and see if it works. And then if it does, throw away the key. ;-)

    Tom Power had a similar argument in the Missoulian in Sept. Then the question becomes how much of what kind of housing has to be built in Missoula in order to bridge the gap between affordable housing and the (not quite a) living wage. And who’s going to put up the investment to do it.

  22. I’m not sure that building more homes is going to bring the cost down. In normal places – i.e., not the hot inter-mountain west – it would (simple supply/demand), but taking Missoula, as an example, for the past several years they can’t seem to build them fast enough.

    That being said – we are seeing a slowing of the market. Not as great as other places (see the hot inter-mountain west statement), but still a tempering of prices. Already you can find condos that sold last year at $150,00 range going at $125,000.

    If enough people want to come and buy – many that aren’t even here – no matter how much you put on the market, the prices aren’t going to temper down.

    PNC’s – Pleasantview – those high density homes out by the airport – all those sold faster than they could finish them – prices weren’t affordable – in the HUD ‘affordable’ definition, affordable to median income buyers sense.

    Building homes in a variety of sizes would be the best -so that there is a variety of product on the market – not just the everything starting at 3 bedroom, 2 1/2 bath 1800 sq/ft size. Without variety in size, there is not variety in price.

    And on the “not quite a living wage” thing? It ain’t a living wage because the cost to live here, i.e., housing, is so darn high. Either the cost of housing has to come down or wages have to go up.

    Housing is going up at a much higher rate than wages…and with Missoula’s seeming move to service industry employment (see MAEDC supporting Direct TV and the Bitterroot Resort and the PAC – all big high-salary money makers and money-draws, right? – a whole bunch of tourists coming in to ski and see shows), I don’t see wages going up.

  23. Ed Childers

    Many thoughtful comments and suggestions.

    * McMansions draw different people than apartments. Sure, that seems reasonable; however, the same people who want McMansions now may want apartments somewhere down the road.
    * Build more McMansions (or other high end) (Are McMansions high end?) and low end prices will stay low. That’s a fun and innovative concept, but probably not practical.
    * Developers’ choices conflict with the neighborhood an awful lot of the time. It doesn’t seem to matter that they follow the rules (“jump through the hoops,” see later); people get used to what’s there and they don’t want it to change. I got used to being 20. Now I’m 60. Dang.
    * I guess I don’t generally see the City’s role to be mediation between existing neighborhoods and new development. City government’s more of a creator, maintainer, and enforcer of zoning and subdivision rules that are known (or knowable) to all parties involved. Now, if they were just all clear and easy to interpret…
    * Regarding our 2 most recent projects: the Miller Creek one is a mix of larger-lots, smaller-lots, multidwelling, with a bit of commercial thrown in for good measure. The Rattlesnake one is single-family.
    * Here’s a comment that I found very interesting: the feel of Missoula comes from infrastructure. I don’t know if that covers all of it, but infrastructure must play a part.
    * Regarding the city being “desperate for fees:” close enough, I guess. Over the years there’s been cost-shifting from the feds to state/local, from the state to local. Locally we’re moving toward more user fees, at least in part to make up for shortfalls in other revenue sources. Those fees cover part of the cost of providing service, in the case of user fees; or in the case of impact fees, they partly cover the cost of new infrastructure to serve new homes and businesses. The rest of the cost is covered by the rest of us.
    * There are those who believe the city should provide less services. There are those who believe the city should provide the same services and such using less money. There are those who believe the city should provide more services. Personally, I think a gallon of gasoline should cost 17 cents and tuition at UM should cost $120 per quarter.
    * There was a comment that nobody should “just rubber stamp a developer’s proposal because he jumped through the hoops:” as I understand it, the hoops have been put in place by the entities that regulate the jumpers, so the regulators and the jumpers (and the audience!) know what to do to achieve a predictable outcome. If we want a different outcome, we should redesign the hoops; we shouldn’t put a pool of flaming oil at the end of the course. (Note: redesigning the hoops may result in a pool of flaming oil for the regulators. See Density Bonus and PNC.)
    * Here are two sides of a home value issue: there was a comment that housing changing hands causes higher prices, and also a comment that efforts to keep prices from going up reduce value for home owners. Pick one or the other?
    * Building more houses may keep price down compared to not building more houses. However, materials costs continue to spiral upward, not just for walls and ceilings but for sewer and streets and sidewalks; and part of that cost increase comes from competition for cement and lumber and such, which comes at least in part from building more houses.

  24. You may find in the near future that materials costs start coming down. They already are in other parts of the country. Not that you can hang a plan on that or anything, but it’s something to look out for. I would like to know what it costs to build here per sq ft.

  25. JC

    You may find in the near future that materials costs start coming down.

    And developer/contractor profits will begin to rise as housing prices won’t be affected due to high demand.

    Or so it seems. Anybody tracking new housing prices as materials prices fall?

  26. I’ve read reports from other parts of the country where it was down to 70/sf. But just try to ask a builder here for a ballpark number like that and they’ll give you the big runaround.

  27. Prices are going to be driven by supply and demand. Lots of demand? High prices.

    I don’t see demand going down that much.

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