The Mayor’s Community Discussion on Housing in Missoula

by jhwygirl

The Mayor’s Community Discussion of Housing meeting was held this past Thursday. City Council chambers were packed with a wide variety of members of the community with varying views – from Councilman Dick Haines and University curmudgeon Lee Clemensen to Andrea Davis of the Missoula Housing Authority and local developer Perry Ashby.

It would have been nice to see a County Commissioner there (I didn’t notice any of them) – but Dennis Daneke, candidate for Larry Andersons seat (appointed after Barbara Evans retired), which is up for this next election, was there. Also present was State Representative Ron Erickson, of House District 97.

For whatever reason, the Missoulian failed to cover it.

The format was pretty free-form – the Mayor first showed a 20 minute documentary outlining the issue and then introduced four people from his housing initiative panel – Chad Nicholson, a firefighter for the City of Missoula; Rachael Bemis, a mortgage loan officer with Missoula Federal Credit Union; Perry Ashby, local developer of several subdivisions and sometimes business-partner with Westmont Builders; and Nancy Harte, Missoula Office of Planning & Grants administrator for the city’s HUD funding – and then went on to hand the microphone around the standing-room only (with overflow out into the hall) for the next 2+ hours.

There were opinions and thoughts and questions from all ends of the issue. Here are a few:

Dennis Danequeth, president of the local carpenter’s union posed this question (apologies if I’ve gotten the spelling wrong): I admit don’t know much about economics. If there is so much of a demand, how come the market isn’t supplying it? We should first let the market address the issue. Perhaps there are some obstacles in the way. Perhaps we should look at the regulations and give the market a chance.

Councilman Jon Wilkins: Perhaps my biggest disappointment was to find that our program with FHA could only fund one homebuyer with the federal money we got. We can fight this fabulous war that we are fighting but we can’t fight this war at home. I think it’s important that we keep the character of the neighborhoods. I have 2 kids – one is going to be a Doctor, and he probably won’t be coming back to Missoula…the other is probably going to be a social worker and she probably won’t be able to afford a home in Missoula. I might be able to give her my home or something, I don’t know. I don’t know what we are going to do, but more help is going to be important.

Steve Loken, of Loken Builders, who has received awards for his remodels that use recycle-and-reuse methods and newer energy saving technologies: We can build affordable housing, but we can’t find affordable land. We have to pay for good help – there are a whole bunch of factors involved. The city requires all kinds of things – setbacks, roads, sewer, building code. I remodel a whole lot of homes that were built by people who lived in them. Very few of us do that today. Builders like me have to look for qualified builders. We have to pay $12 – $14 – $17 – $18 per hour and if we don’t pay them that much, they’ll go elsewhere. Builders are caught between needing qualified builders and having to pay them a living wage. Land is the problem. I have a new formula – people need to participate in the building of their home. Cooperative Housing is a tool – clustering, changing zoning for infill – we have to be dense and we have to grow vertically. We can do this with good design. Operate efficiently. Limit the amount of equity in a housing cooperative. All over the mid-west, NYC, cooperatives are becoming the way. With these kinds of projects we can have affordable housing.

Doug Grimm (apologies, again, if I’ve gotten the spelling wrong), who identified himself as having lived in Montana “practically all his life” told a story of having lived in Greenwich Village paying $200/month for rent and sharing the place with 2 other guys. He had neighbors that paid $25/month for rent and he couldn’t believe it. Doug went on to explain how NYC had enacted rent control and what a horrible mistake it was. “The market should work it out,” he said. “If I came to Missoula,” he said, “and I was looking for a place to live, my next choice would be to go to Deerlodge. Deerlodge is pretty cheap. It could be the next Missoula. If we sent enough people to Deerlodge it could be come fabulous as Deerlodge. Do you realize that you can move to Jamestown New York and buy a nice house for $18,000 -$30,000? You could also move to Erie Pennsylvania and buy a home and work at Burger King!”

Mary Monroe, a Fidelity Real Estate employee: I am the recipient of a Missoula Housing Authority home, and feel passionately about housing for moderate to low income families. As a realtor, I don’t make a lot of money because I cut a lot of my fees to help out. I wish more realtors did that. I’m a single mom with 2 kids, and without affordable housing, I wouldn’t be able to do it.

Lori Davidson, acting Director for the Missoula Housing Authority: A lot of this conversation has focused on first-time homebuyers. Affordable rentals are important also. MHA focuses on those making less than 30% of the median. That is getting harder and harder every day, with cuts coming all the time. I’m really encouraged by all the planning efforts in town – they’re long overdue. As we continue this conversation, I hope that everyone gets involved, because it is about consensus building and it is about community. I invite everyone to think about what we can do – not what we can’t do. What can we do in your neighborhoods to make density more acceptable? Is it design standards? Is it borderline areas where commercial is on one side? Instead of trying to keep things out, think about what would be acceptable.

Kimberly Chambers, a local contractor: I have to start out by saying that real estate agents aren’t really the problem. What we are faced with is that when a developer buys a piece of land they have to hold it for 24 months to go through protesting and engineering. Protesting harms it. We need to do something – we’ve got single moms, single dads, firemen – they are the starting home population. We need to educate the neighbors, but we have to care about the community and come together. We’ve spent money on open space – we need to take care of the people. She closed by urging people to talk to their neighbors.

As you can see, there was a diversity of opinions offered.

There was also some discussion on partnerships with the school district and work/study/vo-tech programs to help provide quality builders and carpenters. One man spoke of how people make homes expensive by adding top-quality appliances and such.

A whole bunch of stuff I really liked, actually – design standards? hurrah! housing cooperatives? neat idea! ensuring permanent affordability by restricting equity via housing cooperative? absolutely necessary! self-induced unaffordability via high priced additions? absolutely true – need to address basics only. No 1500 square foot granite countertopped, talking microwaved homes here, please!….Did I mention design standards?

Another fellow – Alex Taft, who lives in the University District and serves on the local Transportation Board – mentioned Location Efficient Mortgages. I know this is a method that has been successful in the Salt Lake City area, but darned if I couldn’t anything on it…I’ll have to dig further, but it’s going to require some greater work on my part for that one. In Salt Lake City, parking requirements were reduced when car ownership was limited providing that alternative transportation was nearby with some certain criteria. Permanent deed restrictions were put on the property. If I remember correctly, this resulted in some funding from the feds (TEA-21?) for funding for lower interest mortgages, along with more housing due to the amount of land freed up by removing parking.

There were handouts available. Go check them out.

A very brief synopsis of what the Mayor is working from:

Median income is $54,500. (I didn’t see it stated in there, but this would be for a household size of 4, if they are using HUD data, and it looks like they are).

There are 4 target groups –
Very Low Income – Those that make less than 30% of median ($16,350 annual), which is 6% of Missoula’s households.
Low Income – Those that make between 30-50% of median ($16,351 – $27,250), which is 13.5% of Missoula’s households.
Moderate Income – Those that make between 50-80% of median ($27,251 – $43,600), which is 16.5% of Missoula’s households.
Middle Income – Those that make 80% to the amount of income needed to purchase a home in Missoula, which is currently 125% of median ($43,600 – $68,125), which is 25% of Missoula’s households.

The goals, as stated, are:
To keep up with demand and eliminate our affordable housing backlog within ten years, Missoula is committed to providing:
– 305 additional very low income homes annually
– 121 additional low income homes annually
– 75 additional moderate income homes annually
– 16 additional middle income homes annually

I must admit there is a disconnect there for me. The film’s thrust – and those on the panel’s – was the need for housing for community members like nurses and fireman and police and clerks – and the inability of businesses to hire professionals because of the lack of market-rate housing available and the repurcussive affect it has on economic growth – yet the goals are to serve heavy on the ‘up to 80%’ end of the income levels. Even most of the household incomes on the Housing Affordability in Missoula handout were in the 80-125% range.

Given that the market – with all of the infill that has occurred over the years – hasn’t been able to do it, I would have thought that there would have been a goal of more equitably serving the middle income homes, especially considering that they make up 25% of the population.

But that’s my opinion. What’s yours?

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  1. JC

    “I would have thought that there would have been a goal of more equitably serving the middle income homes, especially considering that they make up 25% of the population.”

    Judging by your writeup (thank you very much!), I’d have to agree with you. Though I’d like to see the goal move downward a bit to catch the gap between the mids and low income level families.

    Loken sounds right on with the statement about land prices. Judging by what I’ve seen, land prices can make up 50% of the cost of a new home. And the further you get away from Missoula, the cheaper lots get–which encourages sprawl, service and traffic problems from commuters. Land coops would be a great way to go. But with affordable land to build significant coops (unless they are high density) we need to look out into the county for opportunities.

    While density needs to be factored into the equation proportionally, we have to be careful that we aren’t building the “projects” of tomorrow. I think the University needs to get into this discussion in a big way, and begin to provide more student housing. A couple of new high rise and dense developments could free up 500-1000 units in the city really quick (the property management businesses quiver).

    One problem that I see, is that for the family that hasn’t been able to afford a home (all the way up to the median income families) that as rents escalate faster than wages, those families get forced into poorer and poorer quality rentals. And as the percentage of income spent on housing increases, things like health care go by the wayside. The only real out is to leave Missoula, and either commute, or find a new home. With gas prices going crazy, commuting will cut into the savings people get by living in the Bitterroot.

    A thought to those who would look to the market to provide for what we need in the future: it is the market that got us to the point we are at right now.

    And with the national economic outlook being so volatile and fragile, what will happen in Missoula if a serious market correction (deep recession or depression) were to deflate housing values (and equity) significantly? I’m not trying to be a doomsayer or anything, but possible future scenarios are anything but a projection of market trends in Missoula over the last 10 years.

  2. You are very right about the University. They’ve got to provide housing for those students. They’ve got the free land to do it, too.

    Density alone isn’t going to solve it. I’ll have to write something on that – but, basically, Missoula is central to many amenities that people are looking for – easy access to outdoor recreational opportunities, national parks, national forests, rivers – easy access to major transportation routes, including international airports- all of those are major factors as to why we are growing.

    The rich get rich and the world economy is such that you can work out of your bedroom. Major businesses and consulting and technology jobs can be run from Missoula, with minimal flights to your city of choice. You can be a one-person show and do it from your house – might as well be a place close to those amenities listed above, no?

    So while we’ll feel the burst of the bubble, it’s not going to be as drastic as it is, say, in Atlanta. We’ll also recover faster because of those factors. Really, what I see as holding us back more than anything is our reliance on a service industry economy, instead of higher paying jobs in industry, engineering, technology, healthcare, etc. Without higher paying jobs to keep us in a sustainable economy, it’s all just going to fall flat.

    Right now, I see our biggest growth industry as growth itself. That isn’t sustainable. Somehow, we need to figure out how to redirect our economic development towards higher paying jobs.

    That’s the $64,000 answer.

    Of course, that’s only just above the median income here in Missoula, but you get the deal.

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