by jhwygirl

In what is either another misguided attempt or act of malfeasance in search of affordable housing, Missoula City Council approved Accessory Dwelling Units (ADU’s) for all residential zones.

I’ve written once about this ADU proposal. My main objection is the negative impact it is going to have on affordable housing. Other issues are just as valid, such as the higher taxes it will bring. Enforcement is a huge issue for many, the city notorious for not wanting to enforce stuff (like fireworks?) Council also didn’t provide much for convincing answers to how they could enforce the “owner occupied” portion of the law – especially when questioned about previous legal opinions to the contrary.

So I see this story in the Missoulian from city government reporter Keila Szpaller and I just shake my head. There is a picture of an advocate for ADU’s – Ms. Brown is quoted as saying “ADUs are not the end of the world. They are not the end of Missoula as we know it. They are another affordable housing option, and as an older individual, I’m looking for those.”

BUT – read the caption under the photo which accompanies the article, and the advocate for affordable housing says she wants to build a cottage to rent out the main house.

I ask you: How is that creating affordable housing? Ms. Brown, who owns a house, is going to build a guest cottage to live in and then she’s going to rent out her university district home. Now – I’m sure this has already been all worked out, but let me explain how this is going to work because now we’ve been given such a clear example.

Occupant of said house – who is likely having trouble keeping up with property taxes, in addition to having a need to downsize – is going to go to the bank and present the finance officer with a plan for how much they are going to rent the main house. Estimating taxes, costs and revenues, they’ll then offer their home as collateral.

Bam! Property values have increased for that lot because of the improvements. So the neighbors next door with a family and two working incomes who were able to afford their 3 bedroom home are now faced with a tidy uptick in their property values. And the cycle goes on.

The comments on Ms. Szpaller’s story don’t miss that, either.

A motion was made to have the ADU proposal go to the voters, but that was struck down. No surprise there – the city had previously taken a city-wide survey to prove how everyone like the idea and the results were that a majority was not in support of the proposal.

In the end, Councilors Jason Wiener, Alex Taft, Cynthia Wolken, Bob Jaffe, Ed Childers, Mike O’Herron, and Marilyn Marler voted for the ADU’s – and Jon Wilkins, Adam Hertz, Caitlin Copple, Dave Strohmaier and Dick Haines voting no.

So THANK YOU Jon, Adam, Caitlin, Dave and Dick for voting no.

The city’s going to get sued. They pretty much know that. The truth is, they don’t really care. The city has insurance coverage for this type of thing, so their cost is minimal as opposed to the organizing of funds that the opponents are going to have to do to hire an attorney.

Sad. It’s really a nasty thing when government – whether it be town, city, county, state or federal – takes the position that “you can’t sue city hall.” They have their staff and insurance pool of attorneys – any individual or group has to then step up and get the job done. I believe that is the case here, illustrated by the city’s previous survey, and Monday’s night failed vote to take it to the voters.

In this case, I have no doubt. Myra Shults has been out in front of this for a while. I may be wrong, but I believe she used to be a Montana Association of Counties (MACo) staff attorney for land use issues. Ms Shults was also up front and center with the gravel pit issue down near Lolo back several years ago.

Ms Shults was successful in that the gravel pit was halted – and without her involvement, I don’t know that it would have happened.

I may even donate some popcorn money to the cause.


  1. lizard19

    j-girl, maybe I wasn’t paying close enough attention, but were there others making this argument?

    the opposition to ADU’s, at least to me, seemed more focused on dumping on renters—the type of people they are—instead of the real estate/property value angle.

    • The first 18 comments to the Missoulian seem to indicate as much.

      Professional certified appraisers have told me the same.

      jhwygirl

      • lizard19

        interesting comments. I’ll risk exposing more of my ignorance on this issue by asking another question: how can taxable value go up while property value goes down?

        • Why do you think taxable values are going to go down?

          I mean, I realize I’m anon – you don’t believe I’ve spoken with numerous appraisers & DOR appraisers? Because that’s professional expertise at property values – without any profit to influence their opinions (unlike realtors & developers.)

          Under your premise that values will go down you are essentially saying the city acting detrimental to ALL property owners interests.

          Do you really think city council did that?

          jhwygirl

          • lizard19

            I don’t understand, which is why I am asking. this is from one of the comments at the Missoulian:

            Interesting to me (a liberal) that the majority of the current council does not realize that ADUs will end up hurting the community by increasing taxes, decreasing property values, increasing street congestion (which may increase traffic accidents and fatalities), and putting further strain on community services such as police, fire, hospitals, sewer, and public schools.

            how can taxes increase and property value decrease? again, I don’t have as good a grasp on this issue, so I’m honestly just asking because I don’t get it.

            • Did you read all the comments or just the one on top?

              Because I see several in there referring to higher taxes & higher property values.

              Call DOR. Ask questions. They’re absolutely unbiased in explaining how taxes & property are calculated.

              If the economy was as simplistic as “supply & demand” Missoula would be wildly inexpensive right now. Even through this 5 year housing slump, median home values have increased.

              15 years of the city increasing densities. Had it gotten cheaper? Have housing prices & rental prices stagnated?

              Bozeman has inclusionary housing requirements – ie, certain developments MUST provide below-market housing. They’ve had it for nearly (if not more) than a decade.

              Missoula hasn’t done squat but keep developers & realtors rolling in cash.

              jhwygirl

              • lizard19

                inclusionary housing sounds like a very good idea. a very good progressive idea.

    • Caitlin Copple voted no because she did not believe this would create “affordable” housing. I’d suggest that’s the same.

      I also know appraisers here in Missoula with the DOR.

      The council only wanted to hear from realtors & developers. What does that tell you?

      jhwygirl

  2. Chuck

    J-grrl gets it.
    Please go back and read her other post she linked.
    It’s not just ADU’s. Your town is in serious trouble. Barkey sees it. Grunke sees it, Royce sees it, even Engen does but it might be too late. Everybody’s bailing, even the guys that took the tax money.

    • lizard19

      yes, serious trouble. encouraging economic growth looks great on paper, but when that growth comes with urban problems, people get very upset. if Missoula continues to grow, more people will probably be living closer together, and more will be impoverished as wages stagnate against the steadily increasing cost of living.

      what continues to frustrate me is this: the idyllic Missoula folks appear to be mourning just doesn’t exist anymore, if it ever did. this city has significant problems, and affordable housing is one of them.

      I guess those who were concerned about gentrification ten years ago didn’t connect the real-estate/bank/property-tax dots being described by jhwygirls writing on this issue, and if ADU’s do absolutely nothing to stem the housing problem we have, which it sounds like they probably won’t, then I imagine there will be regret among supporters of affordable housing for not being more critical/vocal during this process.

  3. Dave Budge

    Regardless of the fact that I’m generally in favor of this (my problem with it is that it’s, in fact, too restrictive – but we’ll leave that to the side.) Let’s test some consequences here with some econ thought experiments:

    1 – individual property taxes

    Property taxes are assessed on two levels: the land and the “improvements” based on some formula that roughly tracks market values. With this ordinance, then, what has happened is a significant increase in the supply of build-able land. All things being equal, land values should reduce (or increase less fast) especially in locals where there is the highest premium on land – such as the University district.

    This, of course, doesn’t preclude the chance that property taxes won’t go up because A) assessment formulas are poorly constructed and B) application of assessment formulas sometimes appears to be God’s own mystery.

    Affordability

    Depending on location, land is a major component in housing affordability. With the increase supply this, all things being equal, should reduce the marginal cost of a square foot of housing in the areas with the highest land premium. (What is the definition of “affordable” anyhow?)

    Congestion

    The fact remains that the vast majority of homeowners do not want to be landlords. Over time this may change but but let’s think about the behavior economics of this bit from the Missoulian.

    New interior units that add square footage to the home and new detached units require “conditional use” approval by the council after notice to neighbors and a public hearing. A conditional use permit runs $1,664 plus mailing costs for notifications.

    This particular road is a long way from Liberatopia. In either case public opinion will have some level of working as a growth regulator. I would be surprised to see any significant boom in this activity especially if the neighbors have a soft veto.

    Obviously the economics of all of this cannot be predicted since other factors such as population growth, income levels and the omnipresent and increasing building code regime will have as much to do with the price and tax levels as anything.

    So, in the end, I kind of think that there’s an undue level of hand wringing on the topic. But then again, I love high density neighborhoods for both their economics and their social constructs having lived in them. In other words, my opinion is highly biased.

    • lizard19

      HUD defines affordable housing as 30% or less of what you make.

      • The median household income in Missoula being 43K in the county, 45K in the city.

        The whole housing boom and subsequent implosion clearly demonstrated simple rules of supply and demand weren’t in play.

        I don’t know – maybe, all of a sudden that’ll happen.

        We’re all entitled to our opinions, that’s for sure.

        Let me add – I want to be wrong.




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