Realtors' Report Tackles Missoula Housing Affordability
Missoula Realtors released a report Tuesday with recommendations on how to make housing more affordable. Among them: Streamlining regulations on housing development, creating incentives for building less expensive homes and encouraging more local government collaboration on housing and land use policies.
Andrea Davis appreciated the contents of the 150-page "Making Missoula Home" report. Davis, the executive director of the nonprofit housing organization Homeword, says affordable housing is an important statewide economic development issue.
"While government doesn't need to do it all, government needs to play a key role," she says. "They play that role either through regulatory efforts or relaxing regulatory efforts, but also providing, often, the investment that's necessary to trigger private investments. So, government has a very critical role in housing policy."
Eran Pehan is director of the City of Missoula's Office of Housing and Community Development.
"Inherent in any community approach needs to be a very large, broad-based public education campaign," Pehan says. "People who are trying to enter the homebuyer market for the first time have a very keen sense of the affordability issue in Missoula. I think people who have been homeowners for decades struggle to understand what it's like for people, because they purchased their home at a really reasonable price. So, I think we need to get everybody on the same page."
The Missoula Organization of Realtors hired development consultant Dan Werwath last year to analyze Missoula's housing market for the report released Tuesday.
"The supply of housing serving about half the working people in your community is gone," Werwath said. "Folks below the median income are pretty much getting priced out. A lot of people think affordable housing, like the very lowest income people. We're talking entry-level professionals here. We're talking a family of three, earning $70,000 a year, not being able to buy a house."
According to Werwath, the lack of affordable housing threatens Missoula's very identity. He thinks the Garden City now stands at a crucial crossroads.
"This is really a threshold moment to think about how do we make sure that you don't diverge into the resort community direction, and really make this a place where working folks can continue to live and enjoy a high quality of life," he says.
The "Making Missoula Home" report is jam-packed with facts and figures. Here are few to chew on: The City of Missoula's population grew by almost 6 percent between 2010 and 2015; that's greater than the rate for the nation as a whole. While the labor force has grown and unemployment is low, half the city's households are considered low income by federal standards.
Sales of detached homes below $200,000 plummeted by 46 percent in the last two years. Conversely, higher-end housing priced above $300,000 is growing rapidly, replacing more affordably priced options.
"The median sales price at the end of 2017 is just shy of $270,000," says Werwath. "That's the equivalent of needing about a $70,000-a-year income to be able to buy that house."
Rentals are another challenge. University students tend to snap up lots of local rental stock.
"Students can band together to rent a three or four-bedroom house, and they quickly outpace the buying power of a one-income family or a two-income family," Werwath says.
Rental housing vacancy rates remain low at roughly 3 percent. A 5 percent vacancy rate is standard for a stable market.
The "Making Missoula Home" report was produced in conjunction with a local advisory group that included representatives of the business community, bankers, local planners and engineers.