Montana Public Radio

Tough Housing Markets Could Worsen As Montana’s Jobs Recovery Slows

Nov 10, 2020

Amid job losses that haven’t fully recovered this year because of the pandemic recession, competition in many of Montana’s housing markets is also on the rise. That means many Montanans are struggling to find and keep housing.

Kathy Orr of Bozeman and her family planned to move at what turned out to be the worst possible time — right as the COVID-19 pandemic hit. But after the deal fell through they spent four months in a hotel while they looked for an alternative.

She says one of the hardest parts was missing out on home-cooked meals.

"My kids complain because they want mom's cooking."

Both she and her husband lost their jobs during the pandemic. Kathy developed a cough early on when testing was limited, and she quarantined to be safe. By the time she was ready to return to her job as general manager of a restaurant, they’d hired someone else.

Kathy had to pivot to administrative work, where she only gets part-time hours and makes significantly less money. She’s also still waiting to hear if she’ll receive unemployment insurance from the state.

"I don't even qualify for food stamps or health insurance or anything. I don’t know. I feel like I fell through the cracks somewhere."

The hardest part, though, was finding a new place to live. They paid expensive application fees, competed with college students living out of dorms during the pandemic and watched the money they’d saved for a deposit disappear the longer they stayed at the hotel.

"I was very honest with the property manager, and I'm like, look, my family's been living in a hotel for three and a half months. And it has ate up all of my money. And I would really like to get into a house again."

The unemployment rate in Montana is 5.3 percent, which is better than the national rate, but still nearly two points up from where it was pre-pandemic. According to data from the state department of labor, there were 16,000 fewer workers on nonfarm payrolls this September compared to last September.

Employment in Montana surged back in early summer after bottoming out in April, but the jobs recovery has slowed down in recent months.

Parts of the state were facing a problem with housing before the pandemic, and this year it’s not getting any easier to find or afford a home in Montana’s urban areas. In Bozeman, the market was already tight, with a vacancy rate that stayed consistently below 3 percent in the years leading up to the pandemic. Sterling Commercial Real Estate Advisors in Missoula released a report saying the vacancy rate there dropped from just under 3 percent to about 1.3 percent from the second to third quarter of this year.

Matt Mellott is an advisor at the firm, and he says there are a handful of reasons for the change, including COVID-19.

"There were already people moving here. People were able to disconnect geographically from their job and bring it with them, and then, obviously, that kicked into super high gear."

He says Montana is expensive relative to the average salary of someone living and working here, but for someone earning a larger salary in an area where the cost of living is higher, it’s an attractive place to relocate to.

"So if you’re the person that is from here, and you have lost your job, then you are now competing with more people for housing."

Mellott says it’s hard to know yet how many people have moved to Montana from out of state because of the pandemic, because most likely moved in the last few months. 

He also said that’s not the only reason for the tight market. He says Missoula has been slow, too, to build new housing.

"Anything the city can do to make it a consistent, predictable process; that will help."

Emilie Saunders, director of communications for the Department of Commerce, said in an email that the state supports the development or rehabilitation of about 485 affordable homes each year.

Montana hasn’t upped that effort for the pandemic, however, says Director of the Montana Department of Commerce Tara Rice. Affordable housing projects take years to develop and current federal COVID-19 aid lasts until the end of 2020. Rice says the state has spent more than $5 million from the federal CARES Act to help people as they face eviction during the pandemic.

"There's been a particular need as individuals who are part of the working population have either suddenly lost a job or had their hours severely cut."

And many more evictions could come. Research firm Stout Risius Ross, LLC, said in an October report that if the CDC’s federal moratorium on evictions isn’t extended at the end of the year, Montana will see up to 10,900 new eviction cases by January 1. That’s more than 8 times the number of evictions in Montana in 2016, according to data from the Eviction Lab at Princeton University.

Montanans looking for housing assistance money from the state have until November 10 to apply.

The Montana Department of Commerce also announced the Montana Eviction Intervention Project last week, which comes from a partnership with the Montana Legal Services Association and will help people facing eviction understand their options. 

"There are people in Montana who are trying to avail themselves of those protections. But navigating that on one's own can be quite difficult," Rice says.

Homeword is a Missoula-based housing counseling agency and affordable housing developer. Its Executive Director Andrea Davis says she expects Missoula and Gallatin Counties will be hit the hardest with evictions if the moratorium is lifted, because they’re already the counties with tightest markets and highest housing costs. 

She also says that Homeword is part of the affordable housing advocacy group Montana Housing Coalition, which is pushing for two pieces of policy during next year’s legislative session. The first would allocate $15 million from the state’s Coal Tax Trust Fund to build affordable housing, similar to a bill passed in 2019. 

Davis says, "That money was spent down almost immediately."

She says they’d also like to see a workforce housing tax credit that organizations like Homeword and developers could use to build more affordable rental properties. 

"Ultimately, we are in a public health crisis, not just a financial crisis. And so it's very critical that people stay in their homes."