MISSOULA — The "cost-of-housing" theme continued to play out in Missoula this week, with economic leaders naming regulatory policies, construction costs and the high cost of land as challenges facing the development community.
But the Missoula Economic Partnership (MEP) sees hope on the horizon. From a newly launched Housing Impact Fund to code reform that's underway at the city, the ongoing efforts could soon help address a number of issues.
“We won't solve this problem without the city making code reform a priority,” said Grant Kier, president and CEO of MEP. “Complying with changes coming out of the Legislative session and making those changes now is really important for us to tackle that leg of the stool.”
On Monday, the Missoula City Council approved the Missoula Redevelopment Agency's $5.8 million purchase of 13 acres near Southgate Mall. The same day, City Club Missoula hosted a forum focused on the challenges of infill development.
Along with inflation, construction costs and the city's conflicting policies, the availability and cost of land remain an issue.
While the city's efforts to bank land have been criticized by some, advocates see it as a way to remove land costs as a hurdle for housing development.
“Land availability is also an issue and land banking can serve as a valuable tool when transforming underutilized places,” said Kier. “It can also help the private sector overcome barriers.”
The city purchased land on Scott Street years ago and partnered with the private sector in developing housing. Construction is underway and when it's finished, it will provide hundreds of market-rate and for-sale housing, some of it placed under strict income qualifications to ensure affordability.
Monday's approval of Southgate Crossing near the mall also comes with high hopes of dense urban infill. Early plans call for multi-story housing, retail, employment centers and parks.
Kier said that bringing “significance” to Missoula's housing challenges helped complete the deal with the property's former owners, who sold the parcels for less than market value.
“It was that appeal that motivated the two landowners to sell that parcel to the city,” said Kier. “They recognize that housing is a really important issue right now. A partnership with the city and private sector to deliver housing at scale at that site, they see it as a very big value also to their business.”
Area businesses have also been hindered by the city's housing costs. While income has risen in recent years, it hasn't kept pace with area housing costs, and that has made it difficult for businesses to recruit and retain workers.
The city's “affordability index” also continues to lag, according to the Missoula Organization of Realtors (MOR). During the release of its housing report in March, MOR said that a buyer looking to purchase a median-priced home would need to earn an annual income of $165,000 if placing 5% down on the purchase. With 20% down, the required income would still hover at around $136,000, but few homeowners make that sum and even fewer can cover such large down payments.
But Kier said the city's recent purchase of Southgate Crossing and other city-held properties, when coupled with the Housing Impact Fund, could help move the dial.
“There are places within our city limits where there's still opportunities for housing at scale,” said Kier. “The sellers of (Southgate Crossing) appreciate that workforce housing is a really big need in the community. That intent is really important. Without that intent and cooperation, you don't have willing sellers.”
