MISSOULA — The Missoula Redevelopment Agency (MRA) on Thursday tweaked portions of its workforce housing guidelines to provide more clarity based on lessons learned from several projects.
Among the changes, the MRA board removed a previous rule that gave deconstruction-only projects a pass in paying into the city's Affordable Housing Trust Fund.
The changes also allow an applicant seeking tax increment for qualified improvements to come back at a future date to request assistance for workforce housing.
“Typically, we're not bringing projects back for additional funding requests,” said Annie Gorski, deputy director of MRA. “That is an addition to the guidelines to provide that clarity.”
The Legislature in 2021 added workforce housing to the state's definition of infrastructure, allowing qualified housing projects to seek tax increment financing.
In 2023, upon the feedback of a working group, MRA drafted and the City Council approved the city's Workforce Housing Program.
The program requires most projects that receive more than $100,000 in tax increment and don't include any workforce housing to contribute 10% of its tax increment award to the city's Affordable Housing Trust Fund.
As initially drafted, that included a number of exceptions. Projects seeking tax increment financing where the only eligible item is deconstruction was among them.
But few if any projects seek tax increment simply for deconstruction, which prompted MRA to remove the exception from the list.
The agency said it will still work to incentivize deconstruction and it doesn't believe the change will impact the number of projects brought to the board for consideration.
“We rarely have a deconstruction project only,” said Gorski. “Many of the projects that come to the board include a combination of building removal – materials that can't be salvaged – and true deconstruction with materials that can be reused and repurposed.”
Historically, MRA also has had a policy that prohibited projects that receive tax increment financing from coming back at a later date asking for more funding, regardless of whether the project was ill-planned or incurred additional costs.
But given the complexity of the Workforce Housing Program and the time it takes to work through the income qualifications and building costs, MRA will now allow qualified projects to seek future workforce housing assistance.
“There often is a time window where right-of-way improvements need to occur before vertical construction begins,” said Gorski. “This new language allows applications requesting tax increment assistance for right-of-way improvements, building removal or related work, to come back to request Workforce Housing Program assistance.”
When adopting the Workforce Housing Program guidelines in 2023, MRA board members anticipated that changes would need to be made based on interactions with the program.
While the changes are small, board members believe they will enhance the housing program and bring clarity to the guidelines.
“We expected there would be amendments once people started to go through them,” said board member Ruth Reineking. “These seem reasonable.”
