Missoula housing policy expected by summer; housing trust fund possible in future
Two years after establishing an office dedicated to housing and community development, Missoula Mayor John Engen expects to see a suite of policies on the issue this summer, which could call for the creation of a housing trust fund.
Engen on Wednesday said the policies will likely go before the City Council in the coming months and include the recommendations of the Housing Policy Steering Committee.
“We’re heading down that path,” Engen said. “We’re going to talk about goals, obstacles to those goals, and things we can do to change them. There will be zoning and financial incentives. It’ll be a suite of opportunities for us.”
The committee, appointed by the mayor, is exploring ways to address a number of housing issues, including diversity of housing types and affordability. Once the policy is amended and adopted, Engen said, the city will look at funding recommended projects using a number of tools.
Those include tax increment financing, Community Development Block Grants, state HOME funds and partnering with the private sector though tax credit programs. It could also result in a housing trust fund in the form of a general obligation bond decided by voters at some point in the future.
Engen said that wouldn’t happen this year.
“One of the recommendations we’ll get from the housing steering committee is a recommendation to establish a housing trust fund,” Engen said. “A lot of communities use them, and they tend to be revolving loan funds to buy down the most expensive part of housing development, and that’s land costs. We’re also looking for ways to subsidize long-term affordability.”
While the median price of a home in Missoula stands north of $270,000, the cost of a residential lot has also increased, according to figures released earlier this year by the Missoula Organization of Realtors.
In 2017, the cost of a residential lot climbed 8 percent to a median price of $92,000. Engen said land costs are closely tied to affordability, and funding generated through a housing trust fund could help address it.
“It could go to purchase land to subsidize affordability,” he said. “There’s a lot of ways those resources could be deployed. Most often, what communities find is that those housing trust fund dollars are heavily leveraged, so for every buck you spend, you get five bucks back.”
Housing affordability has surfaced as an issue across Montana. Earlier this year, state lawmakers began exploring ways to streamline a number of regulations aimed at housing costs, just as other cities in the Pacific Northwest pursue their own solutions.
While a suite of policies could be unveiled this summer, Engen said the work to amend and adopt them will take longer. Even so, he’s pleased with the committee’s progress on the issue.
“You have citizens who are very interested in this topic,” he said. “You’ve got a City Council that’s interested in trying to find solutions, and staff is in the same boat. It’s sort of top of mind.”