An affordable housing development for Missoula citizens 55 and older exposed the deep divide between the City Council’s most conservative member and his fellow councilors at this week’s meeting.
Ward 4 Councilman Jesse Ramos complained that the proposed Skyview apartment complex was a “Band-Aid” approach to the city’s affordable housing problem and was flawed because of its reliance on federal housing tax credits managed by the Montana Board of Housing.
If Missoula developer Alex Burkhalter is successful in receiving the highly competitive tax credits, the development – because it targets low-income renters – will qualify for a property tax exemption.
That, in turn, will allow Burkhalter to lower the rental rates to as low as $525 for a one-bedroom unit and $790 for two bedrooms, depending on a renter’s income.
The state’s application process called for a public hearing before the City Council, but not an actual vote of the council. A transcript of the hearing must then be included with the application.
The notion was to solicit public comment on whether the development meets a community housing need. Monday night’s discussion was significantly wider in scope.
And while Ramos never indicated how he would vote if the council had a say, he did complain that by removing the development from Missoula’s tax rolls, the federal tax credits force “the majority of the rest of the taxpayers” to pick up the cost of fire and police protection and other services for Skyview’s 102 apartments.
“To me, this appears to be the government trying to fix mess-ups by the government,” he said. “While this is a Band-Aid for the problem, it is definitely not a solution. This is going to provide affordable housing for a little more than 100 people and Missoula is a city of 70,000 people.
“This is not going to even come close to putting a dent in the problem.”
To fix the housing affordability problem, Missoula must make “true, substantial changes,” Ramos said. His list included reducing the regulatory burden on developers, reducing taxes, incentivizing businesses to bring new jobs to Missoula, and “not having so much open space.”
“The more property we take off the general rolls, available for development, the higher the housing costs are,” he said. “This does not help the majority of Missoula. A lot of lower-income folks will not be able to fit into this property.”
Ward 5 Councilwoman Julie Armstrong was the first to rebuke Ramos.
“I disagree 100 percent,” she said. “I have been working extensively with seniors and I know what kind of fixed incomes they live on. And this is exactly the kind of housing that we need in Missoula. This is who we should be building affordable housing for. I agree we need a lot more of it. But this is exactly the increments we need to support.”
Ward 1 Councilwoman Heidi West counseled Ramos that “as a nation, through our federal tax code, we have decided that we are going to fund affordable housing in this way.”
In fact, the tax credit program has touched 90 percent of the new affordable rental housing built in the United States since the tax code was changed in 1986, according to Burkhalter.
The subsidy goes to the developer to reduce construction costs. It is then the developer’s responsibility to rent the units at affordable rates.
Skyview “is not going to meet everybody’s need, but it’s going to meet the need of 100 households,” West said. “And that’s substantial for those 100 households.”
“For those 100 people, this will dramatically change their lives,” said Ward 5 Councilwoman Stacie Anderson. “If we have to do it in 100-unit increments, that’s what we have to do. We don’t have a lot of other choices.”
Burkhalter said that, as a developer, “the most exciting part is that this building is so much more than an apartment complex.” Skyview’s design and many “extras” will encourage the seniors who live there to get outside of their rooms and interact with one another – a key to longer, healthier lives.
The preliminary design includes a card/billiards room, a chapel, a craft room, exercise room, a community room with a kitchen (in addition to kitchens in each apartment), a great room and an on-site manager.
Located at 1600 Cooley, Skyview will be “a community where people can live out their retirement years,” the developer said.
Susan Kohler, CEO of Missoula Aging Services, testified on behalf of the project, saying its need is clear. Her organization intends to partner with Burkhalter’s Housing Solutions LLC to help Skyview residents “age in place.”
“We want to help people, as they age, to continue to be able to stay in these apartments as long as possible,” she said. The development has easy access to St. Patrick Hospital, several medical clinics, social service agencies, a grocery store, public transportation and downtown Missoula.
Jim Morton of the Human Resource Council said the property could easily have been developed with high-end condominiums. Burkhalter should be commended for securing a buy-sell on the land – “an incredible coup for the lower-income folks in our community.”
Morton reminded council members that Skyview is funded through private-sector investments. “It’s a very difficult task,” he said, to put together a project that includes substantial private dollars and assistance in the form of federal tax credits.
He encouraged council members to let the Board of Housing know that the project will be welcomed in Missoula and is needed in Missoula.
“Get active, understand it and ask what you can do to help,” he said.
Ramos persisted, objecting to the federal government’s involvement in the development.
“While this helps 100 people, we have to not get distracted about this,” Ramos said. “For the love of God, this is not the answer. Government subsidy is not the answer. Ultimately, less government is going to be better. We see this evidenced in this development. The less the government is in the pockets of developers with the tax dollars, the better.”
Ramos contended that the tax credits given Housing Solutions wouldn’t lower the overall market cost of housing in Missoula. Skyview would only benefit those seniors who live there, he said.
“This is a Band-Aid,” Ramos said, “and regardless of whether I support this project or not, I do not support further projects like this as a solution to our affordable housing problem. We have got to get the government out.”