By Martin Kidston/MISSOULA CURRENT
The construction of a sixplex doesn’t generally qualify as news, but with 1,800 Missoula-area families on the waiting list for subsidized housing and rental prices climbing, even six new units can make a small difference.
The Missoula Housing Authority will break ground this summer on a new apartment complex planned for California Street, located just outside the Old Sawmill District. The lot was donated by the city of Missoula and building costs are estimated at $700,000.
“It’s affordable housing, so it won’t have a subsidy attached to it, though people with vouchers can live there,” said Lori Davidson, the housing authority’s executive director. “The rents are capped by the state HOME program, so they’ll stay affordable. Everything we can add to our housing portfolio will help.”
The property is located just down the street from a 27-unit affordable housing project under construction by Homeword. Earlier this month, developer Don Thompson also announced plans to construct a new 24-unit workforce housing project next door.
While the sixplex planned by the Housing Authority doesn’t qualify as subsidized housing, Davidson said, it does represent affordable housing under guidelines set by the HOME program. Directed by the U.S. Department of Housing and Urban Development, the program is designed to create affordable housing for low-income households.
“The units don’t come with a subsidy, so they have to be able to pay whatever the actual rent is,” Davidson said. “They can bring a voucher in, which will cover a portion of the rent. It’s controlled by the HOME program.”
Last month, the Missoula Organization of Realtors released its latest housing report, which found that rental prices in Missoula jumped 4.1 percent in 2015. The cost of rent increased for nearly every type of unit, and nearly half of all renters spent 30 percent of their income on housing costs, the report found.
The increase in rental rates continues to outpace area wages, putting a strain on the Missoula Housing Authority. While the agency supports 774 Section 8 vouchers to help subsidize rent, its waiting list grew another 8 percent last year, with nearly 1,800 households now waiting for help.
Davidson said she sees the need every day.
“All of the new housing, with the exception of Homeword and our sixplex, is at market rates,” Davidson said. “Market rents are being driven up by the new construction. We’re not seeing prices trend down yet on the market-rate units at the lower end. It’s getting absorbed quickly.”
Davidson said the agency will continue to look for opportunities to provide more affordable housing. It’s not easy, she said, given land prices in Missoula.
“We’re always looking for more projects, but land is just at a premium,” she said. “Once you get the land, you have to hold it for two or three years to get funding from the tax-credit program. It takes two or three yeas of applications to get funded because it’s so competitive.”