City Council approves creative financing to secure affordable apartments
In a city where average earnings don’t mesh with average monthly housing costs, the Missoula City Council took action Monday night to help a local nonprofit group secure 161 apartments as affordable housing well into the future.
By unanimous vote, council members agreed to the city acting as a conduit for the issuance of $10.3 million in revenue bonds, allowing Homeword to purchase the Creekside Apartments.
The action comes at no risk to the city and no cost to taxpayers.
But it means a home for 161 families or individuals who rely upon subsidized housing to have a home in a city where it’s increasingly difficult to afford housing, said Homeword executive director Andrea Davis.
Even two years ago, when Homeword last compiled the statistics, the average monthly rent for a two-bedroom apartment in Missoula was $905.
To afford that apartment, a Missoula resident would need to earn $17.42 an hour, working 40 hours a week.
But the median wage of Missoula workers is $11.03 an hour and the state’s minimum wage is $8.15 an hour. At minimum wage, a worker could afford just $420 a month in rent.
That’s one of the reasons Homeword and the city of Missoula worked together with First Security Bank to create a financing arrangement that will allow the nonprofit group to buy Creekside Apartments.
When Creekside went on the market last May, Davis said, it was clear that the owner was looking for “top bids” – and that private, for-profit businesses were interested in buying the complex.
Those businesses likely would have converted the now-affordable housing complex to market-rate apartments, Davis said. And the current Creekside tenants would have lost their homes.
Thirty-three percent of the apartments are occupied by residents with Section 8 Vouchers that pay part of their rents. The rents also are subsidized to keep them lower.
Located on East Broadway, along the Clark Fork River in Hellgate Canyon, the apartments’ loss as affordable housing would be devastating – not only to Missoula, but to the state, Davis told City Council members Monday night.
“Our intention is to acquire the property and keep it affordable,” she said.
The financing plan was endorsed by a dozen members of Missoula First United Methodist Church, who meet weekly as a Faith and Justice Class, and who testified that they want families to have a place to live in Missoula.
“And we would like to see more efforts like this in the future,” said class spokeswoman Jana Staton, who said the group supports affordable housing, the City Council, the city of Missoula, Homeword and Creekside.
Jesse Ramos, who is running for City Council in Ward 4, also endorsed the financing plan.