At $199K, new home draws attention as Missoula struggles with affordable housing

Located at 1960 South 7th St. West, a new home by Saddle Mountain Construction includes two bedrooms and 1.5 baths, along with nine-foot ceilings and granite counters. Listed at $199,900, it’s gaining attention in a city lacking affordable housing.

Some people are telling him to raise the price, but Ryan Frey is going to wait and see what happens.

The Missoula home builder has completed the first of two new single-family homes and has listed the property for less than $200,000, well below the median price of a home in the city.

At $199,900, the well-appointed property is considered affordable – a rarity in a city struggling with the cost of housing, which increased 6.8 percent in 2016 to $255,000.

Since then, the median price has jumped to $275,000, according to the Missoula Organization of Realtors.

“Doing a small footprint of 850 square feet, we were able to consolidate the underground and all of the utilities,” Frey said of the project. “The biggest issue we run into in getting this affordable housing is the parking spaces and backing needs. It was the single biggest hurdle we had to figure out in the whole process.”

Frey, of Saddle Mountain Construction, purchased the lot two years ago. It currently includes one older home, which will remain in place. On what remains of the property, he plans to construct two 850-square-foot homes and one duplex.

Frey believes his efforts fit well with the city’s focus on inward growth and makes good use of limited space. But the city’s parking requirements remain a challenge for developers looking to build affordable properties in Missoula, he said.

“Adding this duplex and two single-family homes, we had to put in seven parking spots,” he said. “Parking takes up a massive amount of square footage. I think Portland has tackled this issue and they’ve done a lot to relax their parking rules to promote infill versus sprawl.”

After buying the property, Frey said Saddle Mountain first considered a tiny home development with parking placed in the middle. But that wasn’t possible without razing the existing home.

What’s more, Frey said, he couldn’t build enough units on the property under the city’s existing parking rules. That would have taken up too much space, defeating the intent of the project and making it financially unfeasible.

“We had to revamp our plans and ended up where we’re at,” Frey said. “We also used the townhome exemption, so we didn’t have to subdivide for each lot. That would have driven up the cost because you’d have to subdivide, and you can’t have a subdivision lot in Missoula that’s less than 3,000 square feet.”

The new home, located at 1960 South 7th St. West, includes two bedrooms and 1.5 baths, along with nine-foot ceilings and granite counters. A second home is also planned for the property, along with a duplex.

“We’re adding some nice, quality housing,” said Frey. “It’s not massive square footage, but it’s a nice neighborhood improvement. It’s creating infill, which city zoning is all for. A lot of people are doing this and that, but I think we have a neat, modern new design for an urban setting.”

While new homes aren’t rare in Missoula, finding one listed at under $200,000 is. Back in 2001, the median price of a home in the city was just $138,000. It broke the $200,000 mark in 2006 and has climbed in all years but three, that being the recession years from 2008 through 2010.

Given its price point, the Saddle Mountain project has gained attention.

“You hear a lot about affordable housing, and the city talks about it a lot,” said Frey. “I don’t know of an easy way to do it with permitting costs and the cost of land right now. That all makes it really difficult, especially with the parking requirements. All that drives the cost of housing up.”

The home will be featured in this weekend’s Parade of Homes by the Missoula Building Industry Association.