Townhome exemptions, accessory dwelling units and building incentives could help address Missoula's high cost of housing when compared to local wages, according to the makings of a citywide housing policy unveiled Wednesday.

The plan, crafted by a steering committee over the past six months, explores a wide range of options that could – if implemented – begin to address some of the economic and regulatory issues driving Missoula's housing costs.

“As you know, over the past decade, increases in home rental and home purchase prices have made it challenging for working Missoulians to afford homes,” said Eran Pehan, director of the city's Office of Housing and Community Development. “We have been working to address this growing concern.”

The steering committee behind the plan's initial recommendation includes a diverse coalition of stakeholders, ranging from real estate agents and developers to banks and government officials.

The working strategies tackle five key topics, from innovation to housing preservation. The recommendations were gleaned by reviewing national research, along with local demographics, codes and growth policies.

“Housing affects all of us,” Pehan said. “It intersects with almost every other social issue and outcome, from education to health, employment and public safety. It also has a direct impact on our economic health.”

While the factors that lead to a constrained housing market are complex and often market-driven, the resulting impacts haven't been overlooked. Rental prices are on the rise, though wages for low- and middle-income earners are not.

That has forced many families to spend a large portion of their income on housing, leaving less for basic needs. Pehan said 69 percent of Missoula residents earning less than $35,000 a year are considered cost burdened.

“That means someone earning less than $17 an hour is struggling to pay their rent,” she said.

High mortgage standards and home prices have also made it hard for some to achieve home ownership, causing them to stay in the rental market. But even those looking to buy may have a tough go of it, given current market conditions.

A household must earn more than $70,000 a year to purchase a $270,000 home – the median price in Missoula. By comparison, Pehan said, the median family income in Missoula is just $66,000.

“This means our public school teachers, social workers, young professionals and many city and county staff members are struggling to purchase homes or have been priced out of the homebuyer market,” she said.

The policy, which enters its second phase of development next month, hits across a wide range of recommended strategies. Strong partnerships between the public and private sector are included, as is a housing trust fund.

The plan mentions a voter initiative for affordable housing, and ways to leverage tax increment financing to support the city's housing goals. It also looks at regulations and codes.

“The regulatory environment is a critical factor impacting housing attainability in Missoula,” said Pehan. “When land use code is not aligned with a community's goals around growth, it has the ability to impede the development of homes.”

Over the next three months, the plan will turn to technical working groups to further specify policy recommendations. This winter, those policy recommendations will be presented to the City Council for possible adoption.

“We're going to have to be really creative about the type of partnerships we come up with, and the polices we set in motion and the incentives we put out there for our community to use,” said City Council member Mirtha Becerra. “It's not a single policy or a single partnership that we need to explore. We're going to have to have a really good tool box we can tap into for the different kinds of affordability we need to provide for our community.”

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