State denies tax credits for Missoula senior housing project, killing affordable apartments

A proposed affordable housing complex for Missoula’s older residents was scuttled Monday when it was denied federal housing tax credits by the Montana Board of Housing.

With the subsidy, the Skyview apartment complex could have rented its units for $525 to $790 a month, depending on the number of bedrooms and the renter’s income.

Located at 1600 Cooley, Skyview was intended as “a community where people can live out their retirement years,” developer Alex Burkhalter told Missoula City Council members last August.

Local social service agencies said the need for affordable housing among Missoula residents 55 and older is significant – and growing.

Councilwomen Julie Armstrong and Heidi West broke the bad news to their fellow council members on Monday night, after having traveled to Helena with the developer to pitch the project earlier in the day.

They came home with a rejection.

“Missoula needs affordable housing,” a dejected Armstrong said, adding that the delegation attempted to persuade the Housing Board that it’s “not all just puppies and unicorns and rainbows” in Missoula.

“We have many people who need help here,” she said.

But the tax credit program is highly competitive, and the Board of Housing has limited funds to distribute statewide, so many projects are denied funding.

“There’s no way any of these projects should have gone unfunded,” West said of the developments pitched at Monday’s session in Helena. “Everyone was equally deserving.”

West said she hopes the Skyview developers will take their request to the Housing Board again next year, and that they’ll succeed the second time around.

Developer Alex Burkhalter made the case for his Skyview senior apartment complex Monday before the Montana Board of Housing. (Julie Armstrong via Facebook)

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.

Here’s how the Board of Housing explains the subsidy:

“The low-income housing tax credit is available under Section 42 of the Internal Revenue Code (IRC) of 1986. The credit is a federal income tax credit for owners of qualifying rental housing which meets certain low-income occupancy and rent limitation requirements.

“The credit is taken as a reduction in participant’s tax liability over a 10-year period. The credit can also be sold to investors to act as a financing source.”

The federal government has designated the Montana Board of Housing to distribute the tax credits to in-state projects.

As part of the application process, the Missoula City Council held a public hearing on the Skyview apartments in mid-August. A transcript of the hearing was required as part of the application packet.

At the August session, the development’s strongest critic was Ward 4 Councilman Jesse Ramos, who called the development a “Band-Aid” that would force all city taxpayers to subsidize one apartment complex’s residents.

It wouldn’t solve Missoula’s affordable housing crisis, Ramos said, and would pull money out of local tax receipts.

“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.”

At that meeting, 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.”

Ramos was not at Monday night’s council meeting.