Prepared buyers snatch up new affordable housing units in Missoula
A two-bedroom home in Missoula listed for $120,000 might be eye catching, but you won’t find it listed in any real estate ad. Neither is the house next door, a quaint one-bedroom property for $98,000.
When Homeword finished six “small homes” on Montana Street and put them up for sale as permanently affordable housing in late February, it knew they’d likely sell.
But no one predicted just how fast.
“Four are under contract and two are still available,” said Andrea Davis, executive director of Homeword. “The demand is really heavy for any home ownership opportunities in this price range. There are very few homes under $250,000, let alone under $120,000 or $98,000, where we’ve got these priced.”
Homeword is one of several Missoula-based nonprofits looking to make permanently affordable housing available for purchase. The median price of a home in Missoula stands just shy of $300,000, and homes listed below $250,000 are in short supply.
Homes below $200,000 are nearly non-existent.
“When we know how many people are interested in home ownership, and given the lack of supply, a few houses doesn’t meet the current demand,” said Davis. “But it’s a significant number of income-restricted homes to see produced at any one time.”
That “significant number” includes the seven income-restricted units developed on Front Street by the North Missoula Community Development Corp., which cut the ribbon on Lee Gordon Place last week.
The project includes four two-bedroom units for $148,000, and two four-bedroom units priced at $175,000. The single 2-bedroom handicap unit listed for $135,000.
All seven are already accounted for.
“They’ll all be closed out by the end of this month,” said Bob Oaks, executive director of NMCDC. “They were very much in demand. We had to do a lottery system for those who qualified and who had pre-qualification letters from a lender.”
While the demand for affordable housing of any sort remains high, it’s especially there for working families looking to purchase a property and begin growing equity.
Building such properties isn’t cheap, though efforts to establish community land trusts have helped drive down costs, including the Montana Street homes and Lee Gordon Place.
Since 2002, roughly 42 permanently affordable units held by a Missoula land trust have served 99 families. Housing experts believe more land trust projects would take place if the bare ground were available.
“The housing policy will be something that really creates some serious momentum in Missoula, not only for organizations like Homeword that have a mission to create affordable homes for purchase or rent, but also our market-rate peers,” said Davis. “They’re having a hard time producing homes that are attainable by the general workforce. There’s a lot of interest I think.”
Oaks agreed and said more affordable housing is needed across Missoula, including the downtown district. But land costs there are among the highest in Missoula and building costs come equally high.
Lee Gordon Place and its seven units cost around $2 million.
“It has to be subsidized,” Oaks said. “There’s no affordable housing anywhere without some type of subsidy going into it, and especially for home ownership.”