Calling it a key piece of its housing plan, the city of Missoula agreed Monday to issue tax-exempt revenue bonds to help fund the design and construction of an affordable apartment project that will include 202 units when it opens in 2022.

Low-income housing tax credits, combined with the tax-exempt bonds, will save the developer an estimated $670,000, allowing the savings to be passed on to future tenants.

Combined with a significant land donation from Missoula County, the project will help close the gap on what most agree is a pressing community need.

“It will most certainly make a huge dent into a problem we've been facing for several years now,” said City Council member Mirtha Becerra.

The tax credits are issued to the state by the federal government. The Montana Board of Housing serves as the local conduit by awarding the credits to private and nonprofit developers.

Those developers can then sell the credits to private investors, who are able to claim the tax credit over a period of 10 years. There is no risk to the city, according to officials, and no cost to local taxpayers.

Eran Pehan, center, director of Missoula's Office of Housing and Development, led the formulation of the city's affordable housing plan. (Missoula Current file photo)
Eran Pehan, center, director of Missoula's Office of Housing and Development, led the formulation of the city's affordable housing plan. (Missoula Current file photo)
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“We're working toward the development of 590 low-income housing tax credit units in the next five years, and this model helps us get there,” said Eran Pehan, director of the city's Office of Housing and Community Development. “It's arguably the most important resource that's available to us today to develop affordable housing.”

The Trinity project, owned 50-50 between Homeword and the Missoula Housing Authority, will include 202 units on two parcels, including 72 units off Cooley Street and 130 off Mullan Road.

The Mullan parcel was donated by Missoula County over the summer, a fact that still rankles some opponents. The land was purchased by the county after voters approved a $17 million bond to build the Missoula County Detention Center in 1996.

“Nothing was said about affordable housing,” said Renee Mitchell. “Let's call it subsidized housing, because that's what it is. You're using it (the property) for something totally different than what the people voted for. I find this totally disagreeable.”

The county has said repeatedly that it has the land it needs to expand the jail if needed, though the longer goal looks to make systemic changes to avoid the need for a jail expansion.

Without such a donation, the Trinity project would remain untenable, as the land costs would add an estimated $1.2 million to the project.

Four acres of county land just east of the Missoula County Detention Center were donated for the homeless and supportive housing project. (Missoula Current file photo)
Four acres of county land just east of the Missoula County Detention Center were donated for the homeless and supportive housing project. (Missoula Current file photo)
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“Those folks at Missoula County stepped up,” Missoula Mayor John Engen said. “They recognize that we've got a lot of folks in the (jail) who don't belong in the (jail). This is a project that, through a whole lot of cooperation and collaboration, will really save lives. We're going to have to do more of this, but this is a great start.”

The city's immediate goal is to create 590 units using low-income housing tax credits in the next five years. Pehan said it will achieve 450 of those in three years through a number of projects that are funded and in pre-development, including Trinity.

The city also looks to provide a suite of affordable units using a number of other tools, she added.

“We're looking at other things like community land trusts and first-time ownership options for qualifying households,” Pehan said. “We have an array of strategies we're deploying. We have a goal to provide safe and affordable housing to a few 5,000 Missoulians during those five years through a number of housing typologies.”

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