The city of Missoula is moving forward with a plan to further subsidize the construction of affordable housing by establishing a trust fund, including the use of general fund dollars and tax increment financing.
Under a draft ordinance published Monday, funding from the pool could be used to cover the cost of land or infrastructure. It could also be used to provide gap financing or loan guarantees, or to cover development and permitting fees.
The Missoula City Council’s Committee of the Whole will take the issue up for the first time on Wednesday. The fund would be administered by the mayor and receive recommendations from a nine-member Affordable Housing Citizen Advisory Committee.
“The affordable housing trust fund is not intended to be the sole source of funding for affordable housing,” the draft suggests. “Any activity or project eligible for support from the affordable housing trust fund is expected to develop additional sources of funds.”
Talk of a possible trust fund to boost the construction of affordable housing surfaced shortly after the city adopted its Office of Housing and Community Development, along with its housing policy “A Place to Call Home.”
The policy was adopted by the City Council last June and recommended the creation of an affordable housing trust fund, along with other tools that could be used to address Missoula lack of affordable housing.
A draft resolution published with the proposed policy on Monday recommends directing no less than $100,000 each year from the city’s general fund into the affordable housing trust fund, and taking $1 million in tax increment financing from the Missoula Redevelopment Agency.
Transportation, infrastructure and road district funds could also be applied. The plan seeks to establish an account of $10 million, which “would allow the trust fund to meet annual community housing and program goals fully.”
When the city unveiled its affordable housing plan last summer, city staff acknowledged the need to establish a trust fund “by looking at ways to use private equity rather than relying on tax revenue or federal subsidies alone.”
Since that unveiling, the median cost of housing in Missoula has topped $300,000. The resolution suggests that 53% of Missoula renters face increasing rental costs in homes that are aging and tend to have high energy and heating costs.
The initial hearing is scheduled for Wednesday at 1:50 p.m.