Housing advocates will use a small pot of money and private funds granted years ago to Missoula County to pursue a new land trust model to help income-qualified buyers purchase a home and hopefully build equity over the years.
The program, in partnership with Trust Montana, looks to support a scattered community land trust to address issues of affordability in the Missoula urban area and give certain buyers a chance to step into ownership.
“We have seen community land trusts provide that step people need to move from rental to home ownership,” said Hermina Harold, executive director of Trust Montana. “We’re seeing it across the county, and it’s really blowing up as a model. I’m excited to be able to expand in this way.”
Erin Kautz, a grants administrator for Missoula County, said the program’s funding dates back to around 1992 when the county got a first-time home buyer grant from the Montana Department of Commerce to help qualified residents pursue a purchase.
The funding originates from the Home Investment Partnerships Program at the U.S. Department of Housing and Urban Development.
“That program was in effect since 1992, but since home prices rose, we haven’t been able to do anything since 2006, with the different regulations the federal government puts on how much you can put towards the maximum price of a home,” said Kautz.
Housing prices in the Missoula urban area have increased nearly ever year over the past 20 years. While a few years saw the median price of a home fall, such as the three-year span from 2008 to 2010, most years have seen the median price climb.
In 2001, the median price of a home in the Missoula urban area was just $138,000, according to the Missoula Organization of Realtors. By 2010, the median price had climbed to $205,000. This year, according to the latest report, the median price topped $315,000.
Kautz said funding in the county’s HOME program account can help some buyers overcome issues of affordability by acquiring the land beneath existing homes and thereby removing that portion of the cost.
“We can use our HOME program to provide the gap financing to make it affordable for people who would normally not be able to buy a home in Missoula’s market,” said Kautz. “This is a first start. We’re seeing this as a pilot project. Trust Montana will be seeking additional funds to help push the project forward.”
Other land trusts exist in Missoula, including those managed by the North-Missoula Community Development Corporation. Such trusts separate the cost of the land from the cost of the home upon it. The home owner is then granted inheritable rights to the land.
But the challenge with most existing land trusts in Missoula is that they often require a large piece of property, which is not only getting harder to find, but has become increasingly expensive. The concept behind the scattered land trust removes the need for a single large parcel but looks instead to individual home lots.
“It’s a great way to create land trusts without having to buy giant pieces of property and look for big expanses of land all for sale at once,” said Missoula County Commissioner Josh Slotnick. “This is a great way to figure out how to do land trusts without needing to have one big chunk of earth.”
Slotnick said the approach can also help qualified buyers build equity and in some cases, break the chain of generational poverty.
“I’m a strong believer that generating equity is what breaks the chains of generational poverty,” said Slotnick. “It’s not first time home buyer in mind, it’s the first generation home buyer. If we can set someone up to generate equity over time, they’ll be able to pass on the opportunity to buy a house to their children even in this form of small amounts of money.”