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With housing tight and costs rising, city and county of Missoula turn to solutions

With inventory lacking and housing prices soaring, the city and county of Missoula have placed attainable housing among their top priorities this year, though efforts to move the dial began well before the pandemic hit and the Rocky Mountain West became a haven for those seeking refuge.

While housing for the city’s low-income residents has received much of the attention, attainable housing for the working middle class is gaining momentum, and local officials believe the pieces are falling in place to boost that class of inventory.

“Our housing policy addresses not only inventory issues for very low-income individuals, but really we’re emphasizing housing for working families,” said Missoula Mayor John Engen.

In February, the City Council authorized the mayor to sell 9 acres of city-owned property off Scott Street for a mixed use project, including permanently affordable housing.

The development, headed by Ravara LLC, will result in 70 units of permanently affordable housing built on a 3-acre land trust and 6 additional acres of market rate housing.

The 70 affordable units represent the largest permanently affordable land trust development in Montana, according to the city. Once completed, it will essentially double what’s currently available in the Missoula market.

The project is expected to break ground later this year, and Engen attributed its success to the city’s intentional efforts to bank land. Doing so, the mayor believes, lowers the costs for developers and enables builders to create entry-level housing.

“Land is a significant factor in the cost of housing,” Engen said. “We’re applying our resources to buy down the cost of infrastructure, and ensuring through those partnerships and our investment that there’s long-term affordability there. This is a model we feel can be replicated throughout the community.”

The city owns a number of other prized parcels around Missoula, including the old library block in downtown Missoula and property in the Riverfront Triangle. It also owns several acres in the Midtown district, where a mixed-used project with a housing component is expected at some point in the future.

More recently, the city launched a public process for property it owns in the West Broadway corridor. It’s there where hundreds of new housing units could land in a public-private partnership, depending on how the city and public decide to use it.

“The city owns a number of properties there, along with the Sleepy Inn,” Engen said. “When that facility is no longer necessary for non-congregant shelter, we feel there’s remarkable opportunities for that public-private partnership that really buys down the cost of housing and ensures that housing has some affordability over the long haul.”

Missoula County is taking steps as well, according to Commissioner Dave Strohmaier. It recently brought on a housing coordinator – a new position within the county. It’s also working on a strategic housing policy, something the city put in place several years ago.

Strohmaier said the federal grant earmarked for Mullan-area infrastructure will help drive additional housing across a number of income levels. Both the city and county also are exploring regulations that add to housing costs.

“This is going to be a growing part of our community and be a receiving zone for many folks,” Stohmaier said of the Mullan area.  “It maps out a vision that includes housing types in a variety that embraces our entire community.”

In the low-income category, several projects are also slated to begin, including the $54 million Vallagio project off Scott Street, which will include 200 new units. The county also donated several acres of land near the detention center in 2019 to help boost a separate project.

That effort, dubbed Trinity, is set for a spring groundbreaking and will provide around 130 units of affordable housing that include wrap-around services. Such efforts are new to Missoula.

“It will provide low-income housing and permanently supportive housing for the most vulnerable in our community,” Strohmaier said. “We’re all about thinking as creatively as possible.”

According to the Missoula Organization of Realtors and its latest market report, the cost of a residential lot reached a new high in 2019. The median price climbed to $115,000, marking a 28% increase over the prior year. In comparison, the cost of a residential lot in 2010 was $86,000.

The upward cost of housing and land have forced local government to find ways to bring affordability to the projects it can control. Land banking provides that option, Engen said.

“Without sorting inventory and somehow controlling the inflation around housing, we can buy affordability one day and have it go out the door the next,” he said. “We’re creating tools and programs that allow us to maintain that affordability over time.”

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