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Frustrations over Missoula housing costs, shortages, rental spikes simmer during City Council

City Council member Heidi West, left, and Hermina Harold, executive director of Trust Montana, tour Lee Gordon Place before its opening to qualified buyers in 2019. (Missoula Current fie photo)

Members of the public on Monday night directed their frustrations over housing at the Missoula City Council, and council members passed that frustration on with a critical review of the 2021 Legislature and its relative failure to address the statewide housing crisis.

In a coordinated effort, nearly a dozen callers urged the city to take urgent action to address Missoula’s rapidly rising housing costs, its low vacancy rate and its soaring rental prices.

From economic evictions to one’s inability to find housing given the lack of supply, the problem, they believe, has reached critical mass and threatens to banish long-time residents from the city.

“I’m begging you to take immediate action on some things that can stop the occurrence on what amounts to evictions,” said Josh Decker. “I would beg you to implement strict, harsh and restrictive restrictions on Airbnbs to increase the housing stock. I would beg you to implement immediate rent freezes and rent control. I would beg you to institute inclusionary zoning with a plan to litigate its legality.”

City Council members, joined by the mayor, said that outside a few exceptions, state laws greatly reduce their ability to directly address housing prices and the free market.

The 2021 Legislature made it illegal for a city to implement inclusionary zoning as a tool to address housing costs, nor does the city have the authority to dictate actions taken by landlords and property owners.

Missoula Mayor John Engen said many of the suggestions offered on Monday were “off the table” given current state law and the political alignment in Helena.

“There are great ideas but they’re not within our reach, and they are very unlikely to ever be within our reach in Montana unless there’s a marked change on who gets sent to the state house to represent communities like Missoula and other cities,” Engen said. “This body is responsible for much and controls little. What is within our control we’ll endeavor to change and modify and make better.”

While the city is handcuffed in many regards, Engen said it has and will continue taking creative steps to address housing costs. Among them, the city has begun purchasing properties it plans to use for housing – a move intended to lower the cost of development.

Engen said the city also is directing more TIF revenue toward housing. The funds have been used recently to help fund a number of housing projects, and those projects are in turn funded with revenue from commercial projects, such as the new downtown hotels, that receive some TIF support.

“The projects some folks don’t like so much put money in the bank so we can do other projects. Fundamentally, you can recognize those projects are fueling the engine of affordable housing in our community, and it’s important to remember that,” Engen said. “We’ve been working on these issues for a very long and time, and they’ve been exacerbated painfully a global pandemic.”

As of April, according to the Missoula Organization of Realtors, the median housing price in Missoula stood at $406,500, and a listing spent just 77 days on the market. Two years ago, the median price was $299,000 and a listed home averaged 170 days on the market.

The picture is equally challenging in the rental market. The vacancy rate currently sits at around 1%, resulting in a paltry inventory of available rentals. The price of rent has climbed nearly 9% from last year, though some have reported increases as large as 50%.

Economic evictions have become a new concern, but the local housing crisis isn’t isolated to Missoula. Costs are rising across the West and nearly 40 million renters could face eviction, according to the Atlas Institute. Another 5.7 million renters are behind on rent, the U.S. Census Bureau suggests.

“This Legislature watched as the median price of a home went up by $100,000 in the last year and it didn’t do a damned thing about it,” said council member Jordan Hess. “This Legislature watched while rents increased by double-digit percentages in Missoula and other parts of the state and this Legislature didn’t do a damned thing about that. It’s shameful. We’re in an untenable situation because this Legislature didn’t do a damned thing about housing.”

The frustrations go beyond a few members of the public and the Missoula City Council. Missoula County has voiced its own frustrations, as has Engen.

Engen on Monday said he planned to convene a summit with area property managers and landlords to explore new collaborations and to “better understand why some property owners make the choices they’re making.”

Deploying funding from the American Rescue Plan may also be on the table, though that will depend upon the sideboards issued by the U.S. Department of Treasury.

“We’ll see if we can make a change and help alter that decision or expand that space so economic evictions don’t occur,” Engen said. “But that’s a matter of subsidy. If we have the resources and we’re allowed through Treasury guidelines to deploy some ARPA money to temper that, I like it a lot and think it’s worth pursuing.”

While some members of the council accused area landlords of “squeezing the market” and taking advantage of Missoula’s low vacancy rate, others urged those who are frustrated with the housing dilemma to take their concerns to Helena and share them with those “who can make the changes.”

“People who have these stories need to share them in spaces with people who can affect their lives for the better,” said council member Heidi West. “We are aware and we feel equally powerless to do anything about it. The things we can do must be creative and within the limits of the things we’re allowed to do.”