Missoula City Council pushes “housing as a human right,” tax bond still on the table

Advocates of affordable housing urged members of the City Council on Monday night to change city zoning, to direct more revenue from the general fund toward low-income housing, and create a committee to oversee the committee charged with making future housing recommendations.

The City Council considered most of it during another listening session on the issue. The council also left a proposed tax on existing property owners as a possible source of revenue that could be used to feed the affordable housing trust fund.

“The funding options that are described in the ordinance, the way I understand it, are defined as broadly as statutorily possible, which will allow us the maximum flexibility and innovation, and allow us as a community to address future needs and unknowns,” said council member Heidi West, who pushed two weeks ago for the inclusion of a tax bond as possible funding source.

Monday's session didn't come with a decision, though all council members who spoke supported the housing trust fund as proposed.

West and others pressed to ensure housing was identified “as a human right” in the ordinance, which is now written into the proposal. While they also sought to ensure “flexibility for the future” in terms of funding, several pushed to ensure future decision makers can't undue the proposed ordinance at a later date, and regardless of public sentiment.

“We are uniquely situated right now between our current administration, council and community buy-in around a shared vision and priorities around housing,” West said. “It's super important to me that a future mayor or a future council can't just gut what we are setting up right now.”

The proposal looks to establish a fund of $10 million within five years with contributions coming from tax increment financing, the city’s general fund and a litany of other revenue sources.

While a tax bond wasn't noted as a possible inclusion three weeks ago – prompting questions by West as to why – it appeared on the list of funding sources presented on Monday night.

“We'd love to see the resolution acknowledge that housing is a human right and to see council consider increasing the amount that's contributed from the general fund to reach that $10 million goal,” said Andrea Davis, executive director of Homeword. “There's a lot of sources that have been identified to reach that $10 million goal.”

The city adopted its larger housing policy last year and staff has been working for months on the framework of the proposed trust fund. More than 115 cities across the country have established some form of a housing trust in 33 states.

Revenues held in those funds exceeded $1 billion in 2018. The amount of private and public funds leveraged for every $1 invested into such an account averaged $6 to $14.

It's unknown how those investments impacted the local property tax base, as several recent subsidized housing projects in Missoula are or will be tax exempt.

“This is an important building block to the rest of the city's housing policy,” said Montana James of the Office of Housing and Community Development. “It plays a roll in nearly all program activities currently being explored.”

As proposed, the fund could be used to cover the cost of land or infrastructure, helping bring down the cost of the end product. It could also be used to provide gap financing or loan guarantees, or cover development and permitting fees.

To grow the fund, the policy recommends directing no less than $100,000 each year from the city’s general fund into the trust fund account, though some pushed to increase that amount to $500,000. It also would direct the Missoula Redevelopment Agency to create a $1 million line item for tax increment financing to feed the fund.

Mayor John Engen, who established the housing office and began the conversation around affordable housing three years ago, said the issue was “top of mind.”

“Our housing policy was a slog, and a necessary slog,” he said. “This notion that housing is a human right is something I took to heart. I believe it, and I think most of you believe it, and I think that item will manifest when we consider this next week.”