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Missoula council passes, praises housing trust fund; some warn new tax to subsidize housing

While some challenged a proposed trust fund for subsidized and affordable housing as a hidden tax on property owners that will drive up housing costs across Missoula, the City Council on Monday passed the fund’s creation on a 9-2 vote with one member absent.

The concerns of some callers fearing higher property taxes were not addressed, though the council took time to appease callers who supported the measure by addressing concerns and making changes to legislation.

The trust fund was included in the city’s recently passed housing policy as a way to pay for affordable and subsidized housing in the city. It looks to tap a number of funding sources to build a funding pool to boost the development of housing paid for by property taxes and private sources willing to work under city expectations.

“The options to funding housing is limited, complicated and outside local control. Most of our funding comes from the federal government (taxes),” said council member Heidi West.

“There isn’t any subsidy with the exception of (Missoula Redevelopment Agency) funds we have currently in our control. This is a foundational step to help make those federal dollars go further, but also help us achieve the goals in the housing policy to which no federal subsidy exists.”

Backers of the measure on the City Council called those who didn’t understand the measure’s need as “ignorant,” saying the time had come to balance the scale. They also included a fail safe intended to withstand a change in public opinion, saying it shouldn’t be reversed by future administrations or the Democratic vote.

City and county government are both controlled or supported by Democrats. Some contend that could change in the future as the public becomes more weary of rising property taxes and subsidies.

West over the past few months has worked to ensure the ordinance stands the test of time. She took the lead in crafting the measure in its final form.

“I have faith that both of these documents will be a good starting point to carry Missoula into the future while being a solid basis to fall back on should future administrations, councils or committees try to undue the housing trust fund,” West said. “Our citizens deserve better than to have their housing security be a bargaining chip or a hot topic issue punted around, ignorant of the lives that are actually at stake.”

The trust fund was included on a newly added “final consideration,” something that didn’t exist last week. The affordable housing trust fund received more than 90 minutes of discussion while issues pertaining to increases in water fees, sewer fees, hydrant tapping fees and billing changes were glossed over in less than 15 minutes.

Advocates of the trust fund described a racist system. They called for cuts to police funding and reparations to certain minority groups. They also called for the appointment of those who receive housing assistance to an oversight committee charged with helping manage the fund.

City housing officials said income discrimination is an ongoing issue in Missoula.

“It’s good to know that when projects receive funding from the affordable housing trust fund, that there will be a contract in place whether that’s a grant or a loan,” said Eran Pehan, director of the Office of Housing and Community Development. “Through that contract, we can stipulate our expectation of the developer or operation of that housing. We can call out income discrimination.”

While most City Council members praised the trust fund and took several rounds to laud it, not all were in support of the measure. Council member Sandra Vasecka voted in opposition, saying it constituted another tax increase on property owners to subsidized housing.

“Many renters are struggling to make rent. Many landlords are struggling to make their mortgage payments,” she said. “This subsidized housing will only increase property taxes, which will increase rent, which will increase more folks using subsidized housing.”

Several callers agreed.

“Can someone explain the basic economics of how increasing expenses for landlords in the form of increases in property taxes leads to a decrease in rental prices,” one caller said. “Being a landlord or property owner isn’t a charity service. If expenses go up, prices go up. It’s not complicated. It’s basic economics.”

Like the City Council, most of those who called in, including members of Missoula for the Common Good – a special interest group that has lobbied for the measure’s passing – called the trust fund necessary, regardless of its cost to property owners and their taxes.

In “a perfect and just world,” the measure wouldn’t be necessary, they said.

“We have some thank yous to give out for what seems to be general support and interest in increasing funding committed by the city to the housing trust fund,” one caller said. “Broad parameters of the fund cannot exclude any funding mechanism.”

One of those mechanisms could include a future general obligation bond.