Bond for Missoula workforce housing project wins initial approval

Martin Kidston

(Missoula Current) A bond needed to cover infrastructure costs in a workforce housing project won initial approval from members of the Missoula City Council on Wednesday, clearing one of the last remaining hurdles.

The $9.8 million bond will help subsidize the cost of the housing project and fund area infrastructure, including streets and utilities. Construction on the project, located off Scott Street, began earlier this year and represents a public-private venture.

“It's a significant project in Missoula, and this is a significant bond amount,” said council member Gwen Jones. “But there aren't any other tools to create affordable housing. This council got the memo long ago that affordable housing is a priority.”

The Montana Legislature recently added workforce housing to the definition of infrastructure. It enabled the Missoula Redevelopment Agency to direct tax increment financing toward qualifying projects.

The Scott Street project is said to be the first workforce housing in Montana to advance under the new legislation. Bond approval passed the city's Housing and Redevelopment Committee on a 10-1 vote.

“It's a great example of something we can replicate here in Missoula and other municipalities,” said council member Daniel Carlino. “It's a good place for us to put our tax money, toward affordable housing. I think it should be an even bigger budget priority for the city in the future.”

The entire development, advanced by Ravara LLC, covers roughly 9 acres owned by the city. As planned, the project will set 3 acres aside in a community land trust and offer 46 income-restricted workforce homes for sale, along with 43 market-rate homes.

The remaining six acres will include roughly 225 market-rate rental units, along with childcare and commercial amenities. The bond approved on Wednesday applies $5.7 million to cover infrastructure costs and $3.2 million to cover the construction gap in the workforce housing units.

Current modeling suggests the workforce housing units will market between $170,000 and $250,000, the city's housing policy specialist has said. The median price of a market-rate home in Missoula stands at roughly $557,000 – a figure that includes condos and townhomes.

“I think this project is going to be a great experiment to how this process will work in how we can have a semi public-private partnership in place and using the tools available to MRA to do something like this,” said council member Bob Campbell. “I'm anxious to see how it all shakes out as these units are developed.”

But not all voiced support for the bond. Repaying the debt will cost around $18 million over time when interest is figured in.

“That's a lot of money we're paying in interest. I'm really uncomfortable in putting that much money toward interest," said council member Sandra Vasecka, who cast Wednesday's dissenting vote. “It seems like we can't afford this project. Taking the bonds out and doubling the project cost with interest, I'm really uncomfortable with it.”