To continue the discussion of the CFED 2016 Assets and Opportunities Scorecard, one of our partners, NeighborWorks Montana, has provided a deeper analysis on the housing and homeownership data.
A quick look at the CFED’s Assets and Opportunities Scorecard, and you will find that Montana ranks best in outcome and policy measures related to Housing and Homeownership.
It’s true that Montana has fared far better than many states across the nation in the rates of foreclosures, and overall, Montana ranks high for the number of 2-parent households who own their own home. We can applaud the legislature for enacting laws to protect homeowners from foreclosure, and entities like NeighborWorks have worked hand-in-hand with government to provide foreclosure assistance and first-time homebuyer education programs.
With that said, when we begin to examine housing affordability, the numbers tell a different story. Many homeowners and renters in Montana are struggling with high mortgages, rents, and utilities.
Among homeowners, almost one in three reported spending at least 30 percent of their household income on mortgage costs alone. And almost half of all renters in the state reported spending the same amount on rent and utilities. When housing and rental costs exceed 30% of a household’s income, it dramatically impacts their ability to afford critical necessities like food, transportation, healthcare and investment in savings.
Families continue to struggle to afford housing because most workers’ wages are not commensurate with Montana’s housing costs. The current median housing value in Montana is over 4 times the amount that a typical worker earns annually. While high home values are good for those who already own a home, exorbitant costs leave many unable to buy a house or begin to build equity in their home. And with the number of low-wage jobs in the state, there are simply not enough opportunities for workers to earn enough to purchase a home and keep their families financially stable.
We can do better to support working-class families. Even in the face of low-wages, there are options that help low-and-moderate income families find housing.
On Monday, the Montana Board of Housing announced this year’s awardees for Low-Income Housing Tax Credits. Out of 19 eligible projects, 8 were funded, leaving 11 projects on the table. All of these projects are well thought out and would fill critical housing needs in their communities. Most states have some state designated pool of funding specifically to support the preservation and development of affordable housing. Our state does not, and it is a clear gap in resources that should be filled.
Another area our state should look to improve is the way we approach titling of manufactured housing as real property. Manufactured housing is a significant source of affordable housing in our state, and allowing this housing to be titled as real property creates opportunities for better financing and a more valuable asset for these homeowners. Although Montana allows titling as real property, the system is inefficient and difficult to navigate. Montana should streamline our titling process and look to the recently developed Uniform Manufactured Housing Act as a model to emulate.
The CFED report points to these and other good housing policies across the country that may be relevant for our state. We encourage policy makers to review these options, and look to the Montana Coalition for Housing and Infrastructure to identify and advocate for smart housing policy initiatives in the next legislative session.
Kaia Peterson is the Assistant Director of Statewide Operations at NeighborWorks Montana. NeighborWorks Montana’s mission is to “create opportunities for families and individuals to live in affordable homes in strong communities” throughout the state.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.