House Bill 397 Would Increase the Supply of Housing Montanans Can Afford

Apr 06, 2021

The Senate Taxation Committee will take executive action this Friday on HB 397, the Montana Workforce Housing Tax Credit. Montana’s workforce housing shortage is one of the most critical issues impacting urban and rural areas across the state. Rent in Montana has grown 62 percent faster than the national average, and 668 percent of Montana renters living on very low incomes pay more than half of their income for housing. This system is simply unsustainable. This program is a much-needed tool to increase Montana’s housing supply as part of the state’s post-COVID come-back plan.

HB 397 incentivizes developers to build more homes for working families. The Montana Workforce Housing Tax Credit is a companion program to the federal Low-Income Housing Tax Credit (LIHTC) and, when paired together, would double the use of these federal funds. About 20 states have state-based housing tax credit programs to address their workforce housing issues. For example, after Colorado renewed its state housing tax credit in 2015, the program helped double the number of new and renovated homes affordable to working families, created 19,000 jobs, and generated $1.5 billion in total economic benefit. Montana’s state housing tax credit looks to deliver similar results in the number of homes created, as well as the financial and economic benefits generated by tax credit supported housing projects.  

HB 397 would create:

Everyone deserves a home, but homes are also critical to ensuring a stable and productive workforce. Our state continues to suffer the social and economic consequences when people cannot find affordable and quality housing in the communities where they work. Our legislature must act urgently to address this problem by passing the Montana Workforce Housing Tax Credit program.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

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.