On September 12, the Montana Association of Planners convened its annual conference, inviting land use planners, local officials, and nonprofit professionals to discuss how Montana towns and cities can effectively manage growth and invest in their communities’ future.
Montana Budget and Policy Center was invited to present on the housing affordability crisis facing Montanans who struggle to pay increasingly unaffordable rents, and how an inadequate supply of affordable housing has become a barrier to economic growth. MBPC also demonstrated its interactive Affordable Housing Map, describing how this resource can help people understand the scope of housing needs in each of Montana’s 56 counties.
MBPC explained that securing affordable and safe rental housing is increasingly out of reach for lower-income, working families. Housing costs have outpaced wage growth for years and the cost of rent in Montana is now the 11th fastest growing in the nation, forcing more Montanans to pay a greater share of their monthly income on housing than ever before. Today, over half of households living in poverty are considered “severely cost burdened”- paying 50 percent or more of their monthly income on rent. A worker earning minimum wage would need to work 78 hours a week in order to afford to rent a 2-bedroom in Montana’s private rental market.
Another driver of the housing crisis is there are too few rental homes available and affordable to lower-income households. Montana would need to add 16,467 more units to its housing stock to make up for this shortfall in supply. Despite the high demand, the costs of building and maintaining housing with lower than market rate rents is often impossible without the help of government subsidies. The federal Low-Income Housing Tax Credit program is the single largest funding source for the construction and preservation of affordable housing and this program is responsible for nearly all Montana’s existing affordable housing stock. However, there are twice as many applications for these credits than what is available and, as a result, much needed housing projects are not built due to lack of funding.
The audience at the Montana Association of Planners then heard from panelists Sheila Rice, Chair of the Montana Housing Coalition, and Heather McMilin, Housing Development Director at Homeword. They described three legislative proposals spearheaded by the Montana Housing Coalition that would provide state funding for affordable housing projects, and will be up for consideration during the 2019 legislative session. Heather McMilin went into detail discussing one proposal to create a Workforce Housing Tax Credit program, modeled on the federal Low-Income Housing Tax Credit program, which would provide much needed financing to double the production of affordable housing in the state.
Montana’s affordable housing crisis demands a strong response with an eye toward long-term solutions by our state and local governments. We recognize that the social and economic costs of not investing in housing will be far more expensive than the cost of providing adequate resources to meet the pressing housing needs in our communities today.
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.