Public Investment & the Housing Task Force

Oct 24, 2022

On October 19, the housing task force convened by the governor formally passed its final report proposing 18 recommendations to address Montana’s housing crisis for consideration during the upcoming legislative session. While the proposed regulatory reforms that could make building housing easier offer positive solutions for many communities, it will take more than regulatory change to overcome the housing shortage. To make progress on the great need for affordable housing in the state, Montana must invest state dollars and make capital available to build up the supply of homes that are affordable to all Montanans.

Many of the task force’s recommendations take aim at local zoning restrictions such as minimum lot sizes and building height limits. These proposals make it easier to build more dense housing developments and are intended to make housing construction easier and less expensive. Efforts to do away with zoning practices that can stymie housing development are a good move forward for certain communities. In fact, many localities are already enacting zoning reforms. However, solutions to lower housing costs and spur more home building, especially for residents living on low incomes, cannot be achieved without public investment.

To this end, the housing task force recommends putting more money into existing affordable housing programs, such as the Housing Montana Fund which was created in 1999 but has gone without a consistent funding commitment. Montana should consider using its budget surplus to fund this program to build more homes for Montanans whose affordable housing needs are not being met through the market rate sector.

Another important idea is to create a State Affordable Housing Tax Credit program. A state housing tax credit would provide a critical source of financing necessary to develop rental homes affordable to residents living on low incomes. Without housing investments, it is not financially possible to construct and maintain homes that provide below-market rents for Montanans who are elderly living on social security, with disabilities, or working in low-wage occupations. As it stands, Montana relies on federal housing tax credits to fund affordable housing development for Montanans living near poverty and those credits do not stretch nearly far enough as they are not only funding new construction, but also preservation of existing affordable homes that could be at risk of being sold and converted to market rate rents. On Monday, the Montana Board of Housing awarded its annual allotment of federal housing tax credits to just over a third of the thirteen projects submitting a letter of interest to apply for this highly sought-after source of capital.  All of these housing projects are worthy and needed in communities. Without a state housing tax credit, Montana only has the funds to support a fraction.

As Montana moves towards the 2023 legislative session, the housing crisis is front of mind. Montana remains one of just a handful of states that doesn’t have state funded investment programs to support the development and maintenance of homes Montanans of all incomes can afford. We need our Governor and policymakers to acknowledge the reality that public investment is just as critical to solving Montana’s housing crunch as taking regulatory changes.

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.