Report: Missoula's low-income earners squeezed by high rental prices

Aug 22, 2018

Missoulian A worker earning minimum wage in Missoula County would have to work 81 hours every week to afford a two-bedroom apartment at fair-market rent without severely straining a household budget, according to a new report.
The nonprofit Montana Budget and Policy Center recently compiled data on housing affordability in Montana and presented it in an interactive map on its website.
The information it put together, which comes largely from the U.S. Census Bureau and the American Community Survey, shows that approximately 93 percent of low-income families in Missoula County spend more than 30 percent of their paychecks on rent. That leaves them less for health care, savings, education, clothing and emergencies.
“Affordability is a major obstacle to housing security and quality of life, and a growing number of Montanans are paying levels of rent that severely strain the household budget,” said Heather O’Loughlin, co-director of the MBPC. “This tool presents a snapshot of housing needs across the state and will help community members, advocates, and policymakers advance policy solutions that ensure every Montanan has a home.”
The average fair-market rent for a two-bedroom home in Missoula County is $855 per month compared to the Montana average of $775, according to the National Low Income Housing Coalition.
Meanwhile, the monthly rent that a low-income family making under $20,000 a year can afford without spending more than 30 percent of their income is $534 per month. The generally accepted national standard for being “housing cost burdened” is spending more than 30 percent of a paycheck on housing costs.
Only about 6 percent of the total available rentals in the county are considered affordable for households living below the federal poverty level.
The percentage of renter households in Missoula County, with annual incomes below $20,000, is 35.6 percent compared to the statewide average of 32.5 percent.
Missoula is slowly making inroads on increasing the amount of affordable housing available to low-income renters, who often don’t have the necessary savings for a 20 percent down payment to qualify for a mortgage.
The largest affordable housing project in state history is being planned for Missoula’s Northside neighborhood. The 200-unit complex, being built by the Missoula Housing Authority and other partners, would be reserved for people making at or below 50 percent and 60 percent of the Area Median Income of $70,400 for four people, $63,400 for three people and $56,400 for two people. Certain aspects of the project were given the green light by the Missoula City Council this summer.
Eran Pehan, the director of the City of Missoula's Office of Housing and Community Development, told the City Council in a recent memo that Missoula has a "significant shortage" of rental housing available to Missoulians making below 60 percent of the area median income.
"This project highlights the impact of public–private partnerships," she said. "At completion the (housing project) will have leveraged an estimated $38 million dollars in private funds and will be the largest Low Income Housing Tax Credit project developed in the state. At 200 units this project will create more permanently affordable housing units in one year than the Missoula community has in the last decade."
Missoula’s housing prices went up about 30 percent between 2010 and 2017, while wage increases stagnated, according to the Missoula Organization of Realtors.
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.