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Missoula officials see promise, challenges in affordable housing

Affordable Housing Missoula
Posted at 9:29 AM, May 01, 2023

MISSOULA - As city and county officials explore ways to create more shelter space for the homeless and search for the funding to pay for it, they're also looking to increase Missoula's stock of affordable housing.

Missoula's shelter system is too limited to house the city's growing number of homeless individuals. So too is the city's housing supply limited, including units that are deemed affordable.

“We know the only solution to homelessness is a home. That remains our primary focus,” said Eran Pehan. “We have good things to report with Trinity and Villagio leasing up right now. We're continuing to build that pipeline so we can provide more homes in our community.”

Pehan, director of the city's Office of Community Planning, Development and Innovation, joined city and county officials last week in warning that funding available to shelter the homeless is limited. Without a new revenue stream, many programs and services they feel are valued by the public will vanish.

The issue was amplified in part by last year's failed levy, which would have provided up to $5 million annually for local crisis services. Inflation also has added costs to basic necessities while Medicaid changes at the state level will rob thousands of Montanans of critical medical coverage.

While the stars are aligning against Missoula's years-long effort to address homelessness, news on the housing front isn't all bad. Both the Trinity and Villagio projects — both years in the making at a cost of more than $40 million — are now leasing tenants.

“There are 30 apartments and homes in Trinity that are dedicated to those who have been living on the street for many years,” Pehan said. “We've never seen a project at that scale before. We need more affordable homes, period. But we also need more affordable homes dedicated to people living on the streets for many years. Those two things in combination make Trinity particularly powerful. We need to do that again and again at scale.

The Trinity and Villagio projects together include around 400 homes. It represents more progress on the affordable housing front than Missoula has made over the past 10 years combined.

But Pehan still described it as a “drop in the bucket.” Such projects need to line up and open year after year.

“We know we're somewhere near 2,500 affordable homes short in our community,” she said. “We need to continue working at that aggressive of a pace.”

When it comes to funding and building more affordable housing, the city has a revenue source waiting in the wings. In recent years, it has purchased and banked land at strategic locations around Missoula and once the properties sell, they could generate several million dollars.

One of those properties — the old Sleepy Inn — is now on the market for $850,000 and could sell this year. Revenue from the sale will feed the Affordable Housing Trust Fund.

“When that sells, we'll be able to select a buyer, based on their intentions with the property, and those proceeds from the sale will go to the Affordable Housing Trust Fund by city ordinance,” said Missoula Mayor Jordan Hess.

Other city properties include several acres off Johnson Street where the winter shelter has operated over the last two years. It also owns more than 20 acres off Scott Street. Nine of those acres have been sold to a private developer that plans to construct 75 deed-restricted condos and townhomes, along with several hundred apartments.

The city also owns the old library block downtown. The Missoula Economic Partnership is currently soliciting proposals from developers.

“When that gets redeveloped, the proceeds from that sale will go to the Affordable Housing Trust fund,” Hess said. “It's all medium term and it's not tomorrow, but the mechanism of the Affordable Housing Trust Fund and that creative use of city land is part of the mix.”

The housing challenges facing Missoula, including the rising cost of what's currently available, remains an issue that's facing much of the West and nearly all of Montana.

Gov. Greg Gianforte convened a housing task force earlier this year to explore ways to bring down costs, and the Legislature is expected to deliver several bills that could help address the issue.

At the federal level, Sen. Jon Tester is doing the same. Last week, he pressed national housing experts on solutions to what his office described as “the affordable housing crisis in rural America.”

“Everywhere I go in Montana, I hear about the lack of affordable housing,” Tester said. “It’s killing rural America, and it’s driving folks out of the communities they’ve lived in their whole lives. Too often, one-size-fits-all policies from Washington don’t work for Montana, and that’s why it’s critical we work with folks on the ground on solutions that actually work to increase affordable housing supply in our rural communities.”