MISSOULA - With a change in state law regarding workforce housing, the Missoula Redevelopment Agency plans to convene a working group with a number of stakeholders to determine how it may apply tax increment financing to certain projects.
The term workforce housing may mean different things to different groups, and cities across the state are wrestling with how to define it. But if MRA can ramp up a new program around such housing using tax increment as a catapult, it could help spark a new tool for development.
“In the last legislative session, there was a change made to the definition of infrastructure in the urban renewal section of the statute,” said Annie Gorski, deputy director of MRA. “We've been working since spring to understand a couple of things.”
Among the questions, Gorski said MRA is exploring how other cities around the state that utilize urban renewal districts are addressing the redefinition of workforce housing as a form of infrastructure.
At the same time, MRA has met with the city's housing office, lenders, developers and other stakeholders to understand what needs are out there, and how a new program could respond while adhering to state law.
“If we were to develop a policy and program options, specifically a new grant program where we could invest directly in workforce housing, what would be most beneficial?” Gorski said. “What programs are simple to administer and flexible, knowing the needs of a small project may be different than a large project, and that for-rent and for-sale projects will need a tool that can be flexible for both types of projects.”
MRA has long invested in both affordable and market-rate housing. While that investment doesn't go directly into the development of housing, it can be used to fund the infrastructure needed for the development to take place.
Most recently, that has included road and infrastructure work in the Scott Street district where several housing projects are underway. That direct investment in infrastructure, including utilities, can help lower the cost to the developer, with the savings being passed on to the end user.
But the change in state law could enable MRA to invest directly into housing if it's viewed the same as infrastructure.
“If it is a new grant program, it would be a set of guidelines for that grant program if they're different than the infrastructure program we have now,” Gorski said. “We've got some ideas and concepts.”
The state of Montana is working on housing issues as well, but Missoula may be ahead of the game given MRA's investment in housing-related infrastructure and the city's standing housing policy. The latter was created by former Mayor John Engen several years ago and offers a range of goals that have made their way into city operations and budgeting.
“I think this will be something that will go to the City Council as policy, and we'd carry it out,” MRA Director Ellen Buchanan said of any future policy recommendations. “But we need to really vet this internally. We see the entire picture of the tax increment revenues that are available. That has to be at the forefront of any new policy.”
Pending approval from city leadership, MRA plans to create a working group to form any proposed recommendations. The group will likely consist of bond counsel, stakeholders, developers, housing experts and a member of the City Council.
“There's a lot of layers here, and a lot of definitions floating around, depending on what entity you're talking to,” Buchanan said of the new statute. “We need the cooperation of the mayor and president of the City Council. We'll run the idea by them and see if a working group is something they want to do, or if they'd rather have us take it on as a board.”