In a full-page ad placed in the May 13 edition of Helena’s Independent Record, the Helena branch of Habitat for Humanity pressed Gov. Greg Gianforte, along with other state and local officials, for specific action to address what it calls Montana’s housing “crisis.”
The nonprofit, which says it is scaling up efforts to build more homes in Helena, said several steps are necessary to help it and other entities address the crunch. Among them: putting state and local tax dollars toward housing subsidies, ensuring that construction regulations encourage dense urban development, and expanding the use of community land trusts.
The advertisement also references a May 6 Montana Free Press story that explores how Gianforte’s signature Come Home Montana campaign, a marketing effort encouraging former Montana residents to return to the state, has run headlong into widespread public frustration over rising housing prices.
“Helena Area Habitat for Humanity agrees with the sentiment of the campaign: the push to make Montana a place where people can live and work and thrive,” the ad reads. “But Montana has quickly become inaccessible to those who currently live and work here, let alone those seeking to ‘come home.’”
“Housing is too expensive and there isn’t enough,” the ad continues.
The governor’s office acknowledged Monday that the state is facing a housing crunch.
“Like parents and grandparents across Montana, the governor encourages Montanans who’ve moved away to come home,” Press Secretary Brooke Stroyke said in an email. “The governor also recognizes that, with Montana’s population growth far outpacing new home development in Montana, demand for housing in our state has outstripped supply.”
Helena Habitat Executive Director Jacob Kuntz said in an interview Monday that the nonprofit, which has historically focused on building affordable houses a few at a time, has seen the region’s housing market tip in the last two years and concluded it needs to take a more vigorous approach to housing advocacy.
Before 2020, Kuntz said, a school teacher, police officer or state employee could find a place to buy in Helena without paying more than 30% of their income, the threshold generally considered “affordable” by mortgage lenders and housing experts.
But as remote work and pandemic-era migration bring more people to town, leaving too few homes to go around, that’s changed. Helena-area home prices are up 66% in the past five years. Rents have risen dramatically, too. A national database cited by the Washington Post last month, which includes only multi-family rentals, indicated rents in Helena’s Lewis and Clark County were up by 36.5% since 2019. That’s the 5th-largest percentage increase in the nation for counties with at least 1,000 multifamily rentals.
Habitat’s advertisement says the average home price in Helena as of this month is $462,000. Affording a “basic home” in the city, it said, now requires an annual household income of $124,000 a year — making ownership a stretch at best for a family with two adults working $50,000-a-year jobs.
The Department of Commerce has spent $700,000 trying to encourage Montana college grads to return to the state as part of its “Come Home Montana” campaign. Some recipients interviewed by MTFP reported that the outreach sparked feelings of fondness for their former home, but others wondered where they would live amid Montana’s surging popularity and…
“What made Montana great and Helena fantastic was that it was a place that was great to live and people could afford to live here. Now it’s out of reach,” Kuntz said.
Compounding the challenge, Kuntz said, are the land, material and labor costs of building new homes. Even Habitat, which relies on labor from volunteers and the families who will own its homes, is finding itself unable to build new construction cheaply. The three-bedroom, two-bath homes Habitat is building in Helena are currently costing $235,000 in land and material expenses alone, according to Kuntz.
“You can’t build housing that people can afford without some sort of subsidy anymore,” he said.
Among the many cruxes of the housing crunch is that money for housing subsidies has to come from somewhere: philanthropic largesse, for example, or federal, state or local tax dollars.
Gianforte, a Republican, has in the past resisted calls to supplement the state’s current housing programs, which are largely funded by federal dollars, with support from the state General Fund. Last year, he vetoed a bipartisan bill that would have obligated the state to spend at least $45 million on workforce housing tax credits in an effort to match federal funds.
In a memo explaining his veto, Gianforte cited existing federal spending on housing. “I believe the most effective way to address housing affordability challenges in our growing state is to reduce the panoply of regulations faced by housing development,” he wrote.
Stroyke said this week that the governor is focused on adding to Montana’s housing stock by “cutting red tape, streamlining permitting, improving private-public partnerships, and boosting trades education to grow Montana’s construction workforce.”
She didn’t provide a direct response to a question about whether Gianforte supports putting state dollars toward housing efforts, as Habitat requests. She did note that the governor has lobbied the administration of President Joe Biden for greater flexibility on using federal housing money given to the state under the American Rescue Plan Act. (When that act was passed by the Democrat-controlled U.S. Congress last year, Gianforte criticized it as a “Fiscally irresponsible progressive wish list”.)
One place federal money could, in theory, help with Montana’s housing crunch is by building out the costly water and sewer lines necessary to support new urban-density housing developments. In the past, Kuntz said, cities have generally required developers to pay for the lines necessary to serve new developments. However, that’s become in many cases prohibitively expensive, which in turn drives up the cost of construction-ready home lots.
Montana has allocated $462 million in American Rescue Plan Act money toward water and sewer project grants, but Stroyke said current federal regulations require states to direct that money toward improving existing infrastructure — not building out new lines.
Kuntz also suggested land trusts as a way to control the cost of land to build on. When Habitat builds homes currently, he said, the structure is sold to the new homeowner but the land remains under the ownership of a trust. If the homeowner later sells the property, there’s a mechanism in place to cap how much equity they’ve earned. That gives the next buyer a chance to purchase the home at a reasonable price instead of giving the initial owner a windfall by letting them sell their previously subsidized home at market rate.
Approaches like that, Kuntz said, make it possible to build up a stock of homes that are insulated from the broader market’s rising prices over time.
“It’s a permanent investment in the community,” he said.
Kuntz also noted that increasing neighborhood housing density can help control the land part of the equation by making it possible to fit more homes on the same amount of property.
Helena Area Habitat for Humanity paid $1,000 for the full-page ad, which ran in a Friday paper, Kuntz said. The intent, he added, wasn’t so much to call out the governor as to agree with the “come home” sentiment while noting that housing is an issue that needs to be addressed to support the campaign’s success.
“We think this is the path forward to make Helena a place everyone can come home,” Kuntz said.
Disclosure: Reporter Eric Dietrich has twice volunteered time to help with Helena Area Habitat for Humanity projects, most recently spending a Saturday morning caulking electrical outlets at an in-progress Habitat build in October 2021.
This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Discuss MTFP’s Long Streets work with Lead Reporter Eric Dietrich at firstname.lastname@example.org.
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