With days to go in the 2023 session of the Montana Legislature, a months-long debate over how to put a portion of the state’s $2.5 billion budget surplus toward housing affordability efforts has converged on a single compromise measure.
As presented to the Senate Finance and Claims Committee Monday, the new package would put $175 million of state General Fund money toward housing programs and also authorize using $50 million from the state coal trust to provide loans to help developers build rent-restricted apartments.
The package, amended into House Bill 819 in the Senate Business and Labor Committee last week, won support in Monday’s finance hearing from business groups, affordable housing developers, organized labor, and Gov. Greg Gianforte’s budget office. As of Tuesday afternoon, however, it still needed approval by the Senate finance committee, as well as votes on the Senate and House floors.
In a press briefing Tuesday, Senate Majority Leader Steve Fitzpatrick, R-Great Falls, called the amended bill the “the best solution left of all the bills that are still alive” for housing funding.
“It’s designed to be a compromise bill,” Fitzpatrick said. “Hopefully we get that one over the finish line.” Even so, he added, the bill could face difficulties, particularly in the House.
“There’s no way I can say right here that thing’s greased and it’s going through. Not at all,” he said.
Senate Minority Leader Pat Flowers, D-Belgrade, said in a separate press briefing Tuesday that there are things he does and doesn’t like about the compromise bill.
“It is a comprehensive solution,” Flowers said. “And when we’re out of here in the next 10 days, we have to have something comprehensive or we’ve failed.”
Addressing the widespread pain caused by the state’s housing affordability crunch has been an explicit priority for the governor and many lawmakers this year. According to real estate website Zillow, Montana’s typical home value was nearly $428,000 as of March, up from $267,000 at the beginning of 2020. Rents have also risen enough in many communities that employers report having an increasingly hard time hiring employees.
Several measures that aim to loosen housing markets by reining in development restrictions in an effort to boost construction are heading toward the governor’s desk, where he’s expected to sign them. Even with lawmakers sitting on an estimated $2.5 billion surplus, though, committing to direct spending on housing efforts has proven to be a harder sell in the Legislature, where Republicans control about two-thirds of seats.
Sponsored by Rep. Paul Green, R-Hardin, HB 819 had previously contained $50 million for a program that would provide mortgage assistance to aspiring homeowners. As amended, it now also contains versions of two other major housing spending bills. First is Gianforte’s HOMES Act, which aimed to bolster the state’s housing supply by putting money into infrastructure before it was voted down in the House April 3. The second is a bipartisan proposal advanced by Republican Speaker of the House Matt Regier, R-Kalispell, and Democratic House Minority Leader Kim Abbott, D-Helena, that would stash money in the state coal trust to support the construction of rent-restricted housing. That, House Bill 927, is also pending in the Senate finance committee.
The housing infrastructure and coal trust housing proposals bundled into the compromise bill are smaller than the standalone proposals. The governor had sought $200 million for his infrastructure proposal, an amount now reduced to $106 million in the compromise bill. The Regier-Abbott bill passed the House with a provision that would have stashed $115 million of the surplus in the coal trust for housing loans. The current compromise bill doesn’t put any new money in the trust, instead authorizing the Montana Board of Housing to make affordable housing project loans with an extra $50 million of its existing contents, which are currently invested in other ways.
The $56 million mortgage assistance program would distribute the money to a mortgage assistance program administered by regional “community reinvestment organizations.” Homes purchased through the program would be deed-restricted, meaning participating homebuyers would have to pay the program back if they eventually sell at a profit, letting the funds be reused.
The infrastructure portion of the proposal would make low-interest loans to help build water lines, sewer lines, streets, sidewalks and other physical assets necessary to serve new urban housing development. Those loans would be made available to local governments and private developers through the Montana Board of Investments. To qualify, projects would have to build at a density of at least 10 units per acre and would need to produce deed-restricted units.
The coal trust portion of the bill would make $50 million more available for loans through the state’s existing Multifamily Coal Trust Homes program, which was created in 2019 by a bill sponsored by Rep. Dave Fern, D-Whitefish. Those loans would be used to help finance housing projects that add housing affordable for low-income residents, including mobile home parks.
The compromise bill also includes a $1 million allocation for administrative work on housing through the Montana Department of Commerce and a provision that would put $12 million toward funding housing opportunities for state employees who work at major rural institutions such as the Montana State Prison in Deer Lodge and Montana State Hospital in Warm Springs.
As lawmakers try to carry the measure across its remaining procedural hurdles, it could still be amended. It’s by no means guaranteed the package won’t end up bogged down in late-session politics, particularly after conflict over Regier’s decision to prevent a transgender Democratic lawmaker from speaking on the House floor inflamed partisan tensions this week.
Before the bill can go to the governor for his signature, the House and Senate must pass identical versions of the bill. The session is scheduled to end no later than Friday, May 5.
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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