Housing initiatives target Great Falls developers, homebuyers

GREAT FALLS — A housing study commissioned by the Great Falls Development Authority estimates a demand for 630 new houses, apartments or other housing units in the city each year over the next decade. And while building projects are underway, the study predicts they won’t be enough to meet that demand.

That need grew since the previous study, conducted in 2021. Modest increases in population and household income in recent years, coupled with anticipated in-migration from the Sentinel missile program and other factors, drove up the demand.

“And so now, having some growth, experiencing what the West and Montana and central Montana are experiencing together, we now have significantly more demand pent up than ever before,” said Jake Clark, vice president of the GFDA, in a recent webinar on housing.

In recent weeks, public officials have heard two strategies for addressing the economics of the housing crunch — both for developers and prospective homeowners.

Great Falls Planning and Community Development Director Brock Cherry and staff are developing a high-level plan, with work ongoing to update the city’s growth policy. But from a smaller perspective, Cherry is looking underground.

As much as 90% of the buildable land in Great Falls sits on “expansive soils,” according to the city planning department. They can expand and contract with changing ground moisture and wreak havoc on building foundations.

Following lawsuits in the 2000s over moving soils, the city of Great Falls requires geotechnical engineer reports for home building permits. The reports recommend ways to mitigate soil issues, but with no formal policy requiring builders to follow up on the recommendations, few contractors are willing to risk potential liability to complete the suggested work.

It also adds to the startup costs of homebuilding.

“During the interim, we have to do something,” Cherry said, “which means we have to reimagine our development requirements to meet a smaller contractor, who doesn’t have hundreds of thousands of dollars to readily dedicate.”

Cherry recently pitched a small tweak to the geotechnical requirement to city commissioners to promote smaller developments. He suggested starting with a less expensive soil test for new developments to reduce costs for the small number of lots that don’t have expansive soil issues.

Importantly, the new policy would have an exemption for infill lots. Infill lots refer to existing lots within the city that are unused or underused. This could mean building on an empty lot or demolishing an old home in disrepair for new development.

After all, Great Falls has the oldest housing stock among larger cities in the state, according to the GFDA study. In Great Falls, 66% of owner-occupied homes were built before 1980, compared to 52% in Billings and 32% in booming Bozeman.

While Cherry’s suggested change to the geotechnical requirements would apply to all developments, it’s the small infill building that could get an immediate boost.

“It’s exciting to think that with this one policy, we can remove a significant barrier to small lot development, which is frankly the development that we’re best at,” he said.

The GFDA housing report noted the impact of soils on development opportunities and home-buying affordability. 

Recently, Cascade County commissioners approved NeighborWorks Great Falls to establish a new reinvestment fund to aid working-class homebuyers.

The fund came from a 2023 bill, HB819, which set aside $50 million for low-interest loans for home purchases. It requires counties to designate a “community reinvestment organization” to manage the program locally. Commissioners approved NeighborWorks as that organization on Aug. 13. The money comes to the county as a grant, but it must be administered as a revolving loan fund that gets replenished when borrowers make good on the loan.

The loans are available to up to 140% of the area’s median income and are aimed at so-called workforce housing, which refers to lower-middle-class families who are paying more than the recommended 30% of income on housing.

“That workforce housing group, that missing middle, sometimes does not have opportunities for federal funding sourcing, like a home loan from the city,” said Sherrie Arey, executive director of NeighborWorks. “This really could be a game-changer for those folks to be able to get into homeownership.”

As the designated community reinvestment organization, NeighborWorks will need to secure a 1:1 match to the state funds to implement the program. Arey said that they will be putting together a plan to shop around to investment institutions.

Once matching investments are ensured, the program can offer loans of up to 30% of the total home cost for buyers county-wide. NeighborWorks is now seeking the state’s approval to continue the program.

This story was updated Aug. 22, 2024, to correct the name of Jake Clark.

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