Summary of Missoula's new strategic plan to meet the city's housing needs

May 28, 2019

By MBPC Staff

On May 15, the city of Missoula released a comprehensive, community-driven housing policy that was years in the making. The 95-page document, titled “A Place to Call Home: Meeting Missoula’s Housing Needs”, provides a strategic plan to give the city more tools to financially support housing services, eliminate regulations hindering affordable housing development, and provide incentives to private developers who help meet community housing needs. Altogether, the housing policy proposes the development or adoption of over two dozen policies and code changes that are interdependent and grouped into four action areas. Below is a brief summary of one recommendation from each category: Align and Leverage Existing Funding Resources to Support Housing The strategic plan calls for establishing a Housing Trust Fund, which can provide Missoula with one of the most flexible and effective tools for ongoing support of affordable housing development. A housing trust fund creates a dedicated local funding mechanism that can meet very specific local needs and provide the consistency and predictability that enables multi-year projects. To learn more about housing trust funds, see MBPC’s report “State and Local Strategies to Improve Housing Affordability.” A common source of funding that state and localities use for housing trust funds is revenue from real estate transfer taxes. However, Montana amended the State Constitution in 2010 to prohibit local governments from imposing any new tax on real estate sales. Therefore, with that option off the table, Missoula must tap into other, existing city funding sources, which may include revenue from selling city-owned land, allocating Tax Increment Financing (TIF) support, and directing existing infrastructure funding to housing projects. New funding sources can include a mill levy approved by the city council and bond financing that would be subject to a city-wide vote. Reduce Barriers to New Supply and Promote Access to Affordable Homes Accessory Dwelling Units (ADUs), also known as “granny flats”, were identified in the strategic plan as a more resource-efficient type of housing than typical single-family homes, and a useful way to increase density because they can be built using existing infrastructure. However, only 13 ADUs have been permitted and constructed since 2013. Last year, Missoula took an important first step to increase production by updating city code to remove ADUs as a conditionally approved use, meaning that property owners face fewer financial barriers to permit an ADU. Missoula can further action to update aspects of land use codes to increase ADU supply and make construction less expensive. In West Coast communities (where ADU construction is mostly concentrated), officials are finding that removing or amending city-level ordinances can jumpstart ADU permitting and construction, and making these changes can go a long way in increasing the number of affordable homes in crowded cities. Specific proposed actions the city can take include eliminating parking requirements for new construction of ADUs, revising minimum housing unit size requirements to allow for smaller structures, and expand financing tools to help property owners pay for ADU construction. Partner to Create and Preserve Dedicated Affordable Homes The new Missoula housing policy includes a recommendation to create a Community Land Trust (CLT) Acquisition Program to preserve the supply of permanently affordable housing. A Community Land Trust is designed to preserve long-term housing affordability through a shared ownership model where a leaseholder owns their home and the CLT holds the land on which the home is built. This arrangement ensures that the land value of a site is not included in the cost of buying a home and makes homeownership possible for buyers on low- and moderate- incomes. Funding for property acquisition and development can be a challenge for CLTs, as these organizations are mission bound to provide long-term, below-market home prices for those with lower incomes. Missoula can create a formal process for the city and individuals to donate homes and transfer surplus land to CLT partners already working in the community, like Trust Montana and the North Missoula Community Development Corporation. An acquisition program would add existing homes to the city’s stock of permanently affordable housing and help CLTs offset the high costs of acquiring property. Track and Analyze Progress for Continuous Improvement Missoula must create a systemic approach to its affordable housing programs and be accountable to the goals it sets. The city can undertake a five-year comprehensive assessment that will measure program impacts, and in the short-term, design an annual assessment process tracking home production goals, housing outcomes among specific groups of residents, among other indicators. These assessments will function as a tool for decision-making about program investments and how to best spend public resources. Conclusion “A Place to Call Home” offers an example of a city-level housing policy roadmap to guide the future of housing in Montana. The voices of nonprofit service providers, local developers, and everyday citizens were integrated into its recommendations. While the mix of short- and long-term recommendations reflect a home-grown effort, other cities and counties can look to Missoula when developing their local housing policies and adapt certain recommendations to fit their own communities. With this housing policy in hand, Missoula officials now must make thoughtful decisions about which recommendations to prioritize and take meaningful steps to implement them. Too many families in Montana struggle to afford a secure and quality place to call home and local governments have an important role to play in addressing their community’s housing challenges. Having an affordable and safe place to live supports family stability, enables children to learn and thrive, and promotes a robust local economy. We look forward to seeing how the city of Missoula turns its housing policy vision into real action.