MISSOULA – Affordable housing in western Montana is tied directly to the reasons why fast-growth counties are increasing in numbers. As people move into these attractive areas, fewer and fewer of them can afford to buy a home.
In Ravalli County, the second fastest growing county in Montana, unaffordable housing is a growing problem.
“Where do people want to live – where there are rivers, mountains and blue skies,” Ralph Johnson, MSU professor said. “And if there is anywhere where people want to be, it’s in western Montana.”
The reason for the skyrocketing prices in western Montana? High rates of divorce, population growth, young adults struggling with debt and the growing numbers of baby boomers, said George Masnick, a Harvard University demographer who lives in Hamilton.
Since 2003, housing costs have been on a constant incline. According to figures, 33 to 50 percent of households in Montana spend more than 50 percent of their income on housing.
Increases in population coupled with expensive land, materials, labor and increasing financing add to the factors creating unaffordable housing.
Several counties and cities in Montana have taken proactive measures to offset the problem of unaffordable housing. City officials in Whitefish have created an incentive for developers to build smaller, denser, more affordable housing units in exchange for reduced costs for utilities and/or impacts fees.
In Bozeman, where the average cost of a home is around $298,000, the city utilized an array of practices to drop home costs and values, officials said. The city implemented a big-box impact fee which allots funds toward affordable housing. As well, the city placed lot size restrictions and demanded that 25 percent of all units built have to be affordable – in the $120,000 to $200,000 ballpark.
Besides just the issue of affordability of buying a home, the other issue outlined was that of how rentals are unaffordable. Statistics show 80 percent of renters paid more than 30 percent of their income on rent – making saving money to buy a home more unattainable.
The average median income for Montanans is $29,156 annually, while the average median dual income is $48,158 – the 43rd lowest in the nation. Meanwhile, the average cost of a home is more than $200,000 in most western areas of Montana.
Additionally, without being able to qualify for a home mortgage a person’s overall assets and borrowing power declines. Without being able to build that equity, economic prosperity is further declined.
Montana is one of six states that does not offer any state funding to provide for affordable housing.
There might be a light at the end of the tunnel though, as the middle class begins to face the challenges of affordable housing, which surveys indicate will begin to become a greater problem, state officials will recognize the ever increasing price people pay to live in paradise.