Voters in Bozeman will decide this week if they’re willing to chip in to build up the area’s housing inventory at a time when home prices are historically high.
A ballot question this election would increase property taxes to divert more revenue into the city’s Community Housing Fund. If the levy passes, the Bozeman City Commission could add close to $1 million dollars annually to the housing fund. The city estimates that on a $364,000 home, that would cost homeowners $34 a year.
“The goal is to have a consistent, sustainable level of funding that grows over time,” said Bozeman Deputy Mayor Terry Cunningham.
The median price for a home in Gallatin County is approaching $700,000, putting home ownership out of reach for many residents.
For years, the community housing fund has subsidized affordable housing developments, like the new Perennial and Arrowleaf Park housing developments located off of Bozeman’s 19th Avenue commercial corridor, and preserved below market rate inventory. The fund also has contributed to a new tiny home village and the annual warming shelter.
The housing fund currently draws from the city’s general fund. Cunningham — who’s running for mayor this election — says that means the housing fund competes each funding cycle with other areas of the city’s budget, including the library and fire department.
And a state law enacted this year that banned a policy known as inclusionary zoning — which required developers to either provide affordable housing units or pay the city in cash or land — limited funding tools even more, Cunningham says.
“The problem is that Montana state law either explicitly or implicitly denies many of the tools that other cities and other states are able to use in order to fund affordable housing," he said, "whether that’s any form of rent control, a luxury tax, a second home tax, a construction excise tax.
“Any of those things are illegal in the state of Montana.”
The Human Resource Development Council, a nonprofit involved with community housing in the area, supports the levy. The organization released its own recommendations for how the city should invest the funds if the levy passes.
"We support the mill levy if the city adopts some form of recommendations that we have and creates a clear pathway of how they’re going to ensure that the resources are invested consistent with their own housing action plan and in a manner that prioritizes the areas where the need is greatest or most acute,” said HRDC CEO Heather Grenier.
The organization estimates that in a five year period the city could use the almost $5 million dollars raised through the levy to leverage up to $230 million in private, state and federal funds, which often require a local funding match.
“We feel really confident that it could generate 900 units,” Grenier said. “And I think with that those 900 units, depending on the household composition, could probably directly benefit about 1,500 people.”
A regional housing study from One Valley Community Foundation estimates that given the city’s current population and workforce, Bozeman needs about 4,000 more housing units to meet demand. Opponents of the levy say $1 million a year is not enough to solve the issue. Others want to see funding responsibilities shared across the community.
Bozeman Chamber of Commerce CEO Daryl Schleim recognizes the urgency around affordable housing in Bozeman, “but without a commitment to say if we will put these dollars towards a specific program and tie those up for X amount of years to solve this problem, it was just very hard to do.”
Deputy Mayor Terry Cunningham says flexibility in the city’s housing fund is important. He says it’s hard to predict which affordable housing opportunities will come across the city’s desk in the coming months.
“I would not mistake the fact that we want to be flexible in how we allocate these funds as a lack of direction,” he said. “The best predictor of future behavior is past performance, and the most effective use of these funds has been to subsidize affordable housing projects.”
