New fund asks Gallatin County businesses to invest in creating more housing supply
As Gallatin County businesses continue to struggle to hire employees with the high cost of housing in the area, a new housing fund will allow those businesses to become part of the solution.
First Security Bank President Jim Ness has been helping develop the concept for the Gallatin County Housing Impact Fund.
“I think realistically in the next six to 12 months I’d like to have the first $10 million raised, and if we get past that first $10 million our organization has agreed to put up another million and then we’ll try to get to $20 (million),” Ness said.
Ness says while the fund will primarily focus on housing supply in the Bozeman area, projects throughout Gallatin County are eligible.
“I don’t think this affordable housing issue is going away any time soon, so I would really like something that is maybe around for some time… to be part of the solution to adding additional affordable housing supply to the market,” Ness said.
Bozeman Deputy Mayor Terry Cunningham says the fund invites businesses and organizations to invest in creating more housing supply. He notes the city cannot solve the affordable housing funding gap on its own.
Cunningham says the development community has already shown interest in utilizing the fund to build affordable housing.
“A developer came to us with a project that had a $2.5 million funding gap that could provide 155 low-income units and said if you’re able to pull this fund together pretty quickly we’d love to be able to be able to take advantage of that,” he said.
For-profit and nonprofit developers will be able to access low-interest loans from the fund for things like land acquisition and infrastructure. A portion of the fund will also be philanthropic dollars.
Cunningham says the loan fund will function differently than the city’s community housing fund, which provides grant funding and subsidies for affordable housing.
“The housing investment fund is a bit of a different cat. It’s low interest loans. It’s bridge financing," Cunningham explained. "It’s a way of adding to the capital stack for a developer so that they can make the entire project pencil. It’s not a grant; it’s primarily a loan program."
According to documents provided by One Valley Community Foundation the fund aims to create and preserve 850 low- and middle-income housing units. Funds will be leveraged 8:1 with the goal of attracting $80,000,000 from other sources.
“The fund will offer low-interest financing to encourage for profit and nonprofit developers, investors, and local governments to partner with community housing providers to preserve and expand housing solutions in Gallatin County,” the document says.
Funds are being invested in the affordable housing nonprofit NeighborWorks Montana, which will be administering the funds. The group is also investing $1 million into the fund.
Fundraising will begin this spring with the first project being funded as soon as this summer.