Like more than half of Missoula residents, Mark Gibbons and his wife Pam don’t own their home and instead have sent a rent check to their landlord for the past 23 years.
They love their nice little house near the University of Montana, where they raised their two sons. Pam works at a local grocery store and Mark is an author and teacher. He was named Montana’s Poet Laureate in 2021. So, as they near retirement age, it came as a shock when they got a call from their landlord notifying them that they were being evicted from their home after nearly a quarter of a century.
The family that owns their house has decided to take advantage of record-high prices and sell. A local Realtor estimated it’s going to be listed for nearly $700,000, far beyond their reach. So they’ve had to scramble to find another place to rent in Missoula, where median home sales prices and rents have skyrocketed in the last decade.
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“When you’ve lived in a place as long as I’ve lived in this place, it becomes your place,” Gibbons explained, gazing at the yard where his kids used to play. “You become emotionally attached. You’ve got all these stories, you raise your kids here. And so it’s like a death in a way, or a divorce, whatever you want to call it. It’s an emotional journey to get out.”
His sons wondered if the whole family could pitch in to buy it, but there was just no way to do it on their incomes. For now, they’ve found a temporary place to stay, but it’s much smaller. Moving out after nearly a quarter of a century has taken a toll on Gibbons and his wife.
“It affects people differently,” he said. “I know it’s just knocked my wife for a loop, you know, emotionally, and it’s bothered me but I’ve stuffed it in and replaced it with anger. And I can get pretty angry if I want about the whole Goddamned thing. So I just need to get out, and get away. Time takes care of everything.”
The couple owned a home in Pablo at one point, but they never felt right about buying a home in Missoula. When they first moved in, they had what they felt was a pretty good deal on rent with the owner for about $800 a month. However, the owner eventually passed away and the house was put in the possession of a trust owned by his relatives. Over the years the rent kept getting slowly increased. Gibbons would always grumble a little bit but kept paying. Still, he was blindsided by news of the sale. Now, he regrets never buying a home of his own. He didn’t think it would come to this.
“I’m not an economic wizard, obviously,” he admitted. “But it’s just the lack of decent family-sized housing.”
So this summer, Gibbons has been exposed to the brutal real estate and rental markets in Missoula after 23 years. He was shocked at the prices he saw for even the smallest apartments. Luckily, a friend let him rent a condo. Now Gibbons commiserates with people like his neighbor, who is also getting evicted because the house is being sold.
“It’s just a really bad time for renters,” he said. “My wife and I have resources and connections in the community because we’ve been here so long, but a lot of people don’t. It’s a shit show of a problem with all the gentrification and the Airbnb world and property taxes because of the massive houses.”
Housing prices have soared in western Montana since the start of the pandemic, and Missoula County saw record-breaking increases. The median home sales price was $315,250 for all of 2019. That number jumped to $575,000 in June of 2022, an unprecedented 82.5% increase.
“We realize the numbers are grim,” exclaimed Mandy Snook, the president of the Missoula Organization of Realtors, in an April 2022 meeting about the housing market. “And we are not happy about the direction that they are heading. There are not enough housing units for sale or rent. We are out of balance and in a crisis.”
In Ravalli County, the median home sales price went from $309,000 in 2019 to $682,500 in June of 2022, according to the Missoula Organization of Realtors. That’s a whopping 120.8% increase.
The story was similar in Sanders, Mineral, Lake, Granite and Flathead counties, and in fact, for almost everywhere in Montana.
Local real estate agents noticed an increase in out-of-state buyers, and data showed that the percentage of all-cash buyers increased during the pandemic.
Brint Wahlberg, a Missoula Realtor, noted that all-cash purchases in Missoula County have increased from 17.74% of all financing methods in 2020 to 23.52% in 2022.
“That’s more than one out of every five home purchases,” he said.
Realtors who specialize in land and ranch sales reported having their busiest years ever.
The surge in demand was coupled with a lack of supply because builders have not kept pace with the number of homes that should be getting constructed just to keep up with population increases, let alone a spike in interest from out-of-staters.
“We’re in an under-supply of about 2,400 units,” according to Karen Hughes, the assistant director of Missoula County’s community and planning department. At one point in 2017, there were nine single-family homes listed for sale when the Missoula Organization of Realtors estimated about 6,000 people were looking to buy one. Realtors have been astounded at bidding wars that have drastically put upward pressure on prices, shocking both buyers and sellers.
Wages have also not kept up with rising home prices. The median family income in Missoula County has risen by just 15% since 2010, while the median home sales price has increased by 180% in that time.
Rent prices also surged. In 2021, average rents increased 5.6% over the year, with increases accelerating in the second half of the year. The average rent for a two-bedroom apartment stood at about $1,064 per month. The average vacancy rate for the year was about 1.3%. Most experts say a healthy vacancy rate is somewhere between 5% and 8%.
“This is the first year that I’m seeing a two-bedroom apartment in a standard multiplex go for more than $1,000,” explained Paul Burow, a local Realtor and property manager.
He noted that in the first quarter of 2021, the rental vacancy rate was 1.2% and the number dropped to .9% at the end of the first quarter of 2022.
Some efforts to ameliorate the situation have been successful, and others have failed.
In Missoula, over 400 units of income-restricted apartments are under construction, including the largest single affordable housing complex in Montana history. However, experts say hundreds, if not thousands, more are needed over the next few years.
In Whitefish, the city council banned tourist rental homes in large portions of the town as prices there push out workers.
Montana Gov. Greg Gianforte created an affordable housing taskforce in the summer of 2022 as a response to the crisis.
However, Gianforte, a Republican, also vetoed a bill passed by the Republican-controlled state Legislature that would have created state Low Income Housing Tax Credits.
In his veto message, Gianforte said HB 397 would cost $45 million and would have tied Montana credits directly to the level of available federal housing credits.
“Considering current and ongoing federal funding for affordable housing development and rental assistance, HB 397 is unnecessary legislation that would have an unjustified long-term fiscal impact on the state,” Gianforte said.
The bill was supported by several nonprofits that build low-income housing in Montana.
“Since 2016, the Montana Board of Housing has denied over $310 million in federal housing tax credit requests due to lack of funding, half of which were from Montana’s small towns,” wrote Homeword executive director Andrea Davis in an op-ed published in newspapers across the state in May of 2021. “Montana missed the opportunity to build 2,000 new affordable apartments and create 4,000 construction jobs with over $186 million in wages.”
In 2021, there were 14 applications (six from small towns) for the federal tax credits totaling $81 million in construction, Davis wrote. However, she said, only $29 million in federal tax credits were awarded, which was only enough to fund 115 to 130 affordable apartments.
“Montana’s continued economic recovery relies on a strong workforce,” Davis wrote. “A strong workforce relies on homes that workers can afford to rent.”
