That was especially true for moderates and liberals, but also for some conservative voters like Montoya. Rising housing costs also are a major component of inflation, which was the top priority for voters across the board. For example, the median rent in Colorado Springs has grown 38 percent in the last four years, while home prices are up 70 percent in Pueblo.
It’s part of a national trend, but Montoya wants candidates in Colorado to answer these questions: “Is there a fix in the future? Is there better times? What’s their goal for a year from now, five years, 10 years? Or is it just (prices) keep going up until you’re forced to move out in Colorado?”
With those challenges in mind, CPR News interviewed Gov. Jared Polis, a Democrat, and his Republican challenger, Heidi Ganahl, about their approach to the state’s housing market over the next four years.
Different approaches, same goal: more homes
Housing shortages can be traced to many roots.
The state saw a dramatic reduction in housing production after the Great Recession, leaving it with a shortfall of new apartments, condos and houses. Colorado also is seeing the long-lived effects of under-investment in affordable housing, advocates say. And it’s all been exacerbated by rising costs for labor and materials following the pandemic.
For his part, Polis described housing as a top priority should he win a second term, hinting at significant new steps that could give the state government a stronger role in what gets built, and where.
The governor said the state must work with cities to reform zoning codes and encourage dense, sustainable development along transit corridors, while limiting exurban sprawl.
“It’s a discussion that the state has to have. And if we take action now, I think we can avert some of the devastatingly high housing costs of California and other states,” he said. “You know, people complain about the housing costs in Colorado, rightfully so. But (local housing costs are) still 40 or 50 percent less than California. We don’t wanna become California.”
His challenger, Ganahl, said that housing prices are affecting everyone, including her own 26-year-old daughter, who is living at home in Douglas County because of high rental prices. She described herself as a convener who would help local governments plan for “new, cool, innovative” housing, while also trying to cut regulations that slow construction.
“I will be all about vision, and building a vision for our state and what our future looks like here. And I think we’ve got a lot of opportunity to do things differently,” she said.
For both candidates, government-subsidized affordable housing programs were a secondary focus, even though that’s been one of the state legislature’s main strategies to address housing in recent years.
Instead, they converged on one idea: It’s time for Colorado to build more housing, especially by unleashing private development, and it must do so fast.
Polis says he’ll push for density in second term
Polis said that Colorado’s main housing problem is a lack of housing production. And the state should respond, he said, by encouraging dense and sustainable development.
“In many ways, the lack of housing is a completely contrived problem. It’s a problem of our own making. And we can unleash and remove barriers to significantly more opportunities for housing,” he said.
Housing production in Colorado fell off sharply after the Great Recession. It had nearly recovered as the pandemic set in, but is threatened again now by rising interest rates and a shaky market.
The “bigger issue,” Polis explained, is the “hesitancy” of cities and counties to reform zoning rules and other policies that shape development.
“Really, what we need to figure out as a state is how people can afford to live close to where jobs are,” he said. “Exurban sprawl is not the answer. We need to make sure that we get cars off the road, save people time and money on their commute, reduce pollution and have more opportunities to reduce costs and live affordably, close to where your work is.”
Right now, the state has little direct power to encourage cities to make it easier to build more densely, or to discourage suburban sprawl. It can influence those questions indirectly, especially in how it builds roads and other transportation infrastructure. But it’s local governments who generally make the ultimate decisions about zoning and building codes.
Polis said that under his leadership, the state has already offered “carrots” to encourage what he considers better development. Areas that embrace density and public transit are eligible for larger amounts of federal money under laws passed by Democrats this year.
“What we’ve done is we’ve tied a lot of that to local zoning reforms,” he said.
He described the incentives as an “initial piece” to ensure “that it wasn’t just money shoved into a failing system that fails to deliver housing close to where jobs are, but it (instead) was aligned with incentives for local government to do the right things with regard to an inter-jurisdictional approach to housing,” he continued.
Asked how else he would encourage local zoning reforms, Polis started by describing a “partnership” between the state and cities in his potential next term.
“This is going to be a lot of our work and my focus … is to really solve rather than just pretend to solve, or throw money at, or talk around the edges of the housing affordability crisis in the state,” he said, describing conversations he intends to convene across party lines with everyone from housing, business and industry advocates to environmentalists and others.
But that still leaves a bigger question. Many local leaders have long considered development rules and zoning to be a matter of “local control” — an important concept that has allowed Colorado cities to have power over their own domains. Unsurprisingly, it’s a precedent that local leaders tend to defend zealously.
Would Polis embrace mandates, or a generally stronger role for the state government in housing, CPR News asked?
Polis’ response made clear that he doesn’t see local control as an ironclad rule when it comes to development.
“I think that the state is already involved with housing, of course. What we find more and more is the decisions of one community impact not only themselves,” Polis said.
And issues that cross local boundaries, he said, start to go beyond local control. Local control, he argued, “is about the idea you control your own destiny. It’s not, you control the destiny of your neighbors.”
Polis compared housing to transit, which the state is more active in planning and funding.
“We will succeed or fail as a state based on our ability to deliver housing (so) that people can actually afford to enjoy the great life that our state offers and thrive,” he said.
Ganahl targets regulations, calls for rural opportunities
Heidi Ganahl similarly believes that government is getting in the way of development that could ease the housing crunch.
Asked why housing is so expensive, she said that a quarter of the cost of building new residential units come from regulations, including taxes and fees.
“You’ve got to incentivize builders to build here and make it feasible for them to do business,” she said.
Ganahl named a few specific causes, such as lawsuits over defects in condo construction, as well as taxes, fees and “the regulations and red tape” at both the city and state levels.
Like Polis, she wants to see cities allow for greater development, and she sees herself as a “partner” in making that happen.
“We also have to honor this idea that it’s really up to the local municipalities to manage their growth, but I can partner with them as a governor, and incentivize them,” she said. She’s interested in ideas like redeveloping malls into housing, creating tiny home villages and encouraging European-style development with “smaller, more efficient” units.
It’s not clear yet what she would do to encourage that kind of development over the next four years. Later in the interview, Ganahl reiterated that she was hesitant to interfere with local government decisions.
“I think it depends on the issue, but overall, I defer to local municipalities or governments to make those decisions. But I can certainly incentivize them and talk about other places that are doing it really well around the world and how we can emulate them and make it exciting and fun and creative.”
That’s similar, in principle, to Polis’ use of financial incentives to encourage greater density. But Ganahl said she didn’t support that kind of use of government funds to influence local policy.
“You know me, I’m more about letting the free markets do their thing and using other kinds of incentives. We’ve got a lot of problems we’ve gotta solve in Colorado that we need our government funds for, so I think there’s other ways to do it,” she said.
Asked how else she would incentivize innovative ideas, as she hopes to do, Ganahl said she would work with others to develop a plan. She said she was interested in the work of a group of CU architecture students who have been reimagining main streets, as well as a free market-focused think tank called the Common Sense Institute.
In the same answer, Ganahl added that she would fight for water rights.
“That’s one of the most important things I can do as governor, is not defer to the federal government to decide what’s right for our water. Coloradans should make those decisions,” she said. “And we are the ones who should decide what smart growth looks like, not hand that decision off to the feds.”
She also raised the possibility of helping small towns grow, if they wish, by developing broadband and jobs.
“Let’s make sure they have the tools and resources to attract young people moving into the town, or their kids staying there — like healthy broadband and opportunity. And with this work-from-home shift from COVID, I think it’s very possible to see our growth happen in more of the smaller towns across our state.”
(Polis didn’t raise broadband in his interview, though he signed a recent executive order to develop a plan “to connect 99% of Colorado households to high-speed broadband by 2027,” along with legislation dedicating money to the cause.)
Ultimately, Ganahl said, the state has to work together to plan for its growth.
“I think it comes back to water, for the most part, and making sure we have enough water to grow, at the right pace,” she said. “But this is a conversation we need to have with the people of Colorado and the local municipalities and the small towns across our state about what their heart is for their neighborhoods and their streets,” she said.
What about designated affordable housing?
Both candidates remained focused throughout their interviews on the question of how to encourage and plan for development. They put much less emphasis on funding for designated affordable housing programs, where the government subsidizes development with below-market costs for residents.
The state currently has record amounts of federal money — about $650 million — going into housing and homelessness programs, but those spending levels will recede in the years to come. Aside from this short-term boost, the baseline spending is about $50 million a year.
Voters also have another housing choice on the ballot. Proposition 123 is the first statewide ballot measure for affordable housing funding, obligating the state to dedicate some $300 million of the annual budget to the cause. The measure wouldn’t raise taxes, but instead divert money from other programs.
Polis declined to say whether he supports Prop. 123, saying he’s still reviewing it. Ganahl’s campaign did not respond to a follow-up question about her position on the measure.
Asked if he would prioritize an increase to affordable funding levels in general, Polis didn’t give a firm answer.
“The housing challenge we face is not an issue that we can buy our way out of. And so what I’m more interested in solving are the policy reasons that Colorado has a housing affordability crisis,” he said.
He continued: “Money’s a part of it. Some of that can come from public-private partnerships. Some of that can come from housing authorities. Some of that could come from the state, where we are flush (with money) over the next several years. And there is a question about what we would do in the long term, but it all will be determined, whether it works, by how we’re able to remove barriers to the kind of housing that we need in our state.”
He pointed out that affordable housing generally means rental units, which he sees as necessary and welcome. But he said the ultimate goal is the kind of intergenerational wealth building and secure retirement that comes through home ownership.
“We’d really like to build the (subsidized) affordable housing program. It’s helpful to provide a place to live. But it should never hold us back from the kind of reforms we need to build more housing that’s affordable … for people to be able to purchase and own and benefit from the appreciation.”
Polis added that he supports models like community land trusts.
Ganahl, like Polis, is doubtful that government-subsidized housing can solve the housing problem by itself.
“It’s not working fast enough, so we’ve gotta have some big, bold ideas on tackling this issue, or we’re gonna have some real problems here. Our kids and grandkids aren’t gonna be able to stay here,” she said.
Citing years of broken promises to build affordable homes, a Chicago City Council committee rejected a plan to lease public housing land to a professional soccer team owned by a billionaire ally of Mayor Lori Lightfoot.
That was on Tuesday. Less than a day later, allies of the mayor called a do-over and reversed the vote.
The full City Council then voted Wednesday to approve a zoning change needed to let the Chicago Fire soccer team build a practice facility on the 26-acre site.
A June story by ProPublica detailed how the land was once part of the ABLA Homes, a public housing development on the Near West Side where 3,600 families lived. After demolishing most of the ABLA buildings and displacing thousands of people, the Chicago Housing Authority promised to build more than 2,400 new homes in the area. So far, it has finished fewer than a third of them.
Lightfoot offered the ABLA site to the Fire late last year, and the CHA board signed off on the plan this spring. It is one of a series of deals the CHA has made to sell, lease or give away its land for nonhousing uses, including Target stores, a private tennis facility and a school running track and turf field. The Fire are owned by Joe Mansueto, founder of the investment research firm Morningstar.
The zoning change was considered one of the easiest steps needed to finalize the Fire lease, since Lightfoot’s allies control the city commission and the council committee that had to sign off. But it turned out that distrust of the CHA led to an embarrassing, if short-lived, setback for the mayor and her team, which had to resort to an unusual ploy for more time.
It’s hardly unprecedented for Chicago mayors to advance their agendas with strong-arm tactics and calculated legislative maneuvers. For example, former Mayor Richard M. Daley once waited until the council was about to adjourn before ramming through the repeal of a law he didn’t like in just a few minutes. Rahm Emanuel mastered a long tradition of letting loyal aldermen use committee budgets for patronage and perks. And Lightfoot fought to keep meetings with aldermen out of public view.
On many occasions, aldermen have been known to vote against ordinances they sponsored or to embrace measures they criticized after getting calls from the mayor. The do-over is another reminder of how Chicago mayors almost always get their way.
In defending the deal, the CHA has said that turning over land — the largest open plot at ABLA — to the Fire will not impact its plans for more housing. The agency has also said residents will benefit from recreational and job opportunities when the Fire facility is built. The team has emphasized similar points in describing the deal as an investment in the West Side.
But after years of watching CHA fail to deliver on its commitments across the city, many housing advocates and aldermen are skeptical. From the beginning of Tuesday’s zoning committee meeting, CHA and city officials were playing defense. “The CHA is well and far behind its goals,” Alderwoman Maria Hadden said at the meeting.
With rising homelessness and thousands of people on CHA waiting lists, she said, “It’s concerning to see such sluggishness.”
“Housing is what we do,” responded Ann McKenzie, chief development officer for the CHA. She said the agency hoped to start building 220 more units at ABLA this fall, split between low-income housing and market-rate buyers.
But McKenzie acknowledged that Hadden was right about the agency falling short of its commitments. Even when the new units are done, the CHA will have delivered less than half the homes it is obligated to under court agreements.
McKenzie vowed more housing will be built. To adjust for the land leased to the soccer team, she said, the CHA would have to concentrate more housing on nearby blocks. But she argued the Fire agreement could bring money and momentum.
“We actually think this is an improved plan,” she said.
McKenzie said under the current proposal the CHA would get $8 million up front plus about $750,000 to $800,000 a year for as long as 40 years.
A group of housing attorneys suggested in a letter to the committee that the plan violated civil rights laws and court orders. McKenzie and a city lawyer said that those issues would be part of a review by the U.S. Department of Housing and Urban Development, which must sign off any plan to dispose of public housing land.
Alderman Tom Tunney, Lightfoot’s hand-picked chair of the zoning committee, noted: “This is a zoning process. This is not about HUD agreeing with the use of the land.”
But aldermen continued to express frustration with the CHA.
“I came from public housing,” said Alderman David Moore, who grew up in the CHA’s Robert Taylor Homes and now represents a South Side ward. He wanted to see letters of support for the Fire deal from resident leaders.
McKenzie said she didn’t have letters but assured him the CHA had been talking with resident groups for months.
That wasn’t good enough for Moore. “I cannot support this item without a letter of support,” he said.
Alderman Jason Ervin, whose ward includes the Fire site, urged his colleagues to support the zoning change, arguing it would provide a boost to the community. Still, he said, “The concerns that have been raised are valid given what’s transpired with the CHA over the last 20 years.”
When Tunney began the roll call on Tuesday, it was quickly clear the measure was in trouble. Seven aldermen — including Hadden and Moore — voted no. Seven members of the committee were no longer present. And only four joined Tunney in voting yes. The item would not advance out of the committee.
But then, minutes later, Tunney announced that the committee would reconvene Wednesday morning to “reconsider the vote.”
With the help of two aldermen who changed their votes, the do-over on the CHA-Fire deal only took a few minutes.
Tunney started the meeting Wednesday by announcing the committee now had letters from resident leaders backing the Fire agreement. He asked for a motion to reconsider the first vote.
Under council rules, a vote can be reconsidered only if someone from the winning side moves to do so. Alderman Felix Cardona Jr., who voted against the Fire deal on Tuesday, was ready to make the motion. Tunney then called for a vote to reconsider the first vote. It passed 9 to 5 with the help of Cardona and Moore, who flipped from the day before.
Alderman Anthony Beale, a Lightfoot critic who cast one of the no votes, accused Tunney of “skirting our rules” by arranging for a second vote on the proposal.
Tunney brushed off the criticism, then announced that Cardona had moved for a vote on advancing the Fire plan. Cardona hadn’t said anything.
But the committee went ahead with the new vote to advance the zoning change to the full council. This time it approved the Fire deal, 9-5.
Afterward, Moore said the letters from resident leaders swayed him, while Cardona said Ervin persuaded him that ABLA residents were in favor of the proposal. Still, Cardona said he would make sure the council calls CHA officials to a public hearing to explain how they will build more housing.
“As you heard today, all my colleagues have an issue with the CHA,” Cardona said. “So the best thing for us is to bring them to the carpet and have a serious conversation with them.”
A few hours after the committee advanced the Fire deal, the full council approved it by a 37-11 vote. The CHA now has to submit the proposed agreement to HUD for review.
At a press conference later, Lightfoot said the CHA had done “an extensive amount of community engagement” in the ABLA neighborhood “to make sure the development really reflected what the community said they need.” Then she turned to praising Mansueto.
“Joe Mansueto has been very intentional about answering my call for business people to invest in areas of our city that have seen either little to no investment or, frankly, have been disinvested in,” Lightfoot said. “So I’m grateful to Joe Mansueto.”
With the anticipated rent increase, they were facing monthly payments of $1,100 if they signed a year-long lease and even more if they went month-to-month.
Priolo said the process of finding a new home was a “mad dash” but their real estate agent was able to put the $155,000, 1,500-square-foot home on Third Street Court SW on their radar.
The couple will soon be closing on the house that will serve as the home for them and their 10-month-old son.
Their new home is one of six newly constructed affordable homes built as part of a partnership between the city of Hickory and Charlotte-based JRN Development.
Leaders from the city joined with company representatives and homeowners to celebrate the completion of the new subdivision, known as Ridgefield Place, on Wednesday.
Last October, the city agreed to sell six city-owned pieces of property on Third Street Court and Third Street Place SW to JRN for $18,000. JRN representative Chris Younger said the city also waived utility connection fees.
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Younger estimates they had 20 inquiries in the first 48 hours after the homes were listed.
“We did not allow bidding wars,” Younger said. “It was a first-come, first-qualify type scenario.”
The houses were only available to people earning below 80% of the area median income, which is $53,900 for a family of four.
The homes, which are mostly in the 1,500- to 1,700-square-foot range, have all been sold for between $155,000 and $168,000.
The homes have deed restrictions limiting the amount of the selling price for 15 years. That’s to ensure the homes remain in an affordable price range even if they are sold.
‘A little breathing room’
The new residents of the community, many if not all of whom are young couples or single parents with young children, were excited for the chance provided by the community.
Priolo called it a “life-changing opportunity.” While he said he would now be paying the same amount for his mortgage that he would be paying in rent, he also pointed to the upside of being able to have a place to call his own.
“I’ll be able to fix things myself and not think that I’m just doing it for some other person,” Priolo said.
For some new residents, the houses in Ridgefield Place will be their first homes in Hickory.
Philip and Samantha Manche moved from Boone after finding a lack of suitable options in the mountain town.
“We want to grow a family and this is a great family town and a great area,” Samantha Manche, 21, said. The couple welcomed a child into the family less than three weeks ago.
They said stability was important for them.
“Since we’ve been married, we’ve had very transitional housing from apartments to kind of Airbnbs and living with family, kind of figuring out where to live,” Philip Manche, 23, said. “So we’re so excited to have a place that we can make our roots and be a part of this community.”
Shontabia Belton, 27, is another newcomer to Hickory. She moved from Charlotte with her 6-year-old son because of the lack of affordable housing.
Without the opportunity provided by the program, she said she likely would not have been able to afford a home of her own. Not without an immense amount of stress, at least.
“This gives me a little breathing room,” Belton said.
Keep it going
The Hickory Affordable Housing Initiative that helped establish Ridgefield Place began in 2020.
At that time, the city partnered with the Unifour Consortium housing program and Western Piedmont Council of Governments to build two units in the same neighborhood that now includes Ridgefield Place.
The first two houses have already been sold.
At the gathering on Wednesday, representatives of both the city and JRN said they were interested in finding ways to keep the program going.
“We’re not in the business of owning vacant lots,” Hickory Mayor Hank Guess said, adding the city would continue to look for places where affordable houses could be built.
Kevin Griffin is the city of Hickory reporter at the Hickory Daily Record.
The Alexandria Redevelopment and Housing Authority (ARHA) has announced some next steps for plans to redevelop Ladrey High Rise, a public housing building in Old Town North.
The current building is an 11-story, 170-unit high rise building housing seniors and residents with disabilities. The redevelopment plans will see that building and an adjoining property demolished for a new mid-rise construction. The new development is slated to be a one-to-one replacement of the units on the site.
The building primarily houses seniors and residents with disabilities. ARHA said in the release the new development will increase the number of units on-site that are committed affordable units.
The building is currently fully occupied, with residents temporarily relocated during redevelopment. Earlier development plans noted that current residents will have a right to return — priority on new units given to current residents displaced during construction.
“This is the next big step in our plan for improving housing and the quality of life for all residents in our city,” said ARHA CEO Keith Pettigrew. “When completed, the units in the Ladrey High Rise will rival other modern housing developments in Alexandria. We look forward to hitting the ground running so that we can get these longtime residents into their brand-new homes as soon as possible.”
New amenities in the redevelopment include underground parking, meeting exercise and service rooms, and a community plaza. Residents will also have access to rooftop amenity spaces. ARHA said the redevelopment was spurred on in part by a need to make the building more accessible to residents with disabilities.
Kenneth Burton, a 20-year resident of Ladrey who uses a power wheelchair, said the in the release that the current building is not designed for him to easily get around.
“We are the ones who are going to live here, who will utilize the building day in day out, so it’s good to have a voice in the process,” Burton said. “We have been told Ladrey would be renovated and upgraded many times before, but it hasn’t happened yet. But now this time, I believe it will.”
In a release, ARHA said it selected Winn Companies and developer IBF Development to help spearhead the redevelopment plans. The project still has to work through the city’s redevelopment process.
“Both firms have extensive experience developing quality affordable housing communities regionally and nationally,” ARHA said in the release. “The proposed development plan will replace all the current Ladrey units and increase the number of apartment homes available to working households.”
Photo via Google Maps
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.”
GLENDALE — When searching for an overnight rental, many people have found comfort in a residential rental.
But many in the Valley are question the explosion of the short-term rental industry in the region and its impact on the local housing market. And opinions are divided on what it means.
Out-of-state banks, holding companies and individuals have bought Valley homes and marketed via online sites such as Airbnb, Vrbo and others.
Realtors, in their efforts to find appropriate homes for potential customers, say they are struggling with this issue, dealing with a reduced inventory and, in some cases, whole blocks of rental homes used mostly for parties and vacationers.
A study of homes shows the average overnight rental price for the 1,334 homes available in Mesa on a recent day was $198. In Sun City, it was $171 for 74 units.
Jennifer Allen, the chief creative officer for 72SOLD, said the shortage has had an impact on the ability of qualified buyers to find homes.
“It definitely has a negative effect on sale prices with respect to potential buyers who plan to occupy the properties instead of renting them,” Allen said. “It makes the properties less desirable for this group of buyers.”
Allen said the presence of overnight rental homes has a slightly negative effect with respect to investment buyers as well.
“Homes in quiet neighborhoods without a lot of rentals tend to rent for a higher monthly rate,” she said. “It further affects the quality of life in a community, because particularly with short-term rentals, you have so many people coming in and out who tend to stay up later and create more noise and activity in and around the area.”
Allen said the buy ups also lead to an excess inventory — temporarily. When investment firms buy large blocks of homes, it sometimes allows them to manipulate prices.
“They have so much buying power” under those circumstances, she said. “Also, a sudden decision to sell a lot of those homes could end up flooding the market with inventory.”
There are few studies to show the impact of short-term rentals on overall housing markets. Those that are done look at specific market’s such as Los Angeles, so gaging the impact can come down to anecdotal information.
A review of random Maricopa County for rent shows some are owned by out-of-state entities. A Scottsdale property on Mitchell Drive is owned by Desert Norseman Mitchell Inc., headquartered in the San Diego area.
Some homes are listed on websites as overnight rentals. A Gilbert home that rents a two-bed suite for $280 per night is owned by IH6 Property Phoenix LP, which is listed by the Arizona Corporation Commission as a “foreign limited partnership,” with no mailing address.
Even in areas where there’s less out-of-state ownership, there are still blocks within residential neighborhoods with high percentages of rentals.
One block in northwest Phoenix, near Glendale, is northeast of the intersection of 41st Avenue and Pinnacle Peak Road. A string of contiguous homes on that block are owned by a couple with a California mailing address, a living trust and a Scottsdale-based leasing firm. CPI-Amherst, a foreign limited liability company with an address in Austin, Texas, owns another home on that block.
A high number of single-family rental homes in an area doesn’t have the same impact as an apartment complex or condominiums, Allen said.
“It tends to have a negative effect on the quality of life and saleability of homes in quiet neighborhoods as well as a negative effect on hotels and resorts,” she said. “They’re facing competition from investment owners who typically don’t have to comply with all of the safety regulations and other governmental oversight required of commercial businesses.”
Allen said this trend has become part of what’s discussed with potential buyers up-front.
“We are careful to disclose to buyers if we know about short-term rental properties in the area because of their effect on the quality of life,” she said.
Several Arizona cities, notably Scottsdale, Paradise Valley and Sedona have tried targeting those quality-of-life issues through lobbying the legislature to change state laws giving cities more power to regulate short-term rentals. Scottsdale has seen among the biggest impact of short-term rental buyers purchasing numerous houses.
But not everyone in the Valley real estate business is experiencing the same issue. A broker with a prominent Valley firm, who asked to be anonymous, said there aren’t enough overnight rental homes in the areas Award serves for it to be an issue.
“We haven’t seen whole blocks being purchased by corporate buyouts in the areas we serve,” the broker said. “Inventory was at record lows for over 18 months until the end of May.”
That firm serves more than a dozen Valley communities, but primarily focuses on retirement communities, such as Sun City, Sun City West and Wickenburg.
Evans said through the end of May, institutional buyers are part of the reason home prices kept climbing.
“Since the end of May, inventory is up, demand is down and interest rates are high,” the broker said. “The investors and other institutions who were buying things up weren’t making the prices spike, but they were keeping the prices high. Then, interest rates went up, and now we have inventory, but no buyers.”
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The Utah company that bought Meadowlark Community mobile home park in 2020 is shopping the property around after a bumpy two years.
Last winter, Meadowlark residents turned on their taps and found brown and black water pouring out. Montana Department of Environmental Quality investigated and discovered the minerals iron and manganese in the water — generally considered safe but unpalatable, according to DEQ.
The park has spent the last year trying to fix it. Havenpark has acknowledged that Meadowlark has had ongoing water issues, but maintains the water was always safe to drink, despite the color.
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“The water is still really dirty,” resident Katelyn Anton said on Friday.
With the news that Utah-based Havenpark Communities might sell Meadowlark, Anton’s hope is that residents there now might get the chance to buy the mobile home park themselves.
Three miles north on South Billings Boulevard, residents at C&C Community Mobile Home Park did just that in 2018 with the help of NeighborWorks Montana, a nonprofit organization working to create and protect affordable housing across the state.
In 2018, the residents of C&C began the process of buying the park from its owner, Chuck Barrett, and incorporating themselves into a cooperative nonprofit. The sale was finalized a year later, and over the last three years, C&C Community has made significant infrastructure improvements and bonded as a neighborhood.
“It’s totally changed,” said Wendy Herman, president of the C&C Community board and park resident for more than 25 years. “We were a community; now we’re friends.”
On Friday morning, she walked around the mobile home park with her friend Mary Lou Affleck, pointing out the changes and improvements. In 2018 Affleck was working for NeighborWorks and first contacted Barrett, pitching him on selling the park to its residents.
She’s since retired and now works part-time for Rebuilding Together Yellowstone County, a nonprofit that provides free home repairs for low-income homeowners.
“It’s night and day,” Affleck said of how the park has changed since 2018. “They made the dream come true in my opinion.”
As a newly formed cooperative nonprofit, C&C Community was eligible for a number of grants and programs to update infrastructure and help residents improve their homes. One of the biggest was a community development block grant through the city of Billings for $385,000.
Additional infrastructure grant funding pushed the total to just over $500,000, with which the park was able to repave its roads, install street lights, improve its signage and fencing, install storm drains and a fire hydrant, and rebuild the park’s pump house and utility shed.
“No one person can solve everything,” Affleck said. “But through partnerships you can improve things 10 fold.”
It’s something Anton at Meadowlark would like to see happen. Residents there have dreamed about owning their park for years, she said.
NeighborWorks has expressed interest in helping purchase Meadowlark and is pursuing its options with Havenpark. Owners who sell to a nonprofit receive a tax break.
For decades, Meadowlark was Blains Mobile Home Court, situated between the Yellowstone River and the Billings Regional Landfill just off South Billings Boulevard. In 2020, Blains sold to Havenpark Communities, which christened it Meadowlark.
A spokesman for Havenpark said the company has yet to decide if it will sell Meadowlark.
“We have recently received several offers from interested parties to purchase Meadowlark,” he said in an email on Friday.
“While we are evaluating those offers, we have not determined at this time whether we will sell,” he said. “We are very happy with our purchase of Meadowlark and our efforts to enhance and grow a stronger community.”
Owning the parks in which they live help empower those residents and it gives them a sense of housing security and pride in their communities, Herman said.
Mobile home park residents often own the homes in which they live but not the property on which the homes sit. That land belongs to the park owner, and residents rent the space.
It leaves residents vulnerable to rent hikes and other fees, or to losing their homes altogether should the owner sell the park to an entity interested in developing the land, Affleck said.
NeighborWorks Montana has helped residents from over a dozen mobile home parks across Montana buy their communities. C&C was the first in Billings.
Back at Meadowlark, Anton received notice that her rent will increase again in January, a jump of $40. Between rent and other fees, she’ll now be paying over $740 dollars to live in Meadowlark, up from $325 three years ago.
She described Havenpark’s decision to shop around the mobile home park as “cowardly and callous.” But she praised Meadowlark’s office manager, who’s been responsive to residents and worked hard to bring the community together. She also praised the park’s maintenance man, who’s always available and ready to help.
“It’s the only thing holding this place together,” Anton said.
Housing prices could dip by as much as 20% in more than 180 markets nationwide if the US economy falls deeper into a recession, according to a new study.
Experts at the research firm Moody’s Analytics said that homes in 183 of the 413 largest regional housing markets in the country are “overvalued” by more than 25%.
A map based on data from Moody’s was published by Fortune. It showed that home prices were poised to fall in so-called “bubbly” markets like Phoenix and Boise.
Mark Zandi, the chief economist at Moody’s, told Fortune that he believes housing prices in the US will either remain the same or fall by as much as 5%.
The adjusted forecast is in contrast to earlier predictions which held that housing prices would remain unchanged over the next 12 months.
If the US falls deeper into a recession, home prices could drop by as much as 10%, according to Moody’s.
The firm believes that the Boise market is overvalued by 72% while homes in Charlotte are overvalued by 66%.
Moody’s analysts say that the Austin, Texas real estate market is 61% above its true value.
The forecast is much more pessimistic than other reports, including those from the Mortgage Bankers Association, Fannie Mae, Freddie Mac, CoreLogic, and Zillow — all of which are predicting a single-digit rise in home prices.
But other agencies have echoed Moody’s. Fitch Ratings said it envisions US home prices dropping by up to 15%.
Robert Shiller, the noted economist who correctly predicted the 2008 housing crash, thinks there’s a good chance home prices could fall by more than 10%.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said last week that the recent slump in the housing market is “still nowhere near the bottom, especially for prices.”
His forecast came after existing home sales dropped 5.9% to a seasonally adjusted annual rate of 4.81 million units in July, according to the National Association of Realtors.
Existing home sales have fallen for six straight months and have hit their lowest level since May 2020.
The slump has coincided with a surge in mortgage rates over the last year, which compounded the affordability challenge for would-be homebuyers facing steep sale prices.
Additional reporting by Thomas Barrabi