Commissioners to Address Bozeman Affordable Housing

By
Real Estate Agent with Hart Real Estate Solutions RRE-BRO-LIC-24638

In a great article by Eric Dietrich of the Bozeman Daily Chronicle, he outlined the affordable housing proposal that commissioners will consider on September 21st as well as outlining the comments and concerns about the proposal from the two most prominent, opposing parties.

The proposal was made in light of rising values in the for-sale housing market in Bozeman and whether it’s the local government’s responsibility to help keep a certain segment of homes at the affordable level. Currently, there is worry that some residents will need to move to outlying communities to keep their homes affordable. Bozeman has had experts, non profits, builders and anyone else with creative ideas offer their best suggestions to tackle affordability. Ideally, Bozeman commissioners will reach a decision next Tuesday.

The Proposal: Currently, the median income for a resident in Bozeman is $61,800 and can afford a home up to $250,000. However, as of last November, median home prices sat at $287,000.

To help lower the average costs of homes in Bozeman, the city would try to build 14 new affordable single-family homes and townhouses by 2016 with 54 new units by 2017. The city would use inclusionary zoning to get the homes built. Essentially, they would ask builders to build a certain number of affordable homes for every full subdivision, development etc. To entice builders in, the city would help cut down their costs by subsidizing impact fees and reducing lot sizes.

Three quarters of these homes would be priced for residents only making 90% of the median income. That would help a family of three making $55,600 able to afford a home of $213,000.

The last quarter of affordable homes would be built for residents making $49,450 and below, or 80% of the median income. These residents could afford a home of $161,000. 

Currently, builders and home affordability non-profits sit on each side of the debate and both have brought up their own concerns with the proposal.

HRDC: The HRDC is a non-profit, community action agency that has helped build affordable homes across town as well as help residents below median income levels to keep a good quality of life.  The HRDC’s concern with the new proposal is that it does not go far enough. The HRDC would like to see more affordable housing for those making $49,450 or less. They were also disappointed that the proposal does not address issues of affordability in the Bozeman rental market.

Builders: Local area builders are concerned that the new proposal and regulations will require too much financial risk on their part without equal compensation for their sacrifice. Essentially, the would be asked to recoup the lost profits of adding affordable homes to subdivision through the impact fees and lot sizes. Builders do not believe the profit line makes that feasible.  On top of that, builders are concerned that even if low income buyers were able to buy a home in Bozeman because it had been subsidized, they may not be able to qualify for financing from banks and other insitutions that want to see certain levels of income.  Builders would take on a lot of financial risk without the guarantee that a buyer would be waiting for them.

No matter what the City Commissioners decide, the affordable housing debate will continue in Bozeman. Hopefully, Bozeman will be able to come up with a proposal that would be agreeable to all parties, if not ideal.

 

Source: http://www.bozemandailychronicle.com/news/city/bozeman-housing-affordability-plan-ready-for-debate/article_9adcef34-ba0b-57b5-8bcc-d79b946062f1.html

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