TACKLING HOUSING AFFORDABILITY IN MONTANA: What Are the Challenges Facing Our Housing Programs.

• Author: Barke, Patrick M.
• Position: TRENDING

Housing has always been a public policy priority. Governments that cannot put roofs over the heads of their citizens are not judged kindly by either their people or by history In the United States there are dozens of policies aimed at making it easier for Americans to own or rent housing. These range from national policies, such as the tax deduction of mortgage interest to the provision of subsidized housing in local communities. The fact that housing prices continue to rise faster than income and that a high fraction of families are stressed by housing costs--or they have no housing at all--tells us that much work still needs to be done.

One category of housing policies that are targeted explicitly at low-income households are known as affordable housing programs, and the housing units they subsidize are known as affordable housing. Collectively these programs form a key part of the safety net that provides part of the daily necessities of life to families, individuals and their children who are most in need. In Montana, those programs are oversubscribed and face daunting challenges.

The Bureau of Business and Economic Research recently delivered a comprehensive report of those challenges (Bridge, 2020). This article highlights the findings of that report.

Affordable Housing Programs in Montana

There are currently over 23,000 housing units in Montana that are supported by one or more affordable housing programs. This is a substantial number, yet in comparison to the more than 510,000 housing units of all kinds in the state, it is clearly a tiny segment of the market. That number is also low relative to potential demand, amounting to 39% of the number of households who earn extremely low incomes, defined as 30% or less of local median income.

Most support for housing subsidies comes from federal government programs, often with state match and state participation. The success or failure of these programs can hinge on how successfully states pursue this federal support.

The most important of these programs in Montana include:

* The federal Low-Income Housing Tax Credit (LIHTC) program awards nonrefundable tax credits to developers (who then sell them to investors) to raise cash for construction of units with restricted rents. There are currently 7,977 apartments for rent in Montana that were developed using the LIHTC program as the majority funding source, including new and rehabilitated units.

* There are 11 local housing authorities in...