The city of Missoula and the University of Montana are moving forward on their search for a developer to create hundreds of new student housing units, and they hope to have a deal in place soon.
Missoula Mayor John Engen and UM President Royce Engstrom agreed in December to a new quality of life initiative that, among other things, will address the city’s shortage of student housing.
The initiative calls for 1,000 new units to be built and rented near the university by the close of 2014. The housing likely would be created through a public-private partnership, though the private players haven’t been named.
“I’ve had talks with three organizations that do what they call purpose-built student housing,” said Engen. “The university has had conversations with one of them. We’re marching down a path now and I hope to have some decent news in the near future.”
Engen said the housing project would likely be built in the downtown area. Not all 1,000 units would be constructed at one location, but rather they’d involve two or three smaller projects providing several hundred units each.
“My goal is to have this housing in an appropriate place in the proximity of campus,” said Engen. “There are some locations downtown that could provide that – the mill site and East and West Broadway. For a creative entrepreneur, there are a lot of opportunities, though I don’t imagine 1,000 units all in one building.”
Supporters believe the effort to provide additional student housing could help lower rental costs across the market and relieve pressure on neighborhoods, where residents have watched owner-occupied homes give way to a growing number of rentals.
Many homeowners believe that has changed the quality of life in some neighborhoods. They also fear it may threaten the value of their investments if the trend continues.
“This effort is all about trying to relieve pressure on neighborhoods,” said Engen. There’s an opportunity to do that here.”
While UM and various student groups have taken steps to improve neighborhood relations by picking up trash after football games and growing the school’s ambassador program to deal with issues, most agree that a more permanent fix is needed.
Brent Campbell of the WGM Group said the push for more student housing could help resolve many issues facing university-area neighborhoods.
“The fact that we haven’t added a huge amount of campus housing has led to a bit of a shortage in student housing, and that’s put pressure on Missoula’s neighborhoods to meet that demand,” said Campbell. “Having more student housing would provide some relief to the neighborhoods, and I think it will affect the cost of housing and bring it down.”
In its latest housing report, the Bureau of Business and Economic Research at UM found that 38 percent of Montana renters spend more than 30 percent of their cash income on housing.
The problem is worse in Missoula, with 52 percent of all renters spending more than 30 percent of their income on housing. That makes Missoula the most expensive major market in Montana for renters.
“Most recently, there appears to be a shortage where vacancy rates are low,” Campbell said. “When they get low, you start seeing apartment complexes in Missoula come online. We’re back in one of these bubbles where we’ll start seeing new multifamily units come online.”
Over the past few years, Campbell said, the rental demand has largely been met. New duplex and multifamily housing units in Missoula have steadily decreased since 2002, according to the business bureau study.
But last week, the Farran Group broke ground on a new 224-unit apartment project off Russell Street. That project alone outpaces the multifamily units built in Missoula in all of 2009 and 2010 combined.
While not necessarily classified as student housing, Campbell said more student-oriented projects may follow, including the 1,000 units envisioned by the city and the university in their quality of life initiative.
“That’s a good strategy by the university and the mayor, working this way to deal with this issue,” Campbell said. “The (accessory dwelling unit) issue maybe becomes less of an issue if there’s less demand to convert a garage to an apartment.”
Reporter Martin Kidston can be reached at 523-5260, firstname.lastname@example.org or @martinkidston.