Slowly but surely, the most affordable type of housing is disappearing in Missoula County.
Since 2011, nearly 300 mobile homes have been lost here, according to Missoula County tax records. As the economy in Missoula keeps up a fiery pace, housing and land for sale are in short supply. That’s led to record home prices for the last few years, and developers are seizing every chance to snap up large chunks of land in order to build homes, condos and townhomes.
Often, the cheapest land to redevelop comes in the form of mobile home parks. Piece by piece over the last few years, those lots across the city have been quietly demolished and redeveloped.
Bob Oaks, director of the North Missoula Community Development Corporation, said the homes replacing them are generally going for more than $300,000.
"So you're replacing affordable housing with that, and I don't know who the hell in Missoula can afford that," said Oaks, whose organization uses a land trust model to create permanent affordability.
In 2014, the residents of 21 mobile homes at Hansen’s Trailer Park on Third Street were evicted to make way for an upscale apartment complex.
In 2017, the residents of more than 30 trailers in the Skyview Trailer Park on the Westside were evicted. The city plans to use that land to build 72 units of affordable apartments for low-income residents, but at the time, the people who lived there were displaced.
Recently, the private nonprofit Sussex School near the Good Food Store put up a parcel of land it owns for sale for $600,000. The acre of land, at 304 S. Garfield St., contains 11 mobile homes. The property is under contract to be sold, but it's unclear what a potential new owner would do.
Eran Pehan, in the city’s Office of Housing and Community Development, said mobile homes not only represent a large segment of existing affordable housing in Missoula, they are also one of the “most threatened types of affordable housing due to high pressure of redevelopment.”
“Owners of mobile homes, who tend to be people with low incomes, also face a higher risk of displacement," said Pehan, the city’s housing office director, in a recent report to the Missoula City Council. "When mobile home parks are bought for redevelopment, Missoulians with lower incomes are faced with the costly challenge of moving a mobile home, often with very few options for relocation."
"Functionally, many people in this situation are forced to give up their home.”
According to Missoula County treasurer Tyler Gernant, the county sent out tax bills to 4,798 mobile homes for the tax year 2011. In tax year 2019, the county sent out 4,506 bills. That’s a decline of 292 mobile homes in eight years, an average of almost 37 mobile homes gone every year. And the pace seems to be accelerating. Between 2018 and 2019, the county lost 46 mobile homes.
In an effort to combat the rising home affordability crisis in Missoula, Pehan’s office spent two years compiling a broad set of policy recommendations that will be discussed by the city council this summer. In the recently released report, Pehan and her staff said the city should support development of new financing tools that could assist in affordable housing preservation.
“The primary mechanism for preserving mobile home affordability is through the Resident Owned Community (ROC) model,” the report states. “In this model the land is purchased by the park residents, who then operate the park much like a land trust, owning the land collectively. There are existing land loan financing products available to help support this model with current terms at around 6% interest with 30-year amortization.”
However, the report acknowledges that the main challenge for the resident-owned community model is that it’s only feasible when there is both an amenable seller and the mobile home park is moderately priced, typically because it isn’t facing high pressure for development.
“This means that the ROC model is currently more successful in rural areas of Missoula County and has limited applicability within the city limits,” Pehan wrote in the report. “One way to make resident-owned community models more competitive would be to create a land loan product with flexible financing terms. This would help the ROC model compete more aggressively with private capital investment. Lower interest rates or longer amortization periods would be needed to make the ROC model cash-flow for more expensive acquisitions.”
Pehan, who was unavailable for comment on Friday, wrote in the report that the city should explore options for loan guarantees to help develop and attract resident-owned community land loan products that offer lower rates or longer amortization periods than currently possible.
Sussex School has owned the trailer park property across the street since 2008 and decided to sell it recently, according to co-director Joellen Shannon.
“It hasn’t been a lighthearted decision. However, it’s a necessary one,” she said. “We are really not in the housing business.”
The residents of the trailer park were notified this week that the land beneath their homes is for sale. A potential buyer could theoretically keep the homes in place, but because housing prices in Missoula have soared nearly 40% since the beginning of the decade, the land could also be redeveloped.
The school was recently gifted a parcel of land to the north of the school, which will be used as vacant play space for the time being. That spurred the school's board to sell the land to the east, where the mobile homes are located.
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“We don’t have any plans for expansion at this time,” Shannon explained. “Frankly, we don’t have the funding in place. The gift of the land was not something we had planned for or knew about.”
Kia Peterson, assistant director of the affordable housing development nonprofit NeighborWorks Montana, said her organization may try to convince a potential buyer to allow the residents to purchase the land.
"One of our staff did have an extensive conversation with the Sussex board," Peterson said.
The school's board ultimately decided to list the property for sale and let a new owner decide what to do with it.
The one-acre property is under contract to be sold, according to real estate listings, but the deal hasn't closed, and it's unclear what the potential buyer's intent would be.
"Resident ownership is an incredible model, and I encourage any property owner to look at it as a real opportunity to get a return on investment and contribute to affordable housing in our community," Peterson explained. "What is most frustrating to me — and I have the hardest time with — is when a property owner says 'I don't want this to continue as a manufactured home park' even if it's a viable use of this land."
Peterson said she has questions about the judgments property owners make about people living in mobile home parks.
"My feeling is there's a lot of assumptions and not a lot of knowledge about who they are and why this is important, and I would love to elevate the conservation about that in the community," she said.
There's still a "slim chance" the Sussex mobile home park could be purchased by the residents, but Peterson said that with the listing price at $600,000, the price per lot would be more than $55,000.
Typically, NeighborWorks has found that the price per lot has to be less than $45,000 for the resident-owned community model to be financially viable.
"In Missoula, because the way the market is changing, many of the properties are being listed with the idea they're going to be redeveloped," Peterson said.
Her organization wants to at least give the residents "a shot" at owning the land, letting them make the choice even if they have to raise their lot rents significantly to make it work.
"Part of our job is bringing the right financing to a project like this to make it affordable, and one way to do that is local dollars and investors willing to get a lower rate of return for a higher community impact," Peterson added. "It can make a big difference."
This year, the Montana Legislature passed a bill that would exempt the oldest and least valuable mobile homes from property taxes in an attempt to keep people from being evicted for bills as low as $150. However, the law doesn’t take effect until 2020, and property taxes are rising on mobile homes, as they are for most other property owners in the county every year.
In 2019, the taxes on mobile homes in Missoula County averaged $233.72, which is a 5.65% increase over the 2018 tax assessment, according to Gernant. The total amount of taxes the county billed on mobile homes was a little more than $1 million.
Oaks, with the North Missoula Community Development Corporation, said he's watched three fairly new mobile homes get torn down on North Second Street recently in order to make way for higher-end housing.
"Those are three that are just gone," he said.
His organization recently celebrated the completion of Lee Gordon Place on East Front Street downtown. That project is seven permanently affordable homes available for purchase to households earning at or below 80% of the area median income in Missoula, which is $56,400 for two people.
The nonprofit uses a land trust model to make homes affordable, meaning homeowners don't own the land beneath the houses but also don't have to purchase it. They've built 42 units since 2002 that have served 87 households. The Missoula Housing Authority is still planning to build the largest affordable housing unit in state history in Missoula's Northside neighborhood, which would include 200 apartments with multiple bedrooms in each.
Despite progress, Oaks still lamented the loss of mobile homes. He said he hopes the development at the Skyview site ends up serving the community, but on other lots, the pricey new homes are beyond reach for many in Missoula.
"Look at what's replacing them," he said.