sweetgrass commons file

The Missoula Redevelopment Agency spent $488,000 in tax increment financing to purchase a parcel of property for Homeword's 27-unit Sweetgrass Common, shown in this 2016 file photo. The MRA sold it to Homeword for less than half that price.

A city agency has approved separate funding requests to speed up the implementation of an affordable housing policy and also to promote economic development.

The Missoula Redevelopment Agency’s board of directors took what one member called "proactive" action on Wednesday for two critical community goals.

First, the board voted unanimously to approve committing a total of $90,000 spread out over the next three years to partially fund the creation of a new position in the Office of Housing and Community Development. The money will go to promote a staff member to a position that will focus on implementing the city’s 95-page housing policy called A Place to Call Home, which is a broad range of suggestions aimed at alleviating the severe affordable housing shortage here.

The agency’s contribution will be matched by one from the city’s general fund, and the staff member’s old job will be backfilled by another hire. Mayor John Engen called it "adding horsepower" and "creating capacity" in the office.

Ellen Buchanan, the director of the MRA, said she and her staff believe that the agency “has played and will continue to play a significant role in addressing the shortage of attainable housing in Missoula,” according to a memo she wrote to the board.

“The creation and implementation of housing policy by the City will help guide how the MRA invests (Tax Increment Financing) funds in the most efficient and effective ways,” she said. “It is very much to our advantage to have this policy implemented as quickly as possible and there is not sufficient depth in (the housing office) to accomplish this in the desired time frame without adding staff. Every Urban Renewal District will benefit from the implementation of this policy as they all have a role to play in the housing puzzle.”

She said there is more than enough money in all of the districts to absorb $30,000 a year for three years.

Acting board chair Nancy Moe agreed.

“I would just like to note the MRA’s continued support for housing policy, and affordable and attainable housing,” she said. “And I am glad to see the progress that’s been made to this point.”

Eran Pehan, the director of the city’s housing office, said there is a very qualified staff member who will now be allowed to fully focus on implementing the housing policy.

“The implementation of the housing policy will include the creation of dozens of new policies and procedures,” Pehan said.

She said many of those will require a lot more research and community outreach, and her office lacked the capacity to do that right now.

Some of the things the new staff member will focus on will run the gamut from a mobile home displacement policy to the development of an affordable housing trust fund.

There could also be code amendments and an incentive program.

The board also unanimously approved providing $50,000 in funding to the Missoula Economic Partnership (MEP) to develop a “proactive” package of potential projects and tools to attract new investment in the Missoula Opportunity Zone. The Opportunity Zone was created by the 2017 Investing in Opportunity Act, and developers and investors can realize significant capital gains tax breaks by investing in development in the area.

Missoula’s zone includes most of the Westside and Northside neighborhoods, and overlaps with portions of the Scott Street/North Reserve Urban Renewal District and Urban Renewal District II. Both Grant Kier, the executive director of the MEP, and Buchanan said that developers are showing strong interest in taking advantage of tax incentives from both Opportunity Zones and Urban Renewal Districts.

“Cities across the country are taking proactive steps to position themselves to maximize the investments that will come from this tax incentive,” Buchanan wrote to the board. “MRA has been a partner in the two previous Developer’s Showcases where the main incentive that we had to offer was TIF (tax increment financing) assistance. We are now able to pair that with the Opportunity Zone incentives, which is a game changer if we engage in this partnership and can create the tools that we need to attract investors.”

The money will be used to partner with the MEP to identify up to three potential sites that could be redeveloped in Missoula’s zone where tax increment financing is also available. Buchanan said investors get better tax breaks by investing earlier in the zones, so “time is of the essence” and having a list of sites and a rundown of what work is needed at each site will make them much more appealing to investors.

Board member Ruth Reineking said she was pleased that both projects were “proactive,” rather than reacting to proposed developments. Chris Behan, the MRA’s assistant director, pointed out that rather than aiding “big developers,” both projects were geared toward helping the entire community.

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