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Missoula’s proposed new housing policy received mixed reviews during a public hearing Monday night in front of the City Council.

Many people praised the plan, calling it a visionary and impressive document, created after meetings with 3,000 people, which will finally better provide affordable housing. However, others said the plan was created by politicians and the development community, which would benefit from many of the incentives included in the plan.

In a letter to the council last week, Derek Goldman urged them to send the draft housing policy back to the Committee of the Whole for more work, and asked for public hearings and presentations of the policy in each neighborhood. He believes that simply building more homes won’t solve the affordable housing problem, and the city needs to research, draft and implement inclusionary zoning now “before all the remaining available buildable space is built upon and forever consigned to the free market stock of housing.”

Goldman also asked the city to address the short-term vacation rentals before adopting any proposed relaxation of building codes and development standards, which he said removes housing stock from the long-term workforce rental market. In addition, Goldman and others asked that the Urban Renewal Districts be required to set aside a portion of Tax Increment Financing funds for permanent affordable housing.

“Remember that all housing created with some amount of public funds, tax incentives or other public subsidy must be permanently affordable, through deed restrictions or some other means, to ensure that the public’s investment will be durable and that we are not subsidizing someone’s private capital gain,” Goldman wrote.

Mandatory inclusionary zoning didn’t sit well with others. Construction company owners, including Steve Laber, fear that a mandate will create an undue burden on developers and in the long run won’t work.

“Whitefish and Bozeman have recently enacted inclusionary zoning regulations and although it is early, they have not had the success that they hoped,” Laber wrote in a letter to the council. “History shows that in the long run it does not bring about the results intended.”

Eran Pehan with the city's Office of Housing and Development wrote in the 95-page housing report that mandatory requirements aren't a good fit for the Missoula market, and reiterated the reasons why Monday night.

She noted that Montana state law precludes cities from regulating landlords and how much they charge for rent, and that it could have unintended consequences.

"Inclusionary zoning acts as a tax on housing production," Pehan said, adding that the communities end up subsidizing homes built using the mandatory low-income houses, saying it leads to "high investment" costs with low outcomes.

Pehan said it will come back before the council as the bits and pieces are more thoroughly investigated, and that some of the policies may not be developed.

Members of the Missoula Interfaith Collaborative and the Montana Home Coalition, which worked closely with the city on developing the policies, applauded most of the report, but wants to ensure the actions take shape and be implemented by the city. They also want a public report on the findings of an inclusionary zoning study groups mentioned in the report, so the approach can be better understood and considered.

“We will also be asking the city to support the prompt creation of a citizen advisory board to continue evaluating inclusionary zoning as a viable tool for our city,” the group wrote in notes provided to the Missoulian.

In May, the City of Missoula unveiled its policy proposals to alleviate the severe affordable housing shortage. The wide-ranging recommendations included allowing higher-density buildings in single-family home neighborhoods; decreasing requirements on parking as well as Accessory Dwelling Units; reducing setback and infrastructure requirements on new developments; and a taxpayer-funding housing bond.

Pehan released the 95-page document with the hope it would “reduce barriers to new supply and promote access to affordable homes.” A report issued in March noted that the median home sales price in Missoula has increased by nearly 40% in the past decade. Renters’ costs also have increased, while their income decreased 4.5 percent. Almost half of the people within Missoula are renters.

Specifically, some of the recommendations include:

• Reducing the city’s 3,000-square-foot minimum lot size for home ownership projects;

• Expediting the review of development applications for below-market housing projects;

• Expanding the city’s support of housing services, including developing financing tools to preserve mobile homes and existing affordable housing;

• Setting goals for Accessory Dwelling Unit construction;

• Creating an affordable housing trust fund to help lower-income residents either buy or rent homes.

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