A plan to build an affordable “tiny home” community near the Missoula Food Bank moved forward on Thursday.
The Missoula Redevelopment Agency’s board unanimously approved reimbursing a local nonprofit, Homeword, up to $93,673 in Tax Increment Financing to get the site for the homes ready. The money will go toward water and sewer extensions, irrigation ditch modifications, curb and sidewalk improvements and professional services.
Two years ago, Homeword purchased 10 small manufactured homes that were supposed to have been used in the Bakken oil fields before the downturn in the oil market. They are currently being stored at the city’s wastewater treatment plant.
The plan is to put five two-bedroom homes and one one-bedroom home on foundations on the lot and spruce up the area with a community garden and other amenities.
The two-bedroom, 550-square-foot homes will be sold to households earning up to 80 percent of the area's median income of $56,400 for two people or $70,400 for four people. The one-bedroom home, at 450-square-feet, will be sold to someone earning 100 percent of the area's median income.
The land will be owned by a Community Land Trust, which will keep the units affordable.
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The original goal was to sell the two-bedroom homes for $100,000 and the one-bedroom for $89,000, but Homeword housing development director Heather McMilin told the board that tariffs on construction materials like steel, aluminum and lumber instituted by President Donald Trump have increased construction costs drastically in the past few months.
“Everytime somebody tweets something out, prices go up,” she said. “In today’s market it’s damn near impossible to estimate construction costs. We are hoping to attract smaller contractors, but the cost of materials are just outrageous right now.”
Nationwide, new housing starts recently hit a nine-month low according to the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce. Many experts have attributed that to the rising cost of construction materials.
McMilin said there were a lot of cleanup costs associated with the land, because it was a former car lot and repair site. However, she said because of Missoula’s affordable housing crisis, where prices have risen more than 30 percent since 2010 while wages have stagnated, there is a long waiting list of people hoping to buy the homes.
Even if the two-bedrooms have to be sold for around $125,000, she thinks there will be strong interest.
“This project presents MRA with the opportunity to assist with the provision of six new, permanently affordable, owner-occupied housing units at a time when home ownership for low- and middle-income households is a major challenge in Missoula,” MRA director Ellen Buchanan told the board.
“HomeWord has numerous income-qualified housing projects across the state of Montana, including several in Missoula with MRA assistance. They have an excellent track record for providing affordable housing that is energy efficient and has amenities that exceed much of the market-rate housing being constructed today. Their architectural and engineering designers have a record of successful completion of MRA funded projects.”
The board approved the request unanimously, with member Natasha Jones absent.