Bulking Up the Missoula Housing Development Pipeline

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Maggie Collister

Bulking Up the Missoula Housing Development Pipeline

How Can Missoula Get More Housing in Development?

Not quite the answer we’re looking for.

Our most recent point in time survey shows an apartment vacancy rate of .38% in Missoula. Not only is housing hard to come by, it’s expensive – not just to buy or rent, but expensive to build. But there are solutions to the housing development conundrum in Missoula.

As we’ve said before, pointing fingers at outta-staters or developers gets us nowhere.

What are some real solutions that could propel more available housing units? Some cities offer incentives like tax breaks, reduced parking requirements, higher density allowances, and expedited permitting timelines to developers.

What does that mean in practice?

Tax Breaks 

Developers take the cost of building new housing and pass it on to the end users (the tenants or owners). If their tax bill is less, then the cost of housing for the end users should also be less. There are usually stringent agreements in place to assure that developers can offer housing at specific income levels.

Relaxed Parking Requirements

Depending on the size of an apartment in Missoula, developers are required to have at least one (and sometimes more) parking space per unit. But parking lots are expensive to build (and they cut into the developable space available for apartments). Some cities relax these rules to allow for more apartments with less parking spaces.

Flexibility for Higher Density

Part of Missoula’s housing crisis is simple: in a valley, there is less land on which to build. However, if a building has smaller units or more stories, a developer can maximize the number of units that can be built on one piece of land. Strong community opposition frequently derails the discussion around higher density apartment complexes. As noted here, higher density doesn’t have to mean monolithic high rises: it can mean better serving the “missing middle” with fourplexes or row houses.

Faster Permitting Processes

The Missoula Current reported that it takes, on average, 50 months to move a project through the City of Missoula development approvals process. For Missoula County, the average is 87 months. Local builders indicate that not only would faster approvals get more housing in development, but carrying costs could be decreased if approvals were expedited. Lower developer costs = lower housing costs to end-users. See Bend Oregon’s policy here.

These are just a few incentives being used by cities with similar housing issues. Find more data on Missoula’s vacancy rate in the Mid Year 2021 Housing Report, available for download next week.

Matt Mellott
Matt Mellott, CCIM/SIOR

Bulking Up the Missoula Housing Development Pipeline