Author
Montana has been "discovered" by a number of movie stars, business moguls, baseball heroes and West Coast retirees eager to transfer the equity from their high-priced homes into equal or better residences with much lower price tags.
Others in the last two years have moved to this sparsely populated state to escape crime, overcrowding, pollution, earthquakes, hurricanes and other problems not prevalent in Montana. This in-migration combined with the almost total lack of new construction during the last 15 years has resulted in a major shortage of adequate housing, especially in the highly desirable western part of the state.
In a plea to the 1993 state Legislature to set up a special task force to deal with the problem, the Montana Association of Housing the Redevelopment Officials said that "Montana has a housing crisis in its major cities. Working families are living in tents in Kalispell. University students in Missoula and Bozeman are living in the lobbies. The student apartments that normally house these young people are already filled by permanent residents. These two items are only the tip of the crisis iceberg."
The association cites statistics showing dramatic increases of 50 percent to 100 percent in waiting lists for public housing in Billings, Great Falls, Missoula, Bozeman and Helena during the last two years. The green parts of the state, the lake country and western valleys are also inundated with those looking for a better quality of life. Multiple listing services in most cities report a decline in the number of homes available for purchase ranging from 16 percent in some cities to 40 percent in others, and prices are steadily rising.
When housing is in short supply and the demand is large, it is always those with the lowest incomes that are driven out of the market. It is not news that there are homeless people in this country, only that homelessness has finally reached "the last best place"--not that there haven't been homeless people in Montana, but they just haven't been on the streets. This has been primarily true because Native Americans, who make up a large portion of the state's lowest-income residents, take in their relatives and friends, no matter how overcrowded the situation may become.
Finally, the situation has reached such a proportion that it can no longer be contained, and more and more cities in Montana are reporting homeless people. With rents escalating rapidly, an increasing number of families are requesting subsidized housing, and officials anticipate the situation will worsen steadily during the second half of 1993.
I direct a small non-profit that revitalizes neighborhoods, primarily by repairing and building houses and promoting home ownership. Our organization is one of 183 in the national NeighborWorks affordable housing delivery network working in 356 neighborhoods. We find in Montana and nationally it is not only a lack of money allocated to housing but also the excessive and cumbersome regulations that prevent available funds from "getting on the street" in a timely and cost-effective manner. A prime example is the Department of Housing and Urban Development's new housing program. Of the $2.5 billion allocated for 1992 and 1993 only 4.5 percent has been expended because the program is too complex. Since these funds will be highly leveraged and are primarily used to provide the "gap" financing necessary to make projects doable, the economic impact would be significant in terms of jobs and material purchases, as well as making a dent in the housing shortage.
In contrast to the almost inoperable HUD programs, the Federal Home Loan Banks (FHLBs) Affordable Housing Program, mandated by Congress in 1989, has been one of the true bright spots nationwide in providing housing. The program operates in a timely manner. Applications are concise, funds are awarded in approximately one month and FHLB is focused on results, not minute regulations. The FHLB of Seattle with which we have worked has had an impressive track record. In two-and-one-half years they have expended $10.4 million, leveraging $154.9 million to provide 3,124 units of affordable housing.
Our NeighborWorks organizations have found that nationwide it takes approximately $2,700 in down-payment grants to help creditworthy, stable- income families make the leap into homeownership. In Montana that figure is only $2,000. Frequently, the families have been paying more in rent than the house payments.
The commercial banking system currently expends a great deal of money trying to meet the requirements of the Community Reinvestment Act (CRA), which requires financial institutions to meet the credit needs of the entire community that they serve. It does so through elaborate plans, consultants, advisory councils and staff salaries. It is my strong belief that if these banks could find a way to direct the monies into home-ownership grants and projects, they would raise their CRA ratings, lower their frustration level and probably save money.
There is nothing quite like helping a single mother, who has completed her education and worked her way out of public housing, to buy a home. Thanks to the FHLB programs, we have been able to help three such mothers in the last year. Many deserving hard-working single parents, handicapped individuals and minority families have benefited from the creative approaches designed by local lenders, non-profits and developers.
