Grunke Column: Housing Barriers Hurt Economy
The answer to your question is yes. And several of you have asked in recent months.
Is housing an economic development issue?
I’m here to tell you that it is.
If you’ve been reading the news lately, you know that affordable housing and overall housing availability is a significant issue in Missoula. Mayor John Engen discussed the lack of affordable housing at City Club’s annual State of the Community gathering.
Bryce Ward, an economist at the University of Montana’s Bureau of Business and Economic Research, focused on the disparity between Missoula’s average annual income and the skyrocketing cost of housing in another recent report.
Missoula County commissioners are considering zoning amendments that would remove some of the obstacles to residential development in the valley, again to encourage new construction.
And the Missoula Organization of Realtors is funding and directing a study of the city’s housing market, in collaboration with the Missoula Economic Partnership.
Thus, the questions I’m hearing about MEP’s interest in housing.
Here’s my longer answer: Missoula’s inaccessible housing market is one of the most significant deterrents to healthy growth facing the local economy.
All the pieces of economic growth must be present for the puzzle to go back together again.
First, we need skilled, well-trained workers to fill the jobs that we create. The Bureau of Labor listed Missoula’s unemployment rate at 3.4 percent in January, lower than the national average of 4.9 percent. So that means we have a labor shortage, particularly in construction and the skilled trades.
To continue creating good-paying jobs and grow our economy, then, Missoula will have to attract skilled workers – new residents – to the valley. And they’ll need a place to live.
The harsh reality is that Missoula’s workforce housing situation is dire. And I’m not talking about subsidized housing or low-income housing. It’s easy to conflate “workforce housing” with “affordable housing,” when what we actually are talking about is housing that is attainable for the average worker.
The issue isn’t only that housing prices have skyrocketed in the past five years. It’s that the supply of attainably priced housing doesn’t satisfy the demand.
In fact, first-time homebuyers in search of starter homes are competing with Missoula’s increasing contingent of retirees, who are downsizing and looking at the very same, smaller houses.
Because the supply of housing stock in this “starter” price range is unable to satisfy the demand, would-be first-time homebuyers can’t compete and end up renting or leaving – or not coming in the first place.
The retirees simply have more cash – they’ve often sold their larger, child-rearing home – and they have longer, stronger credit histories.
In our housing survey with the Organization of Realtors, a primary goal is to find answers to some of our community’s most pressing questions: What are the barriers to residential development in Missoula? And what do homebuyers want?
The study will include interviews with focus groups (to assess consumer demand and preferences) and developers (to learn why they’re not developing the land that’s available in and around Missoula).
The Missoula Economic Partnership views housing as an economic development concern because of its impact on employers’ ability to attract the workers needed to move their businesses – and our economy – forward.
To that end, we support efforts to create and incentivize a housing market where consumers have choices at every price point. Because, yes, attainable housing is an economic development issue.
James Grunke is president and CEO of the Missoula Economic Partnership. This column originally appeared in the March 26, 2017 edition of the Missoulian’s InBusiness.