HomeMy WebLinkAbout07-12-17 Public Comment - B. Maxwell - Affordable HousingFrom:Blake Maxwell
To:Agenda
Subject:7 ways the City"s new affordable housing mandate will make housing LESS affordable
Date:Wednesday, July 12, 2017 1:46:45 PM
Diving right in:
1. The program requirement that homes be single-family to qualify as
“affordable housing” drives us back toward the form of housing that uses the
most land and most materials per square foot.
Even as demographics from the eldest to the youngest buying groups in theBozeman marketplace—including retirees, empty-nesters, small families, lonehowlers, young professionals, and entry-level buyers—have demonstrated a strong
preference for medium-density housing within walking distance of amenities, the
Bozeman City Commission is stuck in yesteryear, mandating the one form of
housing that wastes more land and material than any other: Single-family homes. The highest cost per square foot is, of course, directly linked to the highest cost of
housing.
2. Infrastructure to reach new single-family housing is more expensive.
If there was any doubt, I recently verified with Bozeman’s widely respected
Director of Public Works, Dr. Craig Woolard, that the steep, recent rise in costs for
Bozeman streets and infrastructure is directly linked to the extended resourcedemand of new single-family neighborhoods.
Though already high enough to attract lawsuits, impact fees only offset so much of
that annual column on the City spreadsheet. In the long-term, Bozeman taxpayers
as a whole will bear a much greater burden in creating the infrastructure of roads,
water, and sewer to reach the long avenues of wasteful, late-20th-Century-stylehousing. As these systems age and maintenance costs are factored in, the total
expense to the community will be compounded.
3. Single-family housing pays lower taxes per acre than all other forms of
housing.
Consider the 10-year-old North Black Row townhouses against the three single-
family houses directly across the street. For the townhouses in the 300 block ofNorth Black Avenue, the collective value for all five units, according to Montana
Cadastral in FY 2017, is $2,642,813. Across the street, Cadastral’s numbers for the
three detached homes add up to $1,136,900. Also note that the total square feet of
land for the single-family homes is 21,390 (about half an acre). North Black Rowcovers 13,902 square-feet, or 35.9% less.
4. Bozeman’s “affordable housing” mandate disincentivizes development,hindering supply and increasing housing costs.
If developers are to be penalized for building more than 9 units, they will look to
mitigate the already significant financial risks of housing development.
Consequently, they are more likely to build 9 for fewer units, develop beyond citylimits, or forgo the development completely. Before considering the added woe ofoffsetting the loss of the “affordable” 10th unit, the project concept worksheet will
have less economy-of-scale advantage and a higher cost per square foot. With
fewer new homes in the marketplace—regardless of the price-point of the
development—any decrease in supply will also drive up prices across the market(assuming demand is constant).
5. Fewer new housing units in a growing community ignites Bozeman's
property tax crisis.
It is widely agreed among civic administrators today that when population growth is
above 2%, property tax assessments (and property taxes) can’t keep up with the
needs of the community, so taxes go up. In Bozeman, a history of wastefulspending practices, “high-amenity” hogwash, and supercharged pension programs
favored by city management and endorsed every June by (you guessed it) the City
Commission, caused the Bozeman property tax RATE to increase by 28% from
2007-2016. New special assessment taxes are up 259% over the same decade,while the property tax BASE went up 77% in just five years.
6. Higher taxes and fewer newer units in Bozeman prompts higher rents and
more unsafe rental properties.
Homeowners in Bozeman are already caught between a rock (a history of low
income) and a hard place (slow income growth), so they can’t keep pace with ever-
more-expensive housing nor the incendiary property taxes. Consequently, they alsocan’t absorb the increased tax burden of the homes they now live in. Besides
selling out and moving to ???, the only fallback they have is charging higher rents
for bedrooms, basements, and ADUs. In many cases, these rental properties are
dated or altogether unsafe, and the property owners lack the cash flow necessary forimprovements.
7. Any diminishment in the supply of homes produced in this area will hit
hardest the young adults of our community.
Less construction and lower profit margins for developers will translate into fewerjobs and lower wages in the building trades. Considering that construction and realestate comprise the second-largest business sector in Bozeman, any significant
impact on that labor force will prompt losses in building material sales in addition
to market loss for retail and food & beverage. The latter two categories are vital totourism, another key business sector in Bozeman.
8. BONUS!! High rents and low wages are already skewing MSU's graduation
rates for Montana kids, putting at risk long-range goals for the community andstate.
Factoring high rents, a proliferation of unsafe units, and less jobs available in fields
like retail, F&B, and construction, fewer students who depend on income (like thosewho are native to Montana) will be attracted to MSU. Already, these factors impactthe percentage of Montana high school grads attending the state's "flagship
university" here. If enrollment as a whole should drop vis-a-vis Missoula, so goes
the employment packages of university staff and faculty. In either event, a cultural
and economic cornerstone for both Bozeman and Montana is under threat.
-- Blake Maxwell