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HomeMy WebLinkAbout08-23-22 Public Comment - S. Kirchoff - PUD changes and affordable housingFrom:Steve Kirchhoff To:Agenda Subject:PUD changes and affordable housing Date:Tuesday, August 23, 2022 1:29:40 PM CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Dear Commissioners, I hope this message finds you well and enjoying the dog days of summer. You allface a difficult, uphill slog trying to find ways to provide affordable housing inBozeman and I wish you good luck and good judgment as you move forward. I amwriting to share one thought with you on this subject, and that is I hope that you willconsider broadening your inquiry into causes of the affordable housing shortfall. An impression I get is that the commission has concluded that shortage of housingsupply is a major, if not the major, cause of the lack of affordability: Demand is highand supply is low, so prices have skyrocketed. Another impression I get is that the commission is trying to manage this problemby increasing housing supply in whatever way it can. The commission has endorsedefforts to allow "departures" from code, to repeal and amend requirements of thePUD process, to revise the affordable housing ordinance, among other things—someof which may be wonderful, some of which threaten the heart and soul of our city. My thought for your consideration is simply this: Low market supply of housing mightnot be the most significant factor accounting for the skyrocketing cost of housing inBozeman. We have to remember that affordable housing is a global crisis, afflictingincreasing numbers of cities and towns in every continent. And I doubt very muchthat the usual suspects—pandemic-related supply chain shortages, increasing cost ofmaterials, and labor shortages—explain housing price increases in so many cities andtowns across the planet. There is another, hugely important factor. In the last decade real estate has emergedglobally as a principal investment asset for investors of all kinds, institutions andindividuals included. From 2016 to 2020 the total value of real estate worldwide isestimated to have surged by $90 trillion(Source https://www.savills.com/blog/article/216300/residential-property/howmuch-is-the-world-worth.aspx). To put it briefly, I believe you are right to identify "themarket" as your adversary in providing affordable housing. But I don't think it'scorrect to believe that the market's main problem is its inability to providesufficient housing supply. More meaningful questions for Bozeman residents andleaders like you are: Who is buying Bozeman's residential units, and for whatpurpose? I believe that in Bozeman, as in so many other places on the planet, investors—whichis anyone or any institution that considers housing as an asset for amassing wealth—are skewing residential real estate prices upward. Investors see housing as a meansof making money grow; while you and I (I hope) consider housing to be a shelter toprotect individuals and families and to promote their safety and our community'sflourishing. My encouragement to you is this: dig more deeply and find out more aboutBozeman's housing stock. How many residential "units" are not being used as homes,but as assets? I believe that you need more extensive and more accurate information about Bozeman's current housing stock. I encourage you to seek a larger understanding of Bozeman's housing inventory, especially ownership of all forms of housing, rental and non-rental alike. If you knew how many residential units of all kinds were occupied by year-round residents versus being purchased and sold as investments, you would have a better grasp of the reality of "market forces" beyond supply-and-demand concerns, and you could make very well informed choices going forward. If you knew how many residences—apartments, condos, townhomes, single family residences, SFRs and etc.—were held as second-, third- and fourth- and one thousandth-properties, how many were owned by institutional investors, equity firms, pension funds, and investment-minded individuals, you would be better positioned to implement ordinances that steer new residential growth toward the needs of current and working residents. Greater transparency of ownership patterns in our housing market will enable more accurate solutions to problems. You need to know more. No one that I have talked to seems to know this information with any depth. I don't know, either. Could the governor's housing task force recommend allocating dollars for such research to be conducted in Bozeman and other fast-growing Montana cities and towns? Meanwhile, it seems counterproductive for the commission to continue on its deregulatory course in hopes of speeding up growth in residential housing, since the deregulatory changes provide slight and sometimes zero assurance that they will achieve significantly more affordable housing. Again, I wish you the best of luck and good judgment as you take on a serious problem in our community. Sincerely Steve Kirchhoff