HomeMy WebLinkAboutWARD Housing presentation 20250418 DFIncome to Afford the Median Home
0%
50%
100%
150%
200%
250%
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
2016 2017 2018 2019 2020 2021 2022 2023 2024
Income Required to Afford the Median Home
Median Home Price 100% AMI for Family of 4 Required Annual Income % AMI for Family of 4
Bozeman 2016 2017 2018 2019 2020 2021 2022 2023 2024
Median Home Price $359,500 $381,500 $427,500 $460,000 $540,000 $700,000 $755,000 $767,500 $784,500
100% AMI for Family of 4 $74,200 $71,000 $81,200 $90,300 $90,400 $88,900 $104,700 126,400 109,000
Required Annual Income $81,529 $88,594 $103,228 $104,448 $112,290 $142,147 $201,902 $219,205 $227,162
% AMI for Family of 4 110%125%127%116%124%160%183%173%208%
Housing Demand Projection
Affordable Housing Action Plan 2019
Population and Housing Growth
EPS 2024
Deliveries & Vacancy
Average Monthly Rent
Rents Lag Deliveries
Home Ownership Income Gap
For-sale Home Prices
and Land Cost
Average Lot Prices -Gallatin Association of REALTORS, Single Family Homes
2020 $145,861
2021 $324,750
2022 $396,000
2023 $311,873
2024 $256,479
Average Sales Prices -Gallatin Association of REALTORS, Single Family Homes
2020 $784,017
2021 $905,011
2022 $865,114
2023 $886,845
2024 $879,158
Feasibility of
Affordable For-Sale Homes
Where Does Housing Come From?
Image Credit: Priceonomics
Where Do Housing Costs Come From?
•The cost of inputs drives
housing costs.
•Demand increases the cost of
inputs.
Housing Cost Inputs
•Land
•Lumber
•Labor
•Leverage
•Water rights are essential for housing, but not a major cost driver
No Affordability Without Subsidy
7th and Aspen Project
How to Pick an Affordability Target
Root Policy Research 2021
Root Policy Research 2024
Feasibility of
WARD Affordability Target
“Bozeman faces a severe lack of affordable housing.
Therefore,the requirement of 33%affordable units to
satisfy the city’s water adequacy requirement is justified to
begin to combat this at a faster rate than 5%,15%,or 20%.
Additionally, this figure challenges developers to include
more affordable housing to receive the benefit of CILWR,
the main way for developers to get sufficient water access
to create more residential developments.”
How do we know an infeasible
affordability target does not work?
•City Experience with Inclusionary Zoning
•10% affordability requirement
•16 units
•Most developers paid cash-in-lieu
Regional Housing Market Demand
Will WARD Cause Sprawl?
Source: U.S. Census, On the Map, 2022
What are the effects of WARD on
Future Tax Revenue and Tax Rates?
•Newly taxable value spreads the tax base over more properties
•Tax generation from existing properties are capped and do not
keep up with inflation.
•Increased home costs and property values may result in higher
taxes.
What are the effects of WARD on
Economic Development?
•Housing is essential for
attracting and retaining talent
•Construction industry
represented 6,413 of 59,071
Gallatin County jobs in 2020
Summary of WARD Impacts
•May increase taxes
•May inhibit talent retention and attraction
•May promote sprawl
•May increase home prices by constraining supply
•May increase rents by constraining supply