UM Report – ‘Can We Make Housing Affordable in Montana?’
One of the most pressing issues in the state is the lack of affordable housing, and the University of Montana Bureau of Business and Economic Research is studying the many factors involved.
Associate Director Bryce Ward said overall, housing is somewhat unaffordable in Montana at this time.
“This is particularly true in markets such as Missoula and Bozeman, and also in the Kalispell area to some extent,” said Ward. “Prices are high, particularly related to income. Now, it’s worth noting that housing prices in various parts of Montana are still relatively cheap compared to other parts of the West. However, when you factor in the lower incomes in Montana, people tend to spend a larger percentage of their income on housing.”
Ward said the age-old issue of supply and demand leads the way in the discussion about housing in the state.
“We’re looking at what’s going on with the demand side, and then what’s going on in the supply side,” he said. “A lot of what makes housing so expensive is the price of land, and what makes the land that sits underneath so expensive is complicated. The cost of the house itself is fairly steady, but the land underneath is what makes it expensive.”
Ward said there are markets in Montana where housing isn’t quite as expensive, such as Billings, Great Falls, Butte and Helena.
Ward said the long term outlook is not optimistic as far as affordable housing is concerned.
“The long term outlook in the West is that more and more people want to live here,” he said. “As long as that happens, prices will tend to go up. Obviously, the question is at some point, so prices get so far outside of where incomes will support, will that arrest the growth? But, we haven’t reached that point yet. What do people do? They figure out a way.”
With that in mind, Ward said Montanans lead the country in entrepreneurism.
“The Kaufman Foundation puts out a ranking every year on the entrepreneurial environment per state, and Montana has ranked first for the past four years,” he said. “That Montana attitude that says ‘I want to live here, so I’ll just find a way’. Means they work several jobs, or put a weird career together, they just figure it out, because they like it here.”
Find information about the BBER here.