Welcome to The Agenda with the Missoula County Commissioners

New name, same great local government podcast. We’ve rebranded to The Agenda! 

With 67 episodes and more than 7,000 downloads since it launched in 2021, the commissioners' podcast was due for a refresh. If you’re already subscribed, there’s no change to how you listen.

This week, Commissioners Slotnick and Strohmaier sat down with Missoula County Housing Specialist Garrick Harmel to talk about what local government can do to reduce displacement while incentivizing the construction of affordable places to live.

Related links:

• Housing Innovation Fund
• Housing Action Plan: Breaking Ground

Thank you to Missoula's Community Media Resource for podcast recording support!

Transcript

Josh Slotnick: [00:00:10] Hello, everybody. We're back after a hiatus with some exciting news, we've rebranded this podcast. We're saying goodbye to Tip of the Spear and hello to The Agenda with the Missoula County commissioners.

Dave Strohmaier: [00:00:21] "The Agenda," not the hidden agenda!

Josh Slotnick: [00:00:22] Just the agenda. I'm Josh Slotnick and I'm joined by my fellow county commissioner and friend, Dave Strohmaier. Our fellow county commissioner. Juanita Vero is off this week so she won't be joining us. But in today we have Garrick Harmel, our housing specialist, to talk about. I'll say one of the biggest topics facing everybody in Missoula County, everybody in the state, and that's housing. So thanks for joining us, Garrick.

Garrick Harmel: [00:00:45] Thanks for having me.

Dave Strohmaier: [00:00:46] Talk to us about your role and what it is that you do for Missoula County.

Garrick Harmel: [00:00:51] I am the housing specialist for Missoula County. Missoula County initiated Breaking Ground, which is Missoula County's Housing Action Plan back in February of 2022. And it is a guiding document that allows us to strategically focus on housing initiatives and different initiatives to create housing opportunities specifically in the county. So my role is to essentially implement that plan, but also to more specifically help local partners keep people in their existing homes and support the development of new housing units in the county. We're trying to do this by creating a range of housing options and opportunities through partnerships and using county tools.

Dave Strohmaier: [00:01:33] It's a big job.

Josh Slotnick: [00:01:34] So Garrick, what are some of the things you're working on to get us to more affordable housing?

Garrick Harmel: [00:01:39] That's a really good question. And so I like to think of this in sort of two different overarching themes to think about for housing. And so Breaking Ground has a lot of different goals and initiatives that we can actually try and implement and support. And I think that you could sort of whittle them down into two different things. So what the county is currently doing to keep people in their homes and how we can create new affordable housing units. So if you just take those two basic ideas, I think that all of the programs, all of the different initiatives, all of the different strategic partnerships sort of fit within those two things. I wanted to take a step back and say there are things that the county is currently doing to keep people in their homes and then what the county can do to also create new housing development. So first off, we fund housing organizations and projects on an annual basis. We do this. So, for example, this year through the Community Assistance Fund, we're funding $750,000, which will support housing organizations and service providers. And so this is an annual amount of funding. Another example is the Poverello Center is creating Future Veterans housing project for transitional veterans. So the county's total investment in this project is over $1.3 million, which includes federal and ARPA funds.

Garrick Harmel: [00:02:54] And we are funding programs that support home repairs and energy-efficient upgrades for low income homeowners. This is done through something called this Community Development Block Grant Housing Rehab program. I think the second part of that is what the county can do to create new affordable housing units. We can preserve existing affordable housing in the county through strategic partnerships. And regarding infrastructure, we can leverage funding from the state and other sources in order to invest in road, sewer, water and other infrastructure updates in rural communities such as Lolo Bonner, Milltown and Seeley Lake. So coming up on the horizon, we're currently undertaking the infrastructure plan for future denser development, which will also help bring prices down. We're increasing options for down payment assistance by collaborating with local partners and we are also creating new homeownership opportunities in the market. Another thing we did is we created the Housing Innovation Fund where we set aside $750,000 for new projects and programs that address housing affordability in the county. And one last thing that we can do to understanding how all these different pieces fit together is to get better data. And if we have better data, then we can make better informed decisions. We can see how well we're doing addressing certain portions of the population and where we can strategically invest into other portions of the population.

Dave Strohmaier: [00:04:10] Earlier, you mentioned some of the outlying communities here in Missoula County. So Missoula County spans the gamut from right here where we're sitting in downtown Missoula, which is part of Missoula County, to areas outside of the city that are super rural. What do you see as some of the unique challenges to addressing housing in some of these outlying areas that even though they're super rural, we hear all the time that our sheriff's deputies can't find a place to live in Seeley Lake, for instance, or teachers or others who are either working or trying to find work in these outlying communities just can't find a place to live.

Garrick Harmel: [00:04:52] Housing issues in rural communities look different than they do in urban communities. For example, a lot of the housing stock that are in rural communities are really old and need significant repairs. There are lower vacancy rates and. More rural communities, mostly because there's a lack of different actual options. If there's not as many rental units or if those rental units are not affordable to folks or even just not a lot of different home ownership options that are definitely affordable to different incomes. Within that, if you're thinking about communities too, you're also thinking about how those communities could potentially grow in the future, what their needs are to grow, what their needs are, to potentially age in place, what their needs are to expand or add more housing to those communities because they want to sort of continue those communities on as populations get older. And there's not an ability to age in your in your home, those residents really almost don't have a place to go. A lot of the different supportive services that may help different aspects of a population don't exist in rural communities. Wage growth is different in rural communities than it is in urban environments. And so within that there's a lack not of opportunities, but just of what that sort of that different growth allows. I also think that in local communities with an aging housing stock and an aging population with wages that are sometimes lower than urban places, people's homes may be falling apart, but the only equity that they could get is if they actually sell their home or there's not sufficient infrastructure to have growth in the way that the community wants to see it. And that's happening in a lot of our rural communities in the county.

Josh Slotnick: [00:06:34] So a couple things I just want to point out. A couple big things we did and get your thoughts on a little nugget of wisdom that came out of breaking ground. So a couple of big things we did. We redid our zoning code not just ahead of the city, but ahead of the state making demands that we had already accomplished. I think this zoning code is really development friendly. And in places where you can build a house now, you can build a duplex or a triplex or four plex. We also cooperated with a handful of other entities and were successful in getting a $13 million BUILD grant in the Sxwtpqyen area that turned into nearly $19 million of infrastructure: sewer, water, road, grid that basically set the table for development. Now, we can't say that all that development is going to be affordable, but it does add to the volume of housing, to the inventory and hopefully will alter that supply and demand type of equation. We're doing a similar thing out at the Y. We're going to create the infrastructure development will follow, hopefully change the dynamic in terms of supply and demand. I'm only bringing this all up because one of the little nuggets of wisdom that I got out of breaking ground from Econ Northwest was that unless we intervene in the market, we're not going to see workforce housing because the market is not pushing towards lower cost housing, that some type of intervention has to happen. So even though we're doing these, I would say bold pioneering efforts in terms of creating infrastructure for the next 20 to 30 years of housing, there's no guarantee that those houses are going to be affordable by a third grade teacher. We have to do some kind of intervention. What are the sorts of interventions you think we could do that actually might make one pool of housing affordable for people who are bankable and do regular in-person work in Missoula County?

Garrick Harmel: [00:08:12]  [00:08:12]One of the things about developing housing is that it takes time to put new units on the ground, even with the best laid plans and initiatives and even money to do that. And time like it takes time for actual units to be built while units are being built. It's key to focus on keeping the people that are in your community here and protecting the actual housing units that are here. What I mean by that is you want to try and keep people from moving out of the community. A general thought of like, how do you keep people in their home? Well, if they're able to age in place, we allow for them to age in their home. If they need to do repairs, how can we keep them in there? They [00:08:49] want to add additional people in their home and turn it into multigenerational to where it's an Adu or even just a rental or a family member or some aspect like that. We sort of allow that. And I think that that is key because any time that somebody actually gets displaced from a community because they can't afford it, you're losing a viable source of what makes that community unique. And so in my mind, a strategy as we're incenting new developments and trying to create new projects is to actually physically keep people here. And that's on, I think about that in the realm of like a homeowner as well as a renter.

Josh Slotnick: [00:09:25] So how do we do that?

Garrick Harmel: [00:09:26] What are the things that we can do now and what are the things that we can plan to do in the future? I think those are the sort of the two key points. And it's almost like stabilize the people that are here. So we have existing programs if they need repairs, if they need to age in place, we have that ability to do that. And what we're looking at is actually expanding some of those programs to where they actually fit a larger portion of the population. So one of the things that came out of breaking ground, which I thought and that we also have had conversations about, is it has great strategic goals to do things. But we also wanted to broaden that to a wider portion of the population, recognizing that multiple people within the community need those same services or need those same initiatives of what we're trying to. I think keeping people in their homes, supporting organizations that create different forms of shared equity to allow them to sort of hold on to things. And that could be either through a cooperative like what North Missoula CDC is doing for apartment rentals or even helping preserve existing affordable units through manufactured home parks or whatever is actually in the community. So preservation of those existing units, helping people stay in them. If you're not physically buying it, you're helping people actually stay. Then at the same time, we're looking at as we're helping people afford rents, how can we help renters gain equity so that they can actually buy a home? Right. And so it's taking that sort of stabilizing first and then figuring out a way to help them get into a different situation.

Dave Strohmaier: [00:10:56] Looking at right now, at this moment in time, as I drive around town, I'm seeing a lot of projects that were maybe started two, three years ago, finally getting to the point where they're coming online and either have already or will soon be having folks move into them. Two questions for that. Any sense of what impact that might have like right now in terms of what we're seeing housing wise in Missoula? And also, I'm just curious, who are the folks who are moving into these new units and where have they been? Are they folks within our community that have been doubling up with others in their homes or are they moving in from somewhere else?

Garrick Harmel: [00:11:40] There is a lot of development happening right now within the city and county. The Villaggio as well as Blue Heron coming online is massive. That's huge. Right. So that is a that is a huge segment of the population that can now afford housing. Right. And that's also helping to free up other areas of of where people were sort of not stuck but sort of staying. But now that they have an affordable place where they can rent. So no denying that is definitely having an impact. I think that also a lot of the things that we're making projections 2 to 3 years ago, even pre Covid as they're coming online right now, we're having to readjust to their actual who their market is. There is a study a few months ago about there there was an increase in multifamily rental units that came online nationally. Right. But what if you dig down into the data? What you realize is that because of the demographics of who can afford them, they are subject to like very, very high incomes. What I'm hearing right now is like, that is what the market is building to that segment of the population because that's who can afford it. So if a single family home is being built or a condo is being built, that is who can afford that portion of the population or they're banking on sort of making it to that portion of the population. And so So.

Josh Slotnick: [00:13:01] You're saying builders build to the market [price]?

Garrick Harmel: [00:13:03] Correct. And so within that, we can work with builders as well as local nonprofit agencies as they are developing projects and concepts to sort of help figure out who we want to serve or how can we help serve them in sort of being able to reach other subsets of that population or so people that aren't at the higher end of the spectrum where units are coming online. So everybody sort of below that, that still needs housing within that range.

Dave Strohmaier: [00:13:33] Is that kind of what you were getting at, Josh, in terms of intervention of local government? So a little bit if if builders are building to the market, then part of what we need to be looking at, if there's segments of the market that aren't being perceived as such, we need to open it up.

Josh Slotnick: [00:13:48] Absolutely. The market is not third grade teacher or the new physical therapist. The market is somebody who's making in the mid one hundreds. How do we make sure that the folks I just mentioned who are maybe have an income that's $90,000 over the whole household and are bankable, how do we make it so they can buy a house, too? Well, there's going to need to be some type of intervention in. So I'm looking for some specifics. Last session, the legislature did one big housing bill, House Bill 819, kind of a Frankenstein, and that they took all these pieces of other housing legislation and smushed them into one in there. There are three, three big parts. But one part I want to talk about now is a really key piece of what could be a meaningful intervention in the housing market. It's down payment assistance with a deed restriction. This would allow someone who's bankable and earns what looks used to look like enough money to buy a house. But right now they're not even in the market. It would allow that person to get into the market. What do you think of these types of interventions?

Garrick Harmel: [00:14:47] I think that they're necessary to be able to supply different housing options at different points along a housing spectrum of where there's different need. So House Bill 819 has four different parts to it. The down payment assistance part of that allows people within the range of 60% to 140%. Local area median income to be able to apply for up to 30% of the home value and be used for down payment assistance. So that in itself is a game changer. And the fact of allowing people that are able to save a little bit of down payment but need more because of availability, because of house prices specifically in such a hot market like Missoula County's hot market. Another way to think about this is what are those different tools that allow us to hold something that allows people to sort of gain equity and maybe keep something affordable over a longer period of time. So there are different models of home ownership that allow this to happen. They're called shared equity models. So a community land trust is a model of shared equity. A community land trust is essentially a trust holds the land and a person who is buying the home on that trust buys the home or the improvements, and they calculate how much equity that person can earn over time to keep it long term and affordable, but also to give that person they come in in an affordable mortgage payment, but also an ability to gain equity.

Garrick Harmel: [00:16:13] A different variation of that is a cooperative ownership. And so you can see this through manufactured home parks and even multifamily rental units. Now in Missoula, which is pretty groundbreaking, the cooperative owns the actual land, some agreed upon portion of the property. What is different from a Community land Trust and a cooperative is that it's usually governed by a board of directors that actually makes democratic decisions on how that should run. Another a different benefit from that is that you're able to get more equity historically in a community land trust. Sometimes you don't have to be part of the actual cooperative to still reap the benefits of that. What you're effectively doing is you're sharing the equity growth as it as it accrues over time with either model, so a land trust or a cooperative.

Dave Strohmaier: [00:16:59] So in either of those scenarios, what role do you envision Missoula County perhaps playing?

Garrick Harmel: [00:17:05] So hypothetically speaking.

Dave Strohmaier: [00:17:07] Oh, we're all about hypotheticals, yeah.

Garrick Harmel: [00:17:09] Hypothetically speaking, if a local organization came to us and said, Hey, we have this cooperative home ownership model, can you potentially help us and hold on to land while we get our financing together? So it would be a very short term sort of acquisition or potential acquiring of property because properties come on the market like that very, very, very quickly. In development, people need time to sort of put their plan together, get their financing in line, make sure that people still want to do this and still be able to acquire that property. And so there are tools where they can sort of access to be able to keep that affordable, but they need time to be able to do that. That could be a role that the county could potentially play. That'd be great. The county could also potentially play a role in helping expand that model into other parts of the county. I'm just going to use another hypothetical cooperative multifamily unit development that happens in Lolo or Bonner to where someone says there's this building that's going up for sale. There are eight tenants here. I believe the county's role would be most effective if we're acquiring and helping somebody build capacity to sort of hold onto it long term. I don't know that it's our we have the capacity to be able to hold on to it long term, but how can we help other agencies that are set up to do that? And so that is another under the guise in my mind of how do we keep people in their homes, how do we keep people sort of how do we stabilize that from being turned over or redeveloped or even lost?

Josh Slotnick: [00:18:33] I hope some of our housing nonprofits are hearing this reach out. We're there for you. I was on the board of one of these housing nonprofits a long time ago, and one of the issues we had was that a piece of property would come online, as you were pointing out, happened quickly. It would be perfect for a development. But the nonprofit couldn't act fast enough because it takes a lot of time to pull that type of financing together. If you're a nonprofit, it's the sort of thing where the county could act relatively quickly, hold a chunk of property for the short term, create an agreement with a housing nonprofit who then takes a year, a year and a half, two years to get their financing together, buys the land back from us, and then does a development oriented towards bankable folks who are at 140, 150, even 200% of AMI, which right now wouldn't get you a house on the open market. We could do that. So if you're housing nonprofit person and you hear this, let us know.

Dave Strohmaier: [00:19:23] So Garrick, how is homeownership going to look in the future and how might we move in a direction to meet those needs?

Garrick Harmel: [00:19:33] That's something I think about a lot. I think that in the future, home ownership is going to look different. In my mind, there are more like tiers or steps to potentially get to market. Or maybe you don't even want to get to market by the time you're in one of these tiers, say Tier one is an 800 to 1000 square foot home that's affordable to this price range. Maybe it's controlled by community land trust, maybe it's controlled by a cooperative so that you're getting enough equity, but you're in an affordable place to be able to stay into, right? You can stay in there forever or you can downsize into this home or you can stay there until your family. Or your needs expand and you potentially need more space or your wages go up to where you're like, okay, I'm ready for the second tier. Second tier is a little bit bigger. It's 1200 square feet. I'm totally making this square footage up. It has more opportunities or maybe there's more equity at this point based on that that structure and that price. You can stay in it for 15, 20 years. You can stay in it for as long as you want to, Right. That might be enough house for you. The Tier one house might be enough house for multiple people. I don't need a bigger house. I need something smaller. Then there's a third tier, you know, it's just sort of like it's not bigger and better, but just it has different options that the other two don't have.

Garrick Harmel: [00:20:47] And on each step of these options, you have an ability to one, you're stabilizing yourself, you're gaining equity, you're having the benefit of home ownership, but also that worry about am I going to be able to find some place to live like is sort of taken out of your psyche that you don't have to worry about, like you've solved that problem. So then you can focus on other aspects of your life and then within that you want to go to market. That's great. Or you don't. You don't have to. The means of which those homes are built and brought to market, I think is going to be different. It's not changing perceptions of what people want. It's just changing perceptions that there are different options to get there. No, I think that we can start working with developers as they are doing developments of saying, Here's an idea. What do you think of this? Can this sort of be in there? Is there a way to partner with a land trust or a cooperative to sort of help make those actually affordable? By definition, I believe our zoning would allow all of those options currently right now to go in. I think our role is to just show people that affordability means different things to different people. So it's giving them that option wherever they are.

Dave Strohmaier: [00:21:56] Thanks. There is a lot to digest there and this is just part of an ongoing conversation. I think we'll definitely, uh, want to continue touching base as as we move forward.

Josh Slotnick: [00:22:09] Yeah, thanks a lot, Garrick. I just want to throw one more, one last thing out because I can't help it. One of our big, big issues here is money. How do we pay for these things? If we're going to intervene in the market? It's going to take some type of resources to buy things down in one way or another. And because of our tax structure, we don't have any access to regular money, regular meaning it's going to happen every year. We have to be super creative in a way that other municipalities and other states don't have to be because of their tax structure. We're rising to the challenge, but the parameters are pretty intense per tradition.

Dave Strohmaier: [00:22:44] Garrick, we always like to put our guests on the hot seat at the very end here. Hopefully it's not too hot, but feel free to share with us any good book you've read lately, any piece of wisdom that you have?

Garrick Harmel: [00:23:00] I really love what I do. I love trying to explain to my children because they always ask me to translate what I'm doing. My 11 year old daughter said, "Oh, you're talking in a microphone. Are you going to translate it to kid speak?" Recognizing that housing is a wonky thing and there are terms and acronyms. I think the essence of the work that I do, I want to realize that also how it impacts other people. It is a very, very complex situation. I think about there's an ultrarunning marathon mantra. It's called relentless forward progress. You know, even if they're baby steps, right? You like you just keep moving forward. I love that idea. I love the fact that all the things and the policies and the initiatives that we create, maybe not right now, but we'll bear that. We just need to keep moving forward. That's great even if it's incremental.

Josh Slotnick: [00:23:54] I like that relentless forward progress is great. I thought you were going to say "the pain cave." This is way better. That's another ultra running thing and which I'm barely an ultra sitting person.

Dave Strohmaier: [00:24:05] So but thanks so much for joining us this has been fantastic. And we'll we'll do it again.

Josh Slotnick: [00:24:11] Relentless forward progress. Thanks, Garrick.

Garrick Harmel: [00:24:14]  Thank you.

Josh Slotnick: [00:24:16] Thanks for listening. Do you enjoy these conversations? It would mean a lot if you would rate and review the show on whichever podcast app you like and if you know a friend who would like to keep up with what's happening in local government, be sure to recommend this podcast to them. If you have a question or topic you'd like us to address on a future episode, email it to communications@missoulacounty.us and to find other ways to stay up to date with what's happening at Missoula County, go to Missoula.co/countyupdates and thanks for listening.