MISSOULA, Mont. — In a subdivision near the northern edge of town, a number of condos and duplexes have popped up in the past three years.
It’s part of a larger effort, including new zoning laws, to help provide affordable housing to Montanans who have found themselves priced out of the market, said DJ Smith, president of the Montana Association of Realtors.
“For Montanans, it’s been harder and harder to find a home that meets their needs and is affordable,” he said.
An influx of out-of-state residents relocating to the Big Sky state has sent demand soaring, while a shortage of labor keeps housing supply limited. The result is not only more condos and duplexes, but a hot-button issue in a Senate race that could ultimately decide who controls the chamber.
While some Democrats are sweating it out in close races across the country, no incumbent has a harder re-election than Democratic Sen. Jon Tester, who will need to win a state that Trump won by 16 percentage points in 2020.
Political forecaster Cook Political Report recently moved the race from a toss-up to leaning Republican, and the most recent poll from the AARP found Sheehy had an 8-point lead, just within the margin of error.
Tester has made housing a cornerstone of his campaign — specifically how to help Montanans who have been priced out as more people have moved to the state, driving up housing prices.
“We’re seeing a lot of folks come into the state, rich folks, who want to try to buy our state, to change it into something it’s not,” Tester said at a June 9 debate hosted by the Montana Broadcasters Association.
Tim Sheehy, the Republican nominee, is a former Navy SEAL who founded an aerial firefighting company in Montana. He blames high housing costs on inflation, and blames inflation on laws backed by President Joe Biden and voted on by Tester.
“Our biggest challenge growing our company was convincing folks to come to Montana and absorb these crazy housing costs,” Sheehy said during the debate. “They’re a direct result of the policies coming out of the Biden administration.”
A new home for sale in Missoula, Montana, where housing prices have jumped in recent years on Sept. 4, 2024.
CNBC
Inflation and housing costs are a top concern across the country, but few places are worse than Montana when it comes to affordability. The National Association of Realtors rated Montana the least affordable state for home buyers. Housing prices in the state have increased 66% in the past four years, according to the U.S. Federal Housing Industry Price Index – faster than the 50% increase nationally.
Smith said some Montanans are no longer able to afford the communities they grew up in as those moving to the state have sold their homes in more expensive parts of the country and are able to buy in cash.
The median income for a household in Montana is $67,631, according to the U.S. Census Bureau. That means the median home price in Missoula, $568,377, according to the Missoula Organization of Realtors, is high for the average Montanan, but it’s inviting for those looking to leave higher-cost states for Montana’s mountains, national parks and ample space.
“People in Colorado, California, they would sell their homes for over a million dollars and have a lot of equity to purchase here in Montana,” Smith said. “That’s led to a record number of 30% of our homes last year being bought with cash.”
Missoula builder Andrew Weigand, owner of Butler Creek Development, said prices are also affected by a labor shortage in the state. Subcontractors, such as plumbers and electricians, are in short supply and costs are higher as a result, he said.
“If you have a pool of three or four subcontractors to use, and not 30 or 40, you’re going to have not as competitive a market as you do in other areas of the nation,” he said.
Weigand said he is worried the issue will only get worse because many subcontractors are getting older and there are fewer people to replace them.
“A lot of our trades are aging. They’ve been doing it for 20 [or] 30 years, and they’re looking at retirement,” he said. “There’s not a whole lot of … young professionals or young people that are interested in performing those jobs to fulfill that need.”
Tester has several proposals targeted at helping Montanans who are struggling to afford a home. Those include grants to expand housing and help with home repairs. He has also proposed a tax credit to incentivize the owners of mobile home parks to sell their property to coalitions of Montana residents rather than to developers who could use the land to build more expensive homes.
While Sheehy has blamed high housing prices on inflation, during the June 9 debate he called for expanding trade programs in the state to help with the shortage of contractors needed to build homes.