Uncommon Ground

Housing Hype

With such an exploding market our entire valley will soon face a total absence of housing that can be purchased with most local wages

By Mike Jopek

If Republicans in the Montana Legislature have their way, homeownership in Whitefish will become a luxury only afforded to the wealthy or out-of-state wages. The American Dream for service industry workers or people who serve the Flathead in capacities like teachers, nurses, firefighters or police will remain unattainable. 

With such an exploding market our entire valley, like the tri-cities of Whitefish, Columbia Falls and Kalispell, will soon face a complete and total absence of housing that can be purchased with most local wages.

Ideologues blame government’s pesky regulations like extra insulation in the walls or sidewalks near the streets. Others blame property speculators who flop homes for profit within our towns. The daily vacation rental scene transformed homes into businesses. Plus, there’s that basic price of lumber.

Back when we built our farmhouse an eight-foot 2×4 cost about a $1.25, then $2 a stick when we built our chicken barn. Today that lumber costs over $6. Even if you buy a stack, lumber got pricy.

Today, out-of-state money makes Montanans feel poor, like we can’t afford a slice of homeownership. Montana could be helping local communities by investing in more inventory or making credit easier and faster to access for working people. 

The bulk of inflation facing rural Americans is mixed up in housing. This generation’s hardworking locals face decisions like owning a home or putting the kids through college. 

Even frugal workers who enjoy enough money to fill the appraisal gap or increased down payments witness housing inventories vanish as big cash offers beat mortgage deals every day of the week. 

We live in a bifurcated economy, a nation where 12% of us own 85% of all the asset wealth like stocks or housing. That $15 work no longer fills the affordability gap within international real estate markets like Whitefish.

Instead of helping Montanans tackle the affordability challenge facing workers, lawmakers are seeking to end existing local housing programs in places like Whitefish and Bozeman because they don’t like some rules that self-governing cities enacted to help house locals in the fastest growing places of our state.

Urging the Senate to table HB 259, Whitefish Mayor John Muhlfeld said that “the affordability gap in Whitefish has grown exponentially. In 1999 I purchased a modest two-bedroom home in downtown Whitefish for $68,000. Today that same home would sell for no less than about $400,000.”

Whitefish Chamber of Commerce Executive Director Kevin Gartland educated committee members, saying that the local housing program was created at the behest of the 450 local businesses as their most important issue. 

Gartland said the local housing program, which the community created over years of work, “is not the result of liberal Whitefish politicians shoving their radical philosophies down the throats of our businesses and our residents.” 

Even though our western state leads the nation in market escalation, the housing crunch facing Montanans is not unique. Most of our nation saw home costs flare up. It’s a seller’s market and the housing stock isn’t keeping up with demand, much of which is driven by out-of-state cash seeking a rural-lifestyle state with great outdoor amenities and fast internet.

If you’re a lucky Flathead homeowner the unfortunate conclusion to all of this market escalation is higher property taxes. 

The Legislature may mitigate the average statewide growth by lowering the homeowner tax rate from the current 1.35% of market value to a proposed 1.2%. That’ll neutralize the 12% statewide average increase in residential taxable valuation that saw $14 billion of market value materialize last year. 

Hold on to your wallets, fast-growth area homeowners. The Flathead traditionally sees significantly higher than average growth. Property taxes seem destined to increase come fall, for those enjoying the luxury of homeownership. For many local workers the rent will just go up. 

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