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Real Estate

Montana Commission Suggests Using $15M on Affordable Housing

The housing projects would create 995 affordable rental homes around the state

By Associated Press

HELENA – A commission tasked with making recommendations for how Montana should spend some of its federal coronavirus relief funding voted Thursday to recommend Gov. Greg Gianforte authorize up to $15 million in grants to ensure 17 affordable housing projects can be completed despite pandemic-driven cost increases.

The projects had already been approved and received federal grants or low-income housing tax credits but now need additional funding because of a cost increase for labor and key building materials, including lumber, said Cheryl Cohen with the Department of Commerce.

The housing projects would create 995 affordable rental homes around the state for low-income families, senior citizens and people with disabilities, Cohen told the Economic Transformation and Stabilization and Workforce Development Advisory Commission.

Each project would be eligible for up to $2 million in grant funding, she said.

The projects discussed Thursday include 402 housing units in Missoula County in two projects that have each experienced $2.5 million in increased costs due to the pandemic, the Department of Commerce said.

Montana Housing would consider, on a case-by-case basis, whether it could use funding from other existing resources to completely fund the shortfall, Cohen said. The projects are not feasible with additional loans, she said, which is why the department is recommending grants.

The developers will be required to explain the price increases and what they’ve done to cut costs, Cohen said.

The Economic Transformation commission has already recommended spending $10 million on rapid job retraining and $15 million on return-to-work bonuses for people who left the unemployment rolls after the program was created and worked for at least 30 days at a new job.

About $200,000 in return-to-work bonuses have been issued to 166 people, said Scott Eychner with the Department of Labor and Industry. There’s a backlog of 1,200 applications, many of which need more information.

Over the next month, Eychner said he hopes the agency will have paid out about 2,500 bonuses, about $3 million total. He said demand for the program so far has been lower than expected.

However, with the school year starting — creating a reduced need for child care — there may be more people willing to return to the workforce over the next month or two, he told the commission.

The committee will meet again in September and October to hear proposals for allocating its remaining $140 million for workforce training, business innovation and value-added agriculture programs.

Montana received $453 million in American Rescue Plan Act funds in June and is slated to receive another $453 million in June 2022, said Kurt Alme, the governor’s budget director.

About $250 million of this year’s funding is allocated to water and sewer projects with another $10 million proposed for regional water projects. Other commissions are making recommendations for specific projects to receive that money.