The recent surge in Montana’s property prices, fueled largely by the influx of new residents post-COVID, has intensified what was already a crisis of housing affordability in our state. Developers, keen to address this crisis by supplying the surge in demand with new housing projects, seem to be stonewalled at every turn by their communities. Our community members, on the other hand, understandably feel that which makes Montana special being taken from them and from their children. They do the only thing they can: stop all new supply and hope that eventually demand yields. We seem to be at a standstill in progress.
Are our only options to address this crisis either the Scylla of volatile housing supply increases or the Charybdis of no new housing at all? I don’t think so; I’m more optimistic. I believe there is a way everyone can win. I propose a novel approach – a tiered property tax system, which would change the way we view housing development in our state.
This tiered system involves:
• Newcomers’ Higher Tax Rate: Initially, new residents would face a higher property tax rate. This measure isn’t just about increasing revenue; it’s about rethinking demand as a variable we can influence. By moderating the influx of new residents, we can throttle demand in the market.
• Gradual Tax Reduction for Continued Residency: The tax rate would decrease over years of residency, incentivizing long-term commitment to Montana and providing a gradual path to lower rates for new members of our community.
• Rewarding Long-Time Residents: Those who have been part of the fabric of Montana for longer will be rewarded with the lowest tax rates, a gesture of gratitude and honor for their sustained contribution to our state.
When we stop treating housing demand as a constant, suddenly a new vision for the future is possible. One where current residents no longer fret about overdevelopment and loss of community character and natural beauty, as well as one where developers are freed of bureaucracy to do what they do best: build. New tax revenues can be allocated towards parks, public spaces and other improvements to our communities.
In sum, a tiered property tax system would be a step towards a more harmonized, sustainable future for housing in Montana, where development of new supply meets demand in a way that honors our state’s unique heritage as well as the aspirations of all who call it home.
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