How we'll build the 21st century city

A home for everyone

There is almost nothing more important than home. It’s where we spend time with family and friends, raise our children, and build our dreams.  It’s also a better predictor of health than genetics1, and says a lot about how well our children will do2 3, and what kind of education they’ll receive4. But nearly half of homeowners with mortgages and 2/3 of renters in the Bozeman area can’t afford a home that is secure5. Without meeting their most basic need, how can we ask people to be good workers, parents, citizens, or neighbors?

The problem

We’ve allowed our city to be driven by a real estate bubble that benefits developers and out-of-state investors, but hurts the vast majority of us. Our city is taking up a much larger footprint than it needs to, increasing traffic, putting strains on commuter parking, and pushing up the environmental and financial costs of development.

What if?

We treated housing for what it is: a basic need and a human right? Instead of letting it be driven by the financial industry, our goal should be guaranteed affordable housing for everyone, at every income level, end of story.

Things you should know

  • 2/3 of renters here can’t afford the rent. 42% of homeowners in Bozeman can barely afford their mortgage (1/3 of all homeowners)6
  • It would take 36 years for the average family to save for a downpayment, if they can save at all.
  • The price of the average home needs to fall by half for housing to even start being affordable.
  • Nearly all aspiring first time homeowners simply cannot buy any home here.
  • 75% of buyers rely on family money for a down payment.
  • Almost 10% of all homes in Bozeman are only used seasonally or as vacation homes7.
  • If we tried to use growth alone to solve our housing problem (by building enough to drive down the price), we’d have to build 5,000 new units today plus an extra 1,000 a year. That’s a rate as fast as the fastest growing cities in the world.
  • We have a minimal homeless shelter that is less funded than our pet shelter and regularly cannot stay open during late winter cold snaps.
  • Our housing system is in constant crisis. There’s major news about it literally every decade going back over a hundred years.8
  • The only time housing was available and affordable across the country was the era of the middle class from the 1950’s to the 1970’s and that was created entirely by the federal government.

10 ways we can fix housing and make growth a good thing

1. Limit vacant homes and out-of-state vacation homes.

Too many homes in the area are unavailable for people who live and work here. Instead they’re used a few months out of the year as vacation spots. Those owners don’t contribute as much to our community, but we still pay the costs of them being here.

2. A local public bank.

Public banks are like regular banks, except they are owned by us. They’re not allowed to take on risky investment or pay their executives giant bonuses. Because they have to work in the public interest, all the profits go back to us, the people. Public banks save cities from excessive banking fees, provide much-needed loans during recessions, and can lend at very low interest rates.

3. Rental inspections and private licensing.

We take it for granted that hotels should be inspected for health and safety, but those stays only last a few days. Why should rentals, where tenants live for years, get away with skipping basic maintenance? Montana law already requires most rentals be up to code and current on maintenance, but tenants have to enforce this themselves in court–impossible for most renters. Separate enforcement at the local level will make sure tenants are treated with dignity. As for licensing, the state already covers licensing for property managers, but we’ll require private landlords be held to the same professional standards.

4. Maximum limits on lot sizes.

Smaller lots have a big impact. If our town had developed with lots the same size as our much-loved historic district, it would be about half its current footprint today! Small lots make developments feel more like neighborhoods, make things more walkable for those with mobility challenges, and make it cheaper for the city to provide services like water and sewer. Plus they allow for more comfortable single-family homes without resorting to high-rises for density.

5. A refinancing program to make existing homes affordable.

Public banking allows for making and refinancing private mortgages at very low interest rates. As a part of its public-interest mission, a public bank could offer refinancing for current resident single-home owners–a savings of $500 a month for the average home in Bozeman9–provided they sell their home at a discounted price. The vast majority of homeowners here will never realize the gains in property values we’ve seen in recent years10, but could have hundreds in their pocket every month to save or spend. Those who opt-in would be able to sell and purchase another home in the pool.

6. Expand zoning for cooperative and alternative housing.

Single homes offer freedom, but they can also be lonely and burdensome. More families today are once again living together in multiple generations. Younger people need financial support in the wake of massive student debt and low wages, while older folks are looking for support and community as they age. Allowing for cooperative housing would mean multiple generations or family groups could live together, share common spaces (and chores), and have a close support network at home, while cutting costs for everyone.

7. No-questions-asked housing for the homeless.

Imagine wandering the streets in the daytime, weighed down by all your possessions on your back. Or sleeping in your car, trying to navigate the mountains of paperwork and requirements for social services. Wondering whether the shelter will be open during the snow storm. Whether you’ll make it through the night in the freezing cold. Or whether you will survive but your feet won’t. This is the reality of being homeless in Bozeman, where our pet shelter is better funded than our human shell.

Cities and counties around the world have proven that if we simply meet the needs of the homeless first, by giving them housing, they are better able to recover. And most local governments save money through reductions in social services. It’s not only the right thing to do, it’s the smart thing to do.

8. Public housing made for everyone.

When you compare wages and housing, Bozeman is more expensive than Seattle or Denver. Many people have to get roommates into their 30’s, can never save enough for a downpayment, and can’t afford an apartment at all. Other who have made mistakes that hurt their credit (half of Americans have poor or fair credit11) or have a nonviolent criminal record get routinely denied for any housing.

Instead imagine getting a nice apartment (or modest house) that’s affordable from the start and never goes up, as long as you live there. You don’t have to worry about your landlord evicting you because of maintenance requests, and since we all own public housing, you get a say in how it’s managed. No invasive applications or outrageous fees, and if you make more money, you get to keep it, instead of the price going up. Millions of people around the world live in successful public housing. It’s time we caught up.

9. A 5 year rent freeze.

Another place where a backwards state legislature has decided that citizens can’t govern themselves, I would work hard to overturn that law and provide much-needed relief to renters, where rents are going up much faster than expenses. A market this hot is more likely to crash, hurting everyone, so this measure would help cool it off.

10. A unified city/county development plan

Bozeman can’t be separated from its surroundings, especially as growth in the city is affecting Belgrade and the rest of the county so much. As long as the city and county can’t agree on much, we’ll have competing rules that cause problems as the city grows and absorbs new development. Instead we need a carefully crafted plan with specific principles that limit urban sprawl, protect natural resources, and plan for growth 20 and 30 years from now.


References
  1. https://www.hsph.harvard.edu/news/features/zip-code-better-predictor-of-health-than-genetic-code/[]
  2. https://www.nber.org/papers/w19843[]
  3. http://scholar.harvard.edu/files/hendren/files/nbhds_paper.pdf[]
  4. https://dornsife.usc.edu/news/stories/2335/families-with-kids-increasingly-live-near-families-like-them/[]
  5. 2017 American Community Survey, available from https://data.census.gov[]
  6. 2017 American Community Survey 5-year estimates[]
  7. U.S. Census Bureau American Community Survey 2017 5-year estimates[]
  8. More details: see the Senate Bill 1862 from CA in 1831, Teddy Roosevelt’s State of the Union from 1904, the proceedings from the National Conference on Housing in 1920, the Bulletin of U.S. Bureau of Labor Statistics from 1928, reports from the 1940’s, multiple books on the crisis from the 1970’s and 1980’s, and a report from the National Low Income Housing Coalition in 2014 talking about a 25-year-long crisis.[]
  9. Based on a 1% refinancing interest rate, the median sale price as of Aug. 2019 ($437,000), and a current rate of 3.8%[]
  10. this would require selling and purchasing a much cheaper home. But the lowest home on the market anywhere is over $300,000, meaning a person looking to cash out would have to relocate to a much cheaper market.[]
  11. https://www.fico.com/blogs/us-credit-quality-continues-climb-will-it-level[]

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