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Missoula Grapples with Affordable Housing Crisis: A Multi-Pronged Approach Underway

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  Published in House and Home on Monday, August 18th 2025 at 22:30 GMT by Hubert Carizone, Missoulian
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Missoula is facing a stark reality: a severe shortage of affordable housing options is impacting residents across income levels and threatening the city’s long-term vitality. The problem, years in the making, has been exacerbated by rapid population growth, limited land availability, and rising construction costs. While acknowledging the complexity of the situation, Missoula leaders are now actively pursuing a multi-pronged approach to address the crisis, involving zoning changes, incentives for developers, and direct investment in affordable housing projects.

The core issue lies in a widening gap between income levels and housing costs. According to data cited by city officials, median home prices have skyrocketed while wages haven't kept pace. This leaves many Missoula residents – including essential workers like teachers, nurses, and service industry employees – struggling to find safe and stable places to live. The shortage isn’t limited to low-income individuals; middle-class families are also feeling the squeeze, often forced to spend an unsustainable portion of their income on housing or commute long distances from more affordable areas.

The city's response is multifaceted, recognizing that a single solution won't suffice. A key component involves revising zoning regulations to allow for increased density and diverse housing types. The recent approval of changes allowing accessory dwelling units (ADUs), often referred to as "granny flats," on most residential properties represents a significant step in this direction. ADUs offer homeowners an opportunity to generate income or provide affordable rental options, while also increasing the overall housing supply. Similarly, proposals for allowing duplexes and triplexes in more neighborhoods are under consideration, aiming to create more multi-family housing opportunities.

Beyond zoning changes, Missoula is actively seeking to incentivize developers to build affordable units. The city’s Affordable Housing Trust Fund (AHTF) plays a crucial role here, providing financial assistance – including grants and loans – for projects that incorporate affordable housing components. Recent allocations from the AHTF have supported several developments, including the proposed “Riverfront Commons” project, which aims to create hundreds of mixed-income units on city-owned land along the Clark Fork River. This project, however, has faced scrutiny regarding its affordability levels and potential impact on surrounding neighborhoods.

The city is also exploring innovative financing mechanisms to bolster affordable housing development. One promising avenue involves leveraging state and federal tax credits, such as Low-Income Housing Tax Credits (LIHTC), which can significantly reduce the cost of building affordable projects. Partnerships with non-profit organizations like NeighborWorks Missoula are vital in navigating these complex funding processes and ensuring that projects meet community needs.

However, challenges remain. The construction industry faces ongoing labor shortages and supply chain disruptions, driving up costs and delaying project timelines. NIMBYism – “Not In My Backyard” opposition from residents concerned about increased density or changes to neighborhood character – can also hinder development efforts. Addressing these concerns requires proactive communication, community engagement, and a willingness to compromise.

The city’s recent adoption of an inclusionary zoning ordinance is another significant step, requiring developers of larger projects to set aside a percentage of units as affordable. While the initial requirements are relatively modest, officials plan to gradually increase those percentages over time. This policy aims to ensure that new developments contribute directly to addressing the affordability crisis.

Furthermore, Missoula County is also contributing to the effort. The county has allocated funds for housing assistance programs and is working with the city on regional planning initiatives to address broader housing needs across the entire area. Recognizing that affordable housing isn’t just a local issue but a regional one, collaboration between the city and county is essential.

Looking ahead, Missoula leaders acknowledge that addressing the affordable housing crisis will require sustained effort and ongoing adaptation. The current strategies are considered initial steps in what will be a long-term process. Continued monitoring of housing market trends, regular evaluation of program effectiveness, and a willingness to explore new solutions will be crucial for ensuring that all residents have access to safe, stable, and affordable places to call home. The city’s commitment to tackling this challenge reflects an understanding that the future prosperity of Missoula depends on creating a community where everyone can thrive.