Rental Housing
Why This Measure?
The ability to provide for a roof over one’s head is a basic necessity of life. Beyond basic shelter, housing is a foundation for personal security and stability, and it defines the social ties of neighborhood, school, and community for most Missoulians. The national standard for renters suggests that housing costs, including rent and all utilities, should not exceed 30% of gross household income. To the extent that housing consumes more than that, it cuts in on the amount available for other basic needs, such as medical care, food, and clothing.
Lead Indicators:
Sources: 1990 Missoulian classified ads, survey of property managers by Missoula Housing Coordinator, UM student
Trend Somewhat Better Data Rating Availablevvv Reliablevv Relevantvvv
How are we doing?Slightly better since 1994. Based on statistics for two-bedroom units, the average cost of rental units rose about 50% from 1990 to 1994, making Missoula one of the most expensive places to live in the state. The number of vacant units averaged 1%, well below the 5–6% industry standard, indicating a shortage of rental housing. The shortage, coupled with higher costs, increased the incidence of homelessness, especially for families. Since 1994, rents have stabilized and even come down about 10–14%, thanks in part to a surge in construction of rental units on the lower end of the market. However, rents remain high relative to the average income for most jobs.
Since 1993, for-profit and nonprofit developers have added about 900 units of below-market housing to Missoula’s rental stock, including dorm space and family housing at UM. This has helped to stabilize rental rates in the area, reducing them 10–14% from their 1993 peak. Nonprofits have also initiated special educational and financing programs to help low and moderate income people buy their own homes.
However, Missoula’s land use practices work against providing housing at lower costs. There is a shortage of vacant land already served by water and sewer services, and residential zoning does little to encourage infill and more efficient land use. Through the work of the Growth Management Task Force, both the city and the county will be considering recommendations that would change land use with the goal of reducing costs per unit in the future. (Missoula Housing Coordinator 1997)
As with home ownership, the increase in rents in Missoula since the 1980s has resulted in gentrification. People with higher incomes live in the urban area, and those with lower incomes move out to areas of lower rental costs, often to small outlying towns such as Lolo, Alberton, Stevensville, and Clinton. These people then need to commute to jobs or school in Missoula, increasing air pollution and traffic congestion, and also increasing the household’s vehicle expenses. National data indicate that many households could afford to buy a house if they didn’t require multiple vehicles for transportation. (Missoula Housing Coordinator 1997)
The Challenge Facing RentersRenters, the majority of whom are low- and moderate-income people, are caught in a housing squeeze similar to the one experienced by would-be homebuyers.
1990 1998 8-year % Increase Average Monthly Rent (for a 2-bedrm apt.)$410 $550
+34% Per Worker Average Annual Earnings $22,975 $23,425 +2%$1,915/mo $1,952/mo
Source: Missoula Housing Coordinator; all $’s have been adjusted for inflation and are expressed in 1998 dollars.
In 1990, rent consumed just 21% of the average worker’s monthly income ($340/$1,589, in unadjusted 1990 dollars). In 1998, rent consumed 28% of the average worker’s monthly income ($550/$1,952, both in 1998 dollars), beginning to push the average household into a cost burden for housing.
The end result: The average-income family is probably paying a higher percentage of their income for rental housing now than they did ten years ago. Low-income families are experiencing an increasingly severe cost burden for housing. In the worst cases, they may be forced to leave the Missoula area or even become homeless.
At the 1997 rental prices for two bedroom units listed on the first page, a household would need to earn $22,280 a year to keep their rental costs, including utilities, within 30% of its income. (Missoula Housing Coordinator 1997)
About 58% of the net new jobs created in the Missoula area between 1986 and 1996 averaged $16,800 or less in annual wages. (Missoula Area Economic Development Corp.) In addition to costs, people in low-wage jobs have lots of other considerations involved in finding a place to live, such as proximity to bus lines, stores, and medical services.
See Housing Rental Assistance in Basic Needs
Homelessness and the threat of homelessness puts a terrible strain on people in their relationships with each other and with their ability to continue in a job or do well in school. The incidence of health and social problems escalates when housing costs stress the family budget or, especially, when they result in the loss of housing altogether.
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