MISSOULA, Montana — In a residential section near the city's northern edge, a number of apartments and duplexes have popped up over the past three years.
This is part of a larger effort, including new zoning laws, to help provide affordable housing for Montanans who have been pushed out of the market by rising prices, said Montana Association of Realtors President DJ Smith.
“For Montanans, it has become very difficult to find a home that meets their needs and is affordable,” he said.
An influx of out-of-state residents moving to the Big Sky State has driven up demand, while a labor shortage has left housing supply tight. The result is not only more apartments and duplexes, but it’s also a hot-button issue in a Senate race that could ultimately decide who controls the chamber.
While some Democrats are struggling in close races across the country, no incumbent faces a tougher reelection bid than Democratic Sen. Jon Tester, who would need to win a state that Trump won by 16 percentage points in 2020.
The Cook Political Report, a political forecasting site, has moved the race from dead heat to leaning Republican, and the latest AARP poll has Sheehy ahead by eight points, just the margin of error.
Tester has made housing a cornerstone of his campaign — particularly how to help Montanans who are becoming unhoused as more people move to the state, driving up home prices.
“We’re seeing a lot of people coming into the state, wealthy people, who want to try to buy our state and change it into something different,” Tester said at a Montana Broadcasting Association debate on June 9.
Tim Sheehy, the Republican candidate, is a former Marine who founded an aerial firefighting company in Montana. He blames rising housing costs on inflation, and blames inflation on laws supported by President Joe Biden that Tester voted for.
“The biggest challenge we’ve faced in growing our company has been convincing people to come to Montana and afford these crazy housing costs,” Sheehy said during the debate. “It’s a direct result of the policies that have come out of the Biden administration.”
New home for sale in Missoula, Montana, where home prices have jumped in recent years on September 4, 2024.
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Inflation and housing costs are top concerns across the country, but few places fare worse than Montana when it comes to affordability. The National Association of Realtors ranks Montana as the least affordable state for homebuyers. Home prices in the state have risen 66 percent in the past four years, according to the U.S. Federal Housing Industry Price Index — faster than the 50 percent increase nationwide.
Some Montanans can no longer afford the communities where they grew up because those who moved to the state sold their homes in more expensive parts of the country and were able to buy with cash, Smith said.
The median household income in Montana is $67,631, according to the U.S. Census Bureau. That means Missoula’s median home price, $568,377, according to the Missoula Association of Realtors, is high for the average Montanan, but tempting for those looking to leave more expensive states for Montana’s mountains, national parks and open spaces.
“People in Colorado and California are selling their homes for over $1 million and have a lot of equity to buy here in Montana,” Smith said. “That has led to a record 30 percent of our homes being purchased with cash last year.”
Prices are also being affected by the state’s labor shortage, said Andrew Wiegand, owner of Butler Creek Development, a Missoula builder. Subcontractors, such as plumbers and electricians, are in short supply, so costs are rising, he said.
“If you have a group of three or four subcontractors to use, not 30 or 40, you're not going to have a competitive market like you do in other parts of the nation,” he said.
Weigand said he worries the problem will get worse because many subcontractors are getting older and there are fewer people to replace them.
“A lot of our craftsmen are getting older,” he said. “They’ve been doing these crafts for 20 or 30 years, and now they’re looking to retire. There aren’t a lot of young professionals or young people interested in doing these jobs to meet this need.”
Tester has several proposals aimed at helping Montanans struggling to afford a home. These include grants for housing expansion and assistance with home repairs. He also proposed a tax credit to encourage mobile home park owners to sell their property to coalitions of Montanans instead of developers who could use the land to build more expensive homes.
While Sheehy blamed the rising home prices on inflation, during the June 9 debate he called for expanding the state's trade programs to help fill a shortage of contractors needed to build homes.
