Affordable housing project celebrated in Great Falls; housing advocates pushing state workforce housing tax credit
River Run Apartments, formerly known as Vista Villa, had served low-income residents since their construction in 1971 without much improvement.
NeighborWorks Great Falls and Wishrock of Missoula partnered to purchase and renovate the property that is scattered around town.
Some of the units are located at 3201 11th Ave. S. and on Thursday, project partners and Lt. Gov. Mike Cooney gathered to celebrate the grand opening of the 96 units that will remain affordable since they’re being covered by a new 20-year project-based Section 8 housing assistance program through the Montana Department of Commerce and will be restricted for 45 years to families and individuals earning 50 to 60 percent of area income or less, which equates to about $25,685 for a one-person household.
Cooney said affordable housing is an issue statewide and it affects economic development since employers struggle to recruit and expand if housing isn’t available in a community.
Tyson O’Connell, vice president of Wishrock, said the project included about $5 million of improvements and construction took about 12 months. The project included the installation of new flooring, appliances, cabinetry, windows, doors, hardware, plumbing fixtures, roofs and siding, as well as new heat pumps, according to the Montana Department of Commerce.
Wishrock and NWGF partnered to put together funding sources including tax exempt bond financing of about $9 million and an allocation of 4 percent housing credits from Commerce’s Montana Housing, which produced about $4.5 million in equity proceeds from Boston Financial Investment Management. Prudential Real Estate Finance provided an $8.3 million HUD-financed 221(d)4 loan for construction and permanent debt.
In 2015, NWGF received a $700,000 Strong Communities Fund grant for the project, in partnership with Wishrock and the Bank of Montana. That was used to fund construction costs. The project also received a property tax exemption from the Montana Department of Revenue.
O’Connell said that 180 people were living in the complex when construction started and it was challenging to complete that much construction while shifting residents around so they weren’t without housing.
Asbestos was also discovered in the units, requiring abatement work.
Sherrie Arey, NWGF executive director, said the project was one of the first residential rental projects for the organization, initiated by Neil Fortier, who recently left NWGF.
“Affordable doesn’t mean cheap,” Arey said, nor does it mean low quality.
Sheila Rice, former NWGF director who’s now president of the Montana Housing Coalition, said Montana needs 18,000 more apartments and homes that are affordable to low income individuals.
She said that since 2007, the rate of homeownership in Montana has dropped from 70 percent to 66 percent.
One way to address the lack of affordable housing, Rice said, would be to create a Montana State Workforce Housing Tax Credit.
Legislation is being drafted, Rice said, and is expected to be introduced in the first days of the 2019 legislative session.
Rice said a group of housing advocates are working with the local government interim committee at the Legislature, particularly with Rep. Adam Hertz of Missoula.
She said they’d be bringing the issue up again during the committee’s July meeting.
The concept is for the state to create a 4 percent tax credit that could be layered with federal funds. Such a tax credit would allow funding for hundreds of units to be built or rehabilitated annually, Rice said.
Nebraska passed a workforce housing tax break in April.
It’s a hard budget year coming up for the Montana Legislature, Rice said, but she’s hopeful a workforce housing tax credit would be approved since it could bring in housing equity funds and potentially more jobs.