The Great Falls Development Authority released its housing market demand assessment this winter and followed up on the data with a housing summit on March 15.

The assessment, conducted by Concord Group, projected that there is demand for about 450 new housing units per year in Cascade County over the next 10 years.

Based on the expected split between owners and renters, the assessment projected that it breaks down to a need for 190 new rental units and 250 new for sale/new ownership units per year over the next decade across income levels.

[READ: The full housing market demand assessment]

The Great Falls Development Authority, NeighborWorks and the Realtors association commissioned the housing study last fall.

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Adam Seidman of the Concord Group said that housing demand is driven by job growth; in-migration and housing stock.

He said that Moody’s projects about 2,000 new jobs in the Great Falls region by the end of 2026, though some of those are jobs coming back that were lost during the pandemic and some are different than what has been lost.

Seidman said that job growth is a major factor in housing demand and that projection could fluctuate, but with an already apparent lack of housing stock, the influx of people could compound the problem.

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Seidman said that in-migration is what captures the attention in many conversations but is less of a factor normally, though the pandemic has disrupted those patterns. Montana and Great Falls are seeing an influx of transplants but not to the magnitude that some think.

“This is the most affordable of all the Montana metros,” Seidman said of Great Falls, “and Montana is already affordable,” making it an attractive place to people living elsewhere.

Available housing stock plays a part and “by far, Great Falls has the oldest housing stock of any of the Montana metros,” Seidman said.

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Seventy percent of Great Falls housing stock was built before 1980, Seidman said.

Only 5-6 percent of rental housing stock was built after 2010, he said.

Between supply and demand, there’s a gap of about 900 rentals and about 2,200 for-sale units over the next decade, Seidman said. That’s a conservative estimate, he said, and takes into account planned housing projects, so the gap is likely larger.

There’s a need for housing at all price points in Great Falls he said.

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The pandemic has also significantly increased construction costs and slowed supply chains, further compounding the challenges for new residential construction.

Seidman said that multifamily projects often don’t make financial sense for developers.

At the affordable level, which is typically 60-80 percent of median income, there are financing options to help get those built, particularly through federal programs.

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It’s “almost impossible to make the numbers work for workforce housing,” he said, since there are no similar subsidies or financial mechanisms for housing in that price range, which is typically 80-120 percent of median income.

“The question of workforce housing comes up across the country, I’ve not seen anyone solve it yet,” he said.

Seidman said there’s a mismatch in the Great Falls market of income levels versus the prices of housing.

People who can afford higher price points aren’t finding housing stock so they’re taking more of the lower end housing stock, which can drive up the prices, making it even more unaffordable for people in the workforce and affordable housing income brackets.

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He said that housing production will likely include more of the same housing that’s already being developed, but the demands and costs create the opportunity for different styles and types of housing, such as townhouses, condos, single family rentals and smaller units if the developer can make it pencil.

“You can talk about demand all day long, but if developers can’t make the numbers work, it won’t happen,” Seidman said.

High construction costs are going to make it even tougher to get higher density housing built, Seidman said.

He said there’s good models with NeighborWorks Great Falls and their owner-built program and other efforts to create workforce housing.

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There aren’t many smaller units available here, such as studios or one-bedrooms, Seidman said, which makes sense with the older housing stock, but “you need more diversity of housing types.”

Changes to zoning could spur some development, but he said that changes to zoning in other communities “hasn’t yielded much yet.”

Seidman said it could have different impact here since it’s more affordable over larger communities elsewhere, but “I don’t think it’s the silver bullet at all, but it’s a tool.”

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Seidman said that he’s seem some communities use tax abatement as an incentive for the development of affordable and workforce housing.

Currently, Montana law does not provide a mechanism for tax abatements for residential development, but it does for commercial and industrial development,

Craig Raymond, city planning director, said there are other tools that the city uses to help with development when possible, such as tax increment financing districts, the city’s revolving loan fund for housing development, and the federal Opportunity Zones.

During the summit, Terry Thompson, Great Falls Association of Realtors director, said that the impact of the pandemic to the local housing market was notable.

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She said that in January 2020, the average median house price was $180,000 and by December 2020, it had risen to $211,000.

By early 2021, it was up to $217,000 and as of February 2022, it was $266,000.

The number of days on the market dropped from the 60s pre-pandemic to a low of 11 days in August 2021 and was up to 23 days in December 2021, Thompson said.

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She said that about 90 percent of houses were selling at their list prices pre-pandemic, which also meant real estate agents were doing a good job at pricing, but by June 2021, 102.5 percent of homes were going for the list price or more.

Thompson said that meant it was the year of investors and out of state buyers, with a negative impact to first time homebuyers and locals.

There are several housing projects in the pipeline and some in the very early stage of development.

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Those already underway include student housing for the new Touro medical school campus in Great Falls, just south of Benefis Health System; and the Milwaukee Station project that has not yet started construction, but the developers said during the summit that they hope to start this fall.

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Roger Becker of Vibe Construction is building 26 condo units at 13th Street South and 24th Avenue South, near the Castle Pines neighborhood.

He said that it will include a mix of duplexes and triplexes that will all have three-bedroom units.

Several new housing projects are planned, but are in the early stages of the process.

Spencer Woith, a local engineer and developer, is planning a 264-unit apartment complex at 7th Avenue North and 52nd Street, across the street from the city soccer complex.

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The project, Discovery Meadows, includes four buildings and he’s planning 48-units for the first phase.

The property is in the county so it will require annexation and zoning from the city to use city water and sewer services.

Woith said he’s in early discussions with the city about the project but is hopeful to start construction in the falls.

Sherrie Arey, NeighborWorks Great Falls director, said they’re in the early planning stage for a 123-acre properly they purchased last year near Highland Cemetery. The property is in the county so will also need annexation and zoning actions.

Arey said that they’re likely going to use the property, in part, for their next owner-built home cluster, but also other types of housing at all income levels.

Arey said they’re currently interviewing engineering firms, then they’ll start discussions with the city and county to subdivide and annex the property. They’ll also get cost estimates for bringing utilities to the area and conceptualizing the neighborhood. Funding sources and the federal program guidelines will impact the development of the property, she said.

NWGF’s aggressive timeline for the first phase of the project, Arey said is:

• Spring 2022: engineer in place
• Spring/Summer 2023: city and county agreements in place
• Summer 2024: infrastructure work begins
• Spring/Summer 2026 first build, want to be ready to move dirt by fall 2025

An attendee asked Woith how developing in Great Falls compared to Missoula and Bozeman since he also has projects there.

“It’s extremely frustrating” to do work in the other communities, Woith said. The cost of living is so high in Bozeman and Missoula they’re seeing high turnover in the planning staff since they can’t afford to live there.

He said that city staff in Great Falls are easier to reach and have conversations with. Woith said that, as a developer, he doesn’t always like the answer, but “they’re willing to work with you. It’s much better than Bozeman or Missoula.”

The summit also included a panel of employers who discussed their hiring needs and expansion plans and how housing is playing a part.

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Brian Patrick, director of business operations for Great Falls Public Schools, said that they hired 104 teachers, about half were from Great Falls.

Bruce Robinson of the Great Falls Clinic, said their expansion is underway and within a few years, they expect to have quadrupled their staff size and are projecting to add about 160 new full-time employees.

Forrest Ehlinger of Benefis, said they hired 754 people in 2021 and 70 of those came from out of state. He said they have employees in need of housing across all income levels.

Marlena Halco, Calumet, said they have 300 contractors on site now for the conversion to the renewables project. From July through October, she said they’ll have 600-700 contractors on site so they have an immediate need for temporary housing.

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The conversion to renewables has added about 25 new jobs so far, she said, and will likely add a few more in the future.

Craig Raymond, city planning director, asked the panel what consideration their companies have put into corporate housing or other options for employees, particularly in terms of short-term housing while they look for permanent housing.

Robinson from the Clinic, said that they started working on that, such as leasing or purchasing homes for employees while they look for permanent housing.

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Patricia Sulkin, provost for Touro’s local campus, said they’re also looking into temporary housing options for employees but the current housing market gives them limited availability.

Ehlinger, said that Benefis owns the land next to Talus Apartments and it could potentially be used for housing in the future.