The Flathead County Courthouse, pictured on Dec. 31, 2024. (Micah Drew, Daily Montanan)
In front of a standing-room only crowd, the Flathead County Commissioners voted Tuesday to turn down a $9 million investment in affordable housing provided by the state and private entities, one of just three counties to vote against the homebuyer assistance program.
The 2023 Legislature enacted the Montana Community Reinvestment Plan through House Bill 819 to allocate $56 million in state funding to provide homebuyer assistance to low- and middle-income residents.
The program was intended to address the rising cost of housing across Montana, where the median home price hit a record high $452,050 last month, according to Zillow’s Home Values Index. In Flathead County, the median home price is more than $650,000, making it one of the state’s most expensive places to live.
However, the county commission in a 2-to-1 vote turned down the funding, which will instead be reallocated to the counties that opted into the program.
“I’m convinced HB 819 takes money from the pockets of you, the taxpayers, and redistributes it across the state of Montana,” Commissioner Randy Brodehl told the crowd of more than 50. “I’m also convinced the risk to the taxpayers who are providing the money and the risk to the first-time homebuyers is not a reasonable option for the Flathead.”
Commissioner Brad Abell was the only vote in support of the funding.
During the last few weeks, the Flathead County Commissioners heard public comment from dozens of constituents in person and received more than 50 written comments. Overwhelmingly, the comments favored accepting the funds.
“I want to have the ability to buy a house, I’m ready to start building my own equity instead of paying rent. I want something that is mine and can’t be sold out from under me. I want stability and autonomy over my life and to feel safe where I live. Owning a home would provide this to me,” Jill Davis, a long-time renter in the valley, wrote to the commissioners.
“Everyone I know has a housing story. Everyone is trying to buy their first home or people are having to move away because they can’t buy a house or afford rent,” Davis told the Daily Montanan in a subsequent phone call. “I feel like it’s the No. 1 problem we have in Montana right now. We’re drowning out here, and it makes no sense to block this.”
Several organizations and businesses submitted letters in support of the program, including the Northwest Montana Association of Realtors, Kalispell Chamber of Commerce, Logan Health, Applied Materials and officials from all three cities in the county.
“The opportunity to benefit from $9 million in resources dedicated to workforce housing and homeownership is crucial for our community,” wrote Kalispell Mayor Mark Johnson.
“HB 819 isn’t the total solution, it’s just one piece of the puzzle that can help drive additional entry level homes to be built at NO cost or risk to our county,” wrote Whitefish Finance Director Lanie Gospodarek. “This isn’t big government taking over, it’s investing the benefits of our recent economy on our future tax base and partnering with private investors to leverage the funding.”
During the meeting, Brodehl spoke at length about HB 819, which he previously called a “socialized program.” The bill also included $169 million for other housing-related programs. Even though the county commission was only voting on a single $50 million program within the bill, Brodehl decried the full $225 million fiscal note and said he was “disappointed” in anyone who only talked about the portion of the money allocated to the community reinvestment plan.
“Of the $225 million of taxpayer money, it could be paid back to the taxpayers,” Brodehl said, pointing to the property tax rebates issued by the state this year. “It could have happened with this money.”
Community Reinvestment
House Bill 819, passed by the 2023 Legislature with bipartisan support, created several programs designed to address housing issues across the state. One of those, the Montana Community Reinvestment Act, created a deed-restricted housing program funded with $50 million of state money that will be allocated proportionally to counties based on their gross domestic product.
An additional $6 million is set aside for counties near state-owned facilities that house at least 100 inmates — Deer Lodge, Custer and Powell counties — as a state workforce housing incentive.
The bill requires counties to affirmatively opt into the program and designate a Community Reinvestment Organization — a federally recognized charitable organization or certified economic or housing development organization — as a partner to oversee the program and its funding. Partner organizations are also responsible for matching the state funds with private investment, doubling the total pot of money to $112 million.
Under the homebuyer assistance program, residents who make from 60% to 140% of the area median income qualify for interest-free loans up to 30% of the total purchase price for a home. The program also caps monthly payments for the home at 30% of gross income and deed restricts the houses so owners can only realize a 1% per year increase in value with excess going back into a fund to perpetuate the program.
As of Tuesday afternoon, the last day for counties to opt into the program, just three counties — Flathead, Sweet Grass and Fallon — had voted against the funds and two others — Richland and Daniels — took no action, effectively opting out.
Richland County Commissioner Duane Mitchell told the Daily Montanan that the program was a “bad deal” that was akin to socialism, and applauded the actions of the Flathead commissioners for “talking sense.”
Making their case
In person on Tuesday, nearly 20 members of the public talked about seeing friends, family members and young professionals move away due to housing costs.
Drew Rafkin, a Kalispell resident, told the commissioners that the implications of HB 819 are still important to her even though she’s already a homeowner.
“I’d be happy if all my taxes went to House Bill 819 because I have watched so many smart college students and young entrepreneurs move out of the Flathead Valley, most recently, and not come back,” Rafkin said. “I think it would really be a spark to this community, and if we want our small businesses to stay open, we need to help them give their workers a reason to stay.”
Three opponents to the housing funding spoke before the commissioners, including Doug Adams, a Republican who unsuccessfully challenged state Sen. Dave Fern in November’s election.
“As a small business owner, I am acutely aware of the impact of the high cost of housing on potential employees,” Adams said. “I submit to you that these housing problems are my employees’ problems, and they’re my problems. They’re not government problems, and I don’t need government solutions.”
Montana Rep. Tanner Smith, a Republican from Lakeside who mounted an unsuccessful primary challenge to Gov. Greg Gianforte, also gave public comment and told the commissioners that they needed to “stand on our conservative principles,” and turn down the money.
Smith voted against HB 819 during the session and said it was “rammed through at the governor’s request.”
“A lot of people say, ‘This isn’t politics,’ but this is politics. This is Democrat policies in California that created the exodus to Montana,” Smith said. “As Republicans, what we can’t do is have a knee-jerk reaction to fix a Democrat policy problem by more Democrat policies.”
HB 819 was sponsored by Republican Rep. Paul Green of Hardin, and passed the GOP supermajority-controlled legislature 67-32 in the House and 42-8 in the Senate
During discussion on the resolution, Commissioner Pam Holmquist said she had spent time asking questions and learning about the bill and still couldn’t support the measure.
“I truly believe that government should never be in the business of picking and choosing winners and losers. That’s not government’s role. The best thing the government could do is work on simplifying the rules and regulations that builders have to go through to provide the housing that we need,” Holmquist said.
She added that she was also concerned about the deed restriction and that homebuyers in the program could end up in debt.
“It’s really hard for me to move forward with a program that has the potential to put these families into a worse position than they are now,” Holmquist said. “I cannot support this.”
Holmquist also said she had information from “reliable sources” that the housing market is correcting itself. “The last thing that correction needs is injection of government funding.”
Commissioner Abell, the lone vote in favor of the program, said that while he found flaws in the program, he supported the resolution, not least because the money would be spent by other counties if turned down.
Speaking on the phone after the vote, Commissioner Brodehl said for him the issue wasn’t whether to support the community reinvestment program and assign a partnering agency, but about the full HB 819 legislation.
One part of the bill he spoke about during the meeting was a section instructing the state Department of Natural Resources and Conservation to evaluate whether state trust lands could be used for potential attainable workforce housing development, which Brodehl said he has concerns about.
“The (community reinvestment) bill is wrapped into one bill. It’s not broken into different bills,” he said, adding that he didn’t feel confident that the legislation was written in a way that clearly delineated how the full $225 million would be spent. “In my mind, the entire bill was in play.”
Only one section of HB 819 allows a county to make an affirmative decision about the bill’s funding by selecting a partnering agency. No other part of the bill text allows for county input.
Ian Fleming, a housing advocate with the nonprofit United Today Stronger Tomorrow, said he was disappointed in the commission’s vote and the extent at which Brodehl in particular got hung up on the full text of the bill.
“It became abundantly clear to me that this became a hearing on the whole bill, not just the part that was actually on the table,” he told the Daily Montanan. “I’m sure the rest of the counties will be thrilled to get their share of Flathead’s $9 million. It’s an extra windfall for Bozeman and Missoula.”
In the final stretch, counties schedule votes on homebuyer assistance
On Tuesday, the deadline for counties to opt into the program, the Valley County Commission voted affirmatively to accept $310,000 in pre matched funds. On Monday, Sanders County voted 2-to-1 to accept their $360,000 allocation as well.
“Personally I’d rather see the money go towards bridges,” Sanders County Commissioner Tony Cox told the Daily Montanan. “But the goofy part is, if you turn it down, it’ll get spent by someone else,”
Cox acknowledged that the Legislature could have left the counties out of the process entirely and allocated the funds directly, and said he understood that some elected officials don’t like accepting grants or taxpayer money allocated from higher levels of government.
“It’s just like feeding the deer. Feeding wildlife is illegal. If somebody does it, do you punish the deer or punish the guy feeding them? Don’t punish us for accepting the money,” Cox said. “I think we have an obligation. If they’re going to offer funds to help out the community, we should do it.”
Of the state’s 56 counties, only five voted against the program or took no action, declining the funds by default. The Daily Montanan was unable to confirm the status of Sheridan or McCone counties.
Flathead County was the only populous county to opt out of the funds, and the allocated $4.5 million and matching funds will be redistributed.
“We can really benefit a lot from the state money,” said Roosevelt County Commissioner Gordon Oelkers, whose county was another late vote to opt in. “Add in the matching funds, and if we get a little more because other counties didn’t want it, we can benefit even more. It could only be a positive thing for our county.”