New Montana law aims to keep people in their homes | Brunell

Montana’s legislature took the unusual step of exempting older, less-valued mobile homes from property tax as a way to stem homelessness.

The bipartisan legislation, which Gov. Steve Bullock signed into law last week, aims to keep people in their homes. It exempts mobile and manufactured homes worth less than $10,000 and at least 28 years old from taxation starting next year.

In Montana, a state with just over a million people, there are more than 22,000 residences where owners are in danger of losing their homes and being evicted if they can’t pay their taxes. Legislative staff in Helena estimates at least 45,000 people would end up homeless (figuring an average two people live in each home). The impact of taxes forgone is $170,000 annually.

Proponents argued the state spends more money sending out delinquent tax notices and hiring sheriff’s deputies to post those notices than the taxes collected, according to the Billings Gazette. Often mobile home owners who lose their homes have no place to go. Consequently, the state scrambles to find and pay for temporary shelter while those confiscated mobile homes are sold at auction to the highest bidders.

Missoula community activist Svein Newman told the Gazette many of those homeowners are single working parents and seniors living on fixed incomes. If they lose their home because of a $70 tax bill, they cannot afford a security deposit on an apartment. The reality is replacement housing beyond their financial means.

According to 2017 research by Harvard University, nearly 40 million Americans live in housing they cannot afford. Homeownership has gone down and rental prices keep going up, meaning that millions of residents are forced to pay more than they reasonably can.

For example, Zillow.com reports the median price of a three-bedroom home nationally is $226,700 (March 2019). In Seattle, it was $334,000 and $309,400 in Portland.

If you live in Helena, a two-bedroom apartment with washer and dryer rents for $900 a month. Comparatively, rent in Seattle for a two-bedroom without washer and dryer is $1,600, according to the most recent National Apartment List Rent Report.

One-bedroom apartment rents in King County have climbed 53 percent over the last five years and for every 5 percent increase, 258 people in Seattle become homeless, a Zillow study found.

Finding replacement housing is expensive for taxpayers. In its award-winning 2017 report, the Puget Sound Business Journal (PSBJ) found that building one affordable apartment in Seattle costs $300,000. The price for building 12,000 units is $3.6 billion.

Washington’s Department of Commerce, which manages statewide data on homelessness, calculated how much it cost for a homeless person in King County to exit to permanent housing for three types of programs: emergency shelter, $14,207; transitional housing (temporary stays in a subsidized project), $12,021; and, rapid rehousing (rental subsidies on the private market), $7,351.

This situation is particularly hard on the working poor. Throughout the U.S., Harvard researchers found, 70 percent of lowest-income households face severe housing cost burdens. That means more than half of their income goes toward housing.

Addressing homelessness is complicated. The growing economic and human impacts are straining budgets at all levels of government, draining charitable organizations and impacting tourism, local merchants and open spaces.

PSBJ spent six months examining the budgets of dozens of nonprofits that work on the issue; city and county budgets; police and emergency calls to encampments and resource centers; hospital services; permanent and temporary housing; and drug treatment and outreach. In 2017, the estimate was $1.06 billion. It now could be more than $2 billion.

Montana’s new approach is worth tracking. Hopefully, it is a prototype which works.

Don Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com

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