Affordable housing bill gets preliminary House approval

Despite broad support in a state legislative committee, legislation intended to clarify a type of affordable-housing arrangement gaining traction in the Flathead Valley faced substantial opposition in the Montana House of Representatives on Monday.

Sponsored by Rep. David Fern, D-Whitefish, House Bill 200 would add a definition for “community land trusts” to Montana law, which affordable-housing advocates, local banks and others say would ease the process for establishing the trusts.

A community land trust is a type of nonprofit organization that purchases properties to provide affordable housing. As a safeguard against rising land values that price out many prospective home buyers, the nonprofit sells the homes on the property — either existing houses or new ones constructed by the land trust — but holds the deed for the land itself.

Given the dearth of affordable housing in the Flathead, it’s no surprise that the Northwest Montana Community Land Trust is the largest of the three such organizations in the state. Marney McCleary, the organization’s housing director, said in an interview Tuesday that the land trust, founded in 2012, currently has 50 families living in price-controlled homes in the Flathead and hopes to add more to the fast-growing region.

But she added that one of the land trust’s primary obstacles is that lenders, appraisers, title companies and others frequently don’t understand how the housing arrangement works.

“When people get on the [Multiple Listings Service for real estate], they don’t know where to look for a land-trust home — nor do a lot of the real estate agents know where they are,” McCleary said.

She added that even when the organization hires appraisers, it often must explain the nuances of the affordable-housing arrangement to them. It’s a challenge that extends to many of the real-estate professionals involved in the sale and purchase of homes.

“They’re more comfortable is they know it’s accepted at the state level and it’s defined,” McCleary said. “It’s benefiting everybody that touches a land-trust home.”

THE BILL won broad approval in the House Local Government Committee last week, passing 21-2. But when it was taken up by the full House on Monday, several Republican lawmakers spoke against the measure, arguing whether it was necessary.

Responding to Fern’s assertion that community land trusts could benefit less urban parts of the state such as the Baaken area, House Speaker Austin Knudsen, R-Culberton, said he believed the bill would reduce the state’s property-tax collections.

“The specter of ‘affordable housing’ and the idea that somehow, the state of Montana has to inject itself into what I think is a created crisis, I think is just a red herring,” Knudsen argued. “I don’t believe there is an affordable housing crisis. I think that private industry and the private sector will find ways and do find ways to address the need for affordable housing.”

As a member of the committee that approved the bill, however, Kalispell Rep. Derek Skees rebuffed several of his fellow Republicans and noted that the arrangement does not remove the land from property tax rolls.

“As far as taxes, when the county or local government that produces this local community trust, when they’re looking to allow it in their districts, they set up the procedure by which the taxes are paid,” Skees said. “This isn’t an avenue where the local governments aren’t going to get their taxes.”

Following Monday’s floor debate, House Bill 200 received a preliminary 59-41 vote on its second reading. A final, third-reading vote will be held today.

If approved, the measure would then head to the Senate for consideration.

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.