Affordable housing has been an issue with the City Commission for the past 25 years that I’ve lived in Bozeman.

It’s a problem now and it will always be a problem. Here’s why —

The Definition of Affordable

What is affordable housing? Affordable to whom? Let’s look at some known facts.

According to the US Census there are four times more income earners in the top 20 percent of all income earners than there are in the bottom 20 percent.

What does that mean exactly?

It’s means that for most people their income level is temporary. People move up the income ladder over time by gaining knowledge and experience.

They make themselves more valuable to an employer as they age.

So, qualifying for affordable housing today means they might not qualify next month or next year.

Housing Rule of Thumb

A common rule of thumb says that your housing cost should be 30 percent of your income or less.

Simplified math would tell us if you make $50,000 a year then you could handle a mortgage of $1,250 a month. But unfortunately, life is not that simple.

A $1,250 mortgage would not get you much of a home on Bozeman. Even if your spouse also worked and brought in another $25,000 that could boost you up to $1,875.

As you can see something as simple as making $50,000 a qualifier, — an increase to $75,000 might not be.

Lenders typically want borrowers to carry a debt-to-income ratio of 42 percent or lower, often putting a mortgage out of reach for many low income families.

The recent tax bill includes a 12.5 percent increase to the Low-Income Housing Tax Credit.

This credit would assist low income families with things like down payment reductions and mortgage payment subsidies.

You Can’t Force Markets To Work

So how will that be resolved? Someone who’s currently living in affordable housing suddenly gets a raise or the spouse gets a job and now make too much to qualify are now keeping someone out who does.

Should they be forced to move?

Anytime government tries to artificially manipulate markets bad things happen. There are just too many unintended consequences for affordable housing standards to work for every case.

There’s no cookie cutter or one size fits all proclamation that will cover all the bases. There will always be those special cases.

The government doesn’t force automobile manufactures to build cheaper cars. No one tells a farmer to grow cheaper food.

So how can government force builders to build cheaper homes? What effect if any does affordable housing have on the value of nearby properties?

Some Final Thoughts

Not everyone can live where they’d like. Bozeman is an expensive place to live.

That’s why God made Three Forks, Manhattan and Livingston. They are great places to live with wonderful people. And for the most part all three are more affordable than Bozeman.

Maybe another word for affordable is location.

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