FIRST WORKFORCE HOUSING PROPOSAL FLYER AND SPEECH       Sept 12, 2023

YOU CAN WATCH THE 3 MIN SPEECH HERE STARTING AT MINUTE 11:07

NEED FOR WORKFORCE HOUSING:

Last year we lost good teachers who felt they had no choice financially but to resign from their new teaching careers.  I spoke with two of these teachers, both were highly skilled people that were making huge impacts on our students.  Although they both had skills and were great with students, they didn’t have the years of experience or the costly post-graduate credits required to move up the district salary matrix enough to afford our valley’s soaring cost of living.  Both said that IF they had an affordable place to live, they would have chosen to stay with the district.  (Testimonial from Jaret Stump, GHS Teacher)

ACCORDING TO THE YELLOW BUS TOUR GIVEN BY SD5 ADMINISTRATION:

Median home prices in the Flathead have risen to over $500,000 and rents have skyrocketed the last few years.  They were talking about how local families are being pushed to the limits of financial security.  I’m wondering how many new teachers who were listening thought that they might be in that same struggle right now.   Wouldn’t it be great when talking to new teachers or applicants in our district, if we could add…”but we do offer some workforce housing for those who need affordable rent.”

WORKFORCE HOUSING PROGRAM GOALS:

Our goal is to bring together our school board, district administration and teachers union to create a program for teachers who could use affordable housing to help begin their teaching career in our valley.  This collaborative committee would search out the means and ways we could create affordable housing by researching and pursuing grants as well as reaching out to our community partners.

WORKFORCE HOUSING PROJECT IDEAS:

·       Use existing school district owned property that is vacant to… 

o   Rent school district owned houses to school district staff with conditions of employment

o   Remodel vacant buildings into rental units

o   Create lots on vacant land for mobile home rentals or ownership

·       Work with community partners to secure affordable housing where needed

WORKFORCE HOUSING ISSUES:

·       Being landlords is too much work! …but that’s what property managers are for

·       How do we fairly select possible candidates?

·       What do the lease terms and conditions look like…tying lease to continuing employment.

WHO IS ALREADY DOING WORKFORCE HOUSING?

Many smaller districts across the state of Montana have been doing this for many years, with Big Sky leading the way over the last few years (see articles on the back).  Places that are having trouble with skyrocketing housing costs can really benefit from these programs, which puts the Flathead Valley as one of the top places where programs like this are needed.

WHERE CAN WE START?

Please email me if you are interested in joining in this effort.  On the back of this flyer, I have listed several articles and websites that are currently involved in these programs.  Please email me at  stumpj@sd5.k12.mt.us  for a digital copy with clickable links. 

BENEFITS TO HAVING A WORKFORCE HOUSING PROGRAM:

·       REAL DRAW FOR ATTRACTING THE BEST STAFF FOR FUTURE EMPLOYMENT

·       GOOD LONG TERM INVESTMENT WHERE DISTRICT WOULD BE GETTING PAID BACK OVER TIME

COMMUNITY PARTNERS ALREADY INVOLVED IN WORKFORCE HOUSING:

Andrea Davis … chair of the Montana Housing Coalition, and runs Homeward, a non-profit that is building affordable housing around the state.  She is now running for Missoula Mayor.

GOVERNMENT PROGRAMS FOR WORKFORCE HOUSING:

https://housing.mt.gov/Community-Housing/Housing-Trust-Fund

https://www.usgrants.org/montana/housing-grants

https://www.rlacf.org/programs/resilientcommunity/housing/

https://nbcmontana.com/news/local/4-montana-cities-receive-affordable-housing-grants

           Here is an example of how to do it:   https://bigskyhousingtrust.com/

Montana Community Reinvestment Plan Act – Montana House Bill 819 - 2023

Section 1. Short title. [Sections 1 through 8] may be cited as the "Montana Community Reinvestment Plan Act".

Section 2. Purpose. The legislature finds and declares the purpose of the Montana community reinvestment plan act is to begin to address housing needs and offer a regional, community-based solution to creating affordable, attainable workforce housing infrastructure in the state.

Section 3. Definitions. As used in [sections 1 through 8], the following definitions apply: (1) "Attainable workforce housing" means housing of a cost that an eligible household would spend no more than 30% of gross monthly income for a mortgage payment, property taxes, and insurance. (2) "Community reinvestment organization" means the regional entity or entities established in [section 6] or a certified regional development corporation, a certified development corporation, a community housing development organization, an economic development association, or a community development financial institution.

As usual for state programs, this is cumbersome with red tape, but is an example of the ultimate need for continuing hiring teachers at entry level positions in today’s crazy housing market.

https://montanafreepress.org/2023/05/10/how-the-montana-legeislature-tried-to-tackle-housing-crunch/

Workforce Housing Flyer - Rental Lots Example    Oct 10, 2023

YOU CAN WATCH THE 3 MIN SPEECH HERE STARTING AT MINUTE 20:10

Who is doing workforce housing?

Looking into it:

Montana School Districts already doing it:

Missoula Whitefish

Gardiner       Ennis             West Yellowstone      Pryor      Savage

Geyser          Big Sky          Trail Creek                   Dixon     Swan Valley

Why are they doing it right now?

           I recently spoke with two new teachers here in Kalispell School District.  One is renting a one-bedroom apartment for $1100/month, and another teacher is paying 1500/month for a 2-bedroom apartment, which is tough if you are a single parent with children like this employee of School District #5.

           It has already become very challenging for working class people to live in our area.  Investing in workforce housing would pay for itself over time, making it a wise investment financially as well as investing in building a strong workforce.

What kind of investment would it take?

           If we borrow $200,000 out of the IAF, which luckily is meant for one time money like this project, it would be an investment with so many positive net gains, that it is simply ridiculous to not pursue a workforce housing project at the end of this school year. 

What housing can new teachers currently afford?

           Evidence that our collectively bargained salary matrix is already not working for new teachers is the fact that we are starting new teachers with zero experience on year 2 of the salary matrix rather than year 0.  At this rate, new teachers this year are set to make $38,197.  Dividing this by twelve gives a monthly salary of $3183 before taxes, TRS, and insurance deductions that removes around 33%.  So take home pay is around $2133/month.  Using the common 30% rule (that housing should not be more than 30% of your take home pay), this would mean new teachers could afford around $640/month or less for rent or a mortgage payment.  This is the time that our district could help provide an affordable option to those in need.

           If a teacher could afford to take some post graduate courses to move over two lanes, after 5 years they could increase their pay to $50,173.  This would be $4181/month minus 33% for taxes, insurance and TRS, leaves $2801 take home pay.  The 30% rule would indicate they could then afford just over $840/month for housing.

The Kalispell School Board already has too many big items on their plate this year.

This is a plan we could implement and complete over the summer break and have it ready for early August.

With everything the Board deals with year-end and year-out, there will likely not be a “good time” where it makes more sense to begin looking into workforce housing.  We should start now…please consider the example on the back of this page.

Rental Lots Option Example:

Set up a plan for installing five rental lots on property the district already owns.

           For $200,000, we could invest in creating 5 rental lots for mobile or modular homes.  The district could purchase two or three of these homes, and rent them out at below market rents to new teachers.  

           Teachers could also have option of buying their own mobile home to place on the district owned lots and pay the district lot rent.  This would allow them to build equity in a starter home, and then use that equity for down payments 5 years down the road on other housing.

           The district already owns property on the outskirts of Kalispell in areas that have no zoning requirements.  Therefore, we would only have to do county permitting for the septic system to determine how many units that system could hold, an electrical permit to provide power, and look into creating a community well to supply water.

Item

Cost Estimate

County Septic Permitting and Septic Tank Installation

$20,000

Community well installation (or upgrade existing well)

$15,000

Electrical permitting and service installation

$10,000

Land leveling and roads

$20,000

2 bed 2 bath 14x70 mobile homes ($35,000 each)

$105,000

Moving and setup fees

$30,000

Total:

$200,000

           With 5 units each paying $500/month plus their own utilities, the district would be paying back the loan to the IAF within 8 years.  (This assumes $2000/month net operating income after $500/month for property management and maintenance fees)  After that 8 year period, all the money leftover at the end of the year could go back into the workforce housing budget or IAF, etc., creating a $24,000 profit each year on that short-term relatively inexpensive investment. 

Workforce Housing – Remodel Existing Property Flyer    Nov 14, 2023

YOU CAN WATCH THE 3 MIN SPEECH HERE STARTING AT MINUTE 14:24

Can We Wait For Workforce Housing?                                                                                                               After speaking with some local builders and looking into the state, county, and local government efforts into providing affordable housing for our workforce, I have come to the conclusion that those agencies are not going to be able to solve this problem.  For example, the new proposed Alpine 93/40 and Edgewater developments recently approved near Whitefish will provide a combined 252 new housing units when completed over the next few years, with 29 units deed-restricted as affordable housing (Flathead Beacon).  This is great news, but these projects that are being proposed all over the state are only building around 10 percent of their units as affordable housing, which means the other 90 percent are going to be rented at market rates that our local school employees simply can’t afford.  This is like putting a Band-Aid on a cut to a major artery on your arm…it may look like it’s better than nothing, but you are still going to bleed out!  The problem of affordable housing requires some major work, not simply adding a band aid.

Why Can’t Builders Build Affordable Housing?                                                                                          One major obstacle in this effort is how capitalism affects the process, making most new construction projects unaffordable at this time.  According to a local builder, making new affordable housing is difficult in our valley due to the different stakeholders and high building costs.  First, the land must be purchased, and the people selling the land want to make as big a profit as they can.  Second, the builder needs to purchase the materials and pay labor to build the housing, and at the end they need to make a profit based on their total costs, or they will go out of business.  Lastly, the purchaser of the finished housing would like to sell them or rent them out but needs to make a profit to cover all the previous profits that were required to make the project happen.  This means that the landlords can’t make housing affordable without going out of business.  The stake holders are not to blame for having high rents.  That is just how our economy works.  To create workforce housing we need some way of removing the profit driven forces that build housing today.

Remodel Existing Property Option:

           Set up a plan to remodel some of the property that the district already owns. The district already owns properties that may allow for some minor to major remodels to accommodate workforce housing.  This would allow us to invest money into these properties in order to make them best suit our need today.  For the properties that are literally just sitting there currently vacant, this option would seem reasonable if not necessary to keep or improve their value.

Why Use Existing Property?                                                                                                                                 Using existing property allows the district to own and control the workforce housing in which we invest.  Since we already own the property, the stakeholder profit chain starts at zero.

How Can We Keep Construction Costs Low?                                                                                                    No matter what workforce housing option we choose, we can count on district staff and students to help by volunteering to help with the labor costs.  We have past and present teachers who have already agreed to volunteer some of their time during the summer to help build or remodel properties that would be earmarked as workforce housing for district staff.  These teachers can supervise student volunteers, which I believe would be eager to help from all of our clubs and activities.  Students with construction experience could earn valuable experience by continuing to work in their trade and gain skills and experience through remodeling construction. 

Option One – School District Community Center                                                                                                 Gut the building and transform it into a community center for school district employees.  The kitchen or breakroom that has existing plumbing and electric would be enlarged to a large kitchen space for multiple families to prepare meals.  The existing bathroom or bathrooms would be expanded and could be set up to share as community showers/bathrooms with multiple families to save costs.   The apartments then would just be living quarters with bedrooms, which is very inexpensive to build out.  Roads and parking would most likely already be in place. 

           I have read many articles from around the country where school buildings are being converted into affordable housing.  We could do this in our school district.  Each building would need to be reviewed and the total costs would be different depending on the work required and the layout design that we approve, but an general example is shown below.

Item

Cost Estimate

Demolition of existing interior

$10,000

Community bathroom remodel

$50,000

Community kitchen remodel

$60,000

(8) Two Bedroom Apartments

$80,000

HVAC remodel

$30,000

Electrical remodel

$20,000

Total:

$250,000

           With 8 units each paying $500/month plus their own utilities, the district would be paying back the loan to the IAF in around 7 years.  (This assumes $3000/month net operating income after $1000/month for property management and maintenance fees)  After that 7 year period, all the money leftover at the end of the year could go back into the workforce housing budget or IAF, etc., creating a $36,000 profit each year on that short-term relatively inexpensive investment. 

           This of course also keeps a useless property from eating up costs in maintenance and electricity as it just sits there.  All of those costs would be picked up by the renters, including the costs of hiring a property management company to run the leasing and day to day operations.

Option Two – Complete Demolition and Rebuild

           This option would be much more costly, but may fit some of our employees’ lifestyles much better than sharing a community-based option.  With a complete demo of the existing buildings, we could build duplexes, triplexes, fourplexes, townhomes, tiny homes, apartments, etc on property that the district already owns.  The benefits of this option would include being able to design the properties to fit our families exact needs, making them more desirable to employees with families, and that these new buildings would not break down as much (theoretically) therefore lowering maintenance costs.  The disadvantages would include increased building costs due to building from the ground up, as well as added planning costs associated with zoning, county permitting, architecture, etc.  These costs would surely drive up the rental or resale numbers, which would drive up the costs for our staff members to access the housing.  This option is also the most time intensive to budget, plan, and complete.

Workforce Housing Committee Notes                                           1/25/24

Possible properties:

·       Meridian Court – 1.5-2 acres – 4 stall garage with offices – old maintenance

·       South of Rankin –

·       Birch Grove

·       Home next to FHS

Tom Kolburn can get all the property listings.

Broad concensus to just do it with the house next to FHS to get ball rolling.  Also look at building an addition to make it fit 4 families would be even better.

The bare land rental lots idea was a little more hard to swallow, but I felt they were on board if we could make it work

Heather brought up point that the public won’t like seeing us spending money on workforce housing. 

I mentioned we need to promote it is an investment where the district will be paying the investment back plus interest as the teacher rents will all go back to the loan.  It will be a net positive to add to your income side of the budget…and teachers could maybe choose and option to have their affordable housing payments taken right out of their paychecks.  We would have to do a one year lease contigent upon having a contract for the year.  THIS NEEDS TO BE REPEATED AND PUT ON A SLOGAN

Re: Workforce Housing

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Jaret Stump <stumpj@sd5.k12.mt.us>

Wed, Mar 6, 9:20 AM

to Randy, Jaret, Liz, Alan, Mark, Greg, Heather

Hello Everyone!

    I wanted to share my notes from our property survey on Feb 14, as well as some of the property information that I have gathered on the properties since.  Please feel free to edit and add to the google sheet.  Each property we looked at has its own tab near the bottom of the spreadsheet.  https://docs.google.com/spreadsheets/d/1a452l86-8XsVUHWLgshTq5dkXrLI5LVAIZxWaqQm7BQ/edit#gid=1082047617

    I included the info from the county planning and zoning website as well as some photos and maps showing their location and current condition.  Thanks a bunch for your help and time looking into this!  I feel it is one way that we can really make a big difference in helping recruit and retain quality teachers.  Here are a couple next steps that I would suggest we start with once we have time to resume our conversation...

1.  Discuss transition of house near FHS.  From what I heard from everyone, this looks like a good option to start our program.  If so, when should we notify the current tenants that we will not be renewing their lease?  Should we schedule a walkthrough before they move out in order to plan for any remodeling needs?  (looks like this is a 4 bedroom/2 bath)  

2.  Discuss transition of old maintenance building.  What would the ideal floor plan be?  How many teachers and/or families would we be able to house here?  We need to get some estimates for replacing the roofing, as that is already an issue we need to resolve to preserve the building for any future use.

3.  Discuss the property boundaries of the Birch Grove Community Hall.  I discovered that SD5 owns the small strip of land that contains the building, but the property out in front of the building with the driveway and open space is not currently listed as owned by SD5 (see map on the google sheet for details).  We should look into this and call the county zoning to get more info on what is going on there.  (the number and geocode are on the google sheet also)   After that is worked out, then the next step would be to locate the well and septic drain field in order to plan adding any additional buildings.  We should also look into what the current use looks like and who may be living there or how often the community hall is used.

4.  Discuss the current use of the old storage building near Peterson Elementary that we drove by.  I couldn't find any district owned property there, so are we renting that land/building for storage?  Are there other properties like this that may have fallen off the district's radar over the years?

5.  Just a reminder that Randy said he had a realtor's card from someone who mentioned to him that Timothy Wise (current owner of the farm adjacent to Rankin Elementary field) would consider selling land to the schools but would not consider selling it for any other development.  Not sure if that is something we wanted to look into for future facility planning.

Thanks,

Jaret Stump

Glacier High School Science

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