by William Skink
The article about housing going up,up,up in Missoula has a new wrinkle with the pandemic, and that’s a focus on whether or not more out-of-state buyers are flooding the market.
Wade through all the speculation and at the end of the day it doesn’t matter because the result is this:
…a new report from the Bureau of Business and Economic Research at the University of Montana shows that Missoula housing prices continue to soar.
The median sale price of a Missoula home in 2019 was around $315,000. According to economist Brandon Bridge, the first few months of data for 2020 shows the median sale price rising to over $340,000.
While our local housing market shows no sign of softening, the reality here and elsewhere could be changing soon with moratoriums on evictions about to end.
At Mintpress, Raul Diego has a concerning article, titled Tech Giants Eye Lucrative Rent Market as End to Eviction Moratorium Could Leave Millions Homeless. From the link:
Just as news of a mysterious virus was breaking late last year, Facebook invested $1 billion for the construction of 20,000 new affordable housing units in California, following Google’s lead which had made the exact same commitment a few months earlier. Apple more than doubled Google’s and Facebook’s investment, combined, when it put down $2.5 billion for the same cause.
On the occasion of Facebook’s investment, California governor Gavin Newsom declared that the “State government cannot solve housing affordability alone” and praised the public-private partnership for advancing the fight against “economic inequality and restoring social mobility.”
It is of course utter crap that Big Tech is investing in affordable housing to fight against economic inequality. If you can handle the investor-speak, this February article from Globe St. will help you understand why Big Tech is investing in affordable housing. From the link:
Investors may be overlooking the profitability of the affordable housing segment of multifamily assets. Affordable housing has recently become a popular investment class, but there is still a misunderstanding about the stability of the sector. Affordable housing has an attractive risk-return profile and is better positioned to perform through a recession than class-A apartments.
My translation: hey investor class, with all that interest-free stock-crack sloshing around in your portfolio, you should consider taking a bullish slumlord position, since our latest transfer of wealth is hollowing out those middle class pretenders.
Here’s more:
First, there is typically strong demand for affordable housing, but new apartment development this cycle and low wage growth has driven affordable housing demand up. “It is a paradox,” says Needell. “The cost of new construction goes up, so the more that you build new, the less affordable housing is available because you have either torn down or gentrified affordable units. On top of that, millennials, which is a great demand set, have an inability to pay for the highest quality apartments, and when you combine that with demographic demand, you end up with a need for affordable housing greater than it has been in the past.”
My translation: by destroying existing affordable housing to build new apartment housing, and by destroying the upward mobility of an entire generation, we have engineered a demand you can now make good money exploiting.
The Big Tech making moves into Missoula is Cognizant, so I poked around their website and, oh boy, is it creepy. They are already anticipating the future of work with something called “Remotopia”. I didn’t watch their video because their description was all I needed to get that queasy feeling:
If there ever was a societal wake-up call, COVID-19 was it. The pandemic forced us to rewire work, correct hygienic sins, and double-down on our understanding of the cause and spread of infectious disease—simultaneously.
Months later, many questions abound: Will all who can work remotely do so for the near and long term? Will we be able to ever travel safely again? What environmental changes are needed to guarantee the safety of our physical workplaces and preserve the sanctity of our food supply? Can AI help identify, prevent, treat and cure infectious disease before it undermines us? What have we learned to sustain our way of life as we know it?
The Cognizant Center for the Future of Work, along with Cognizant healthcare and life sciences subject matter experts, have charted a path forward. Journey with us to see what is to come.
The Big Takeaway I’m getting from this cursory look at Big Tech’s near-term plans is this: they are very busy shaping what the future is going to look like, even housing…so what are we going to do about it?
JC
I find two disconnects about housing locally. 1) The term “affordable (or affordability) keeps being used. Yet it does not ever mean what is said. A $300k house may be more “affordable” than a 400k house but it does not pencil for a 50k/yr household. By constantly chasing tourists, out of staters and gentrification that gap will expand.
2) When speaking of affordability a high density apartment complex seems to be the model. For most of the people I know that grew up in MT (like myself) a home is considered to be a single family residence with a yard, garage, etc. You know a place to raise kids, have a pet, a cook-out, a garden, etc. Perhaps relocated City dwellers are happy w/Soviet bloc style housing but most Montanans seem not. When looking at single family house prices the median is much greater than the $340k listed. There is no affordable housing (of the MT tradition style) left for Montanans.
I wish our City/County/State leaders would be honest and say “nothing is quite affordable – the best you can hope for is a 2 bedroom apartment stuck in a 200 complex.”
Yeah we know its near the dump but we gave it a classy name like Vellagio! Welcome to the new normal Americam Dream!!!
since single family zoning has been declared racist, then your quaint aspiration to have something like “a yard” must be equally racist. one of the amenities at your new Vellagio studio apartment (which you will be inhabiting shortly for expressing wrongthink) is the small-group realignment sessions that will identify the implicit bias that has conditioned you to aspire to the racism of single family homes with yards /snark.
for a less snarky thought experiment (inspired by my friend’s idea), what if our state leadership was Montana nativists/protectionists? to exemplify what I’m talking about, I suggested this in Twitter earlier:
I think it’s safe to say we no longer need to incentivize people relocating to Big Sky Country because we suddenly have lots of what other people want.
I’m sure out of staters are just itching to pull the trigger on public housing backing up to an interstate.
no, they probably wouldn’t want to live in that affordable housing sacrifice zone, but if they have enough money maybe they’d be interested in buying an investment property (in addition to their new home up the Rattlesnake) so they have some additional passive income to live on. that would of course deprive someone from a stater home that they could build equity in, but that’s my point in suggesting they should be heavily taxed at the onset of their relocation to Missoula.
I understand the desire, but taxing property differently based on the residency of its owners violates the Privileges and Immunities clause of the US Constitution.
oh, that pesky historical document? like TC said, it’s obviously never going to happen, just more of a thought experiment.
I agree. I would like to see an increased property type tax that was applied to out of state purchasers. I would especially like this high tax applied to trophy homes, 2nd homes, airbnbs, investments. It would nice if this tax was then used to reduce taxes on seniors, single parents, low income types
Since we know that would never happen I would settle for no more of my tax dollars going to out of state Ad companies used to entice people to the Big Sky
Maybe we should consider the idea that this nation has enough people in it. Maybe we don’t need anymore…in spite of what Wall Streets media mouthpieces tell us. Maybe doubling* our population from 1950 to now was/is a bad idea?
Because of an ever increasing population/demand my first home purchase had to wait until I was 41 years old, it was a tear-down [all-other-bids] that I, working week-ends, gutted and rebuilt. Maybe I did too good of a job because some real estate agents saw my work and decided the “neighborhood was hot” and the gentrification happened, in less than two years my neighborhood became unlivable. With less people/demand home values will drop.
I have a friend who has visited Japan once a year for decades. You know how the media tells you things there are grim because of a declining population? My friend says bullshit, except in the most desirable areas, rents have stabilized or declined, young people have options now…better housing at a lower % of their income, people are happier. Maybe stock prices aren’t the only measure of success and happiness…is that even possible?
https://assets.weforum.org/editor/large_JoEX8kIRP4RS9gCEwC4VQYOO0z3so4qynxbLxLVguWw.png
* aproximately