Missoula saw a record 1,338 new home building permits in 2021 | Local News

There’s a residential building boom in Missoula as the city races to make up for a huge housing shortage that has driven prices up in recent years.

The city’s Office of Community Planning, Development and Innovation authorized 1,338 new housing units in 2021, a 140% increase from 2020.

The total market value of all this residential construction is $196.6 million. To put that number into perspective, the total value of all construction in Missoula, including commercial construction, was $243 million in 2020.

“We are delighted with what we are seeing,” said Eran Pehan, the office manager. “It’s an incredible increase and we think it’s going to make a huge difference in the community.”

This is by far the highest number of housing units allowed in a single year for at least a decade. The last two years with the most new construction, 2016 and 2017, never saw more than 800 homes licensed.

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Another 1,219 dwellings are expected to be created through the subdivision and annexation activities that took place in 2021, which created new lots.

“Each lot (created by planning) represents a future home or apartment building to be licensed and built over the next few years,” Pehan said. “These figures only represent the development of houses for projects requiring a land use review. They do not account for infill development or building homes on lots throughout the city that are already appropriately zoned or subdivided. In that sense, these numbers represent only a fraction of the total development pipeline.

This explosion of development is a sea change for the community.

A city report showed that only 1,636 homes were built between the start of 2018 and the end of 2020 in the Missoula area.

This relatively slow pace of new residential construction, combined with an increase in demand due to the pandemic and other factors, has led to record house prices. The median sale price of all homes sold in the Missoula urban area in January 2022 was $485,000, an 82% increase from January 2018.

Karen Hughes, deputy director of the county’s Department of Community and Planning, told county commissioners earlier this year that there was a shortage of listings available for low- and moderate-income people. Missoula simply hasn’t built enough housing to keep up with the number of people who have lived here for many years now.

“We’re about 2,400 units undersupplied,” Hughes explained earlier this year.

The building permit boom in 2021 will actually take some time to materialize because once a permit is issued, it takes time for builders to prepare and complete a project.

Of the new homes permitted in 2020, a total of 1,064 were apartments in multi-unit complexes.

The $42 million Villagio Apartments, a 200-unit affordable housing project being built on the North Side, accounted for 200 of those permits, as the city counts each home being built as an authorized new home. Similarly, the $54 million, 202-unit Trinity Apartments, an affordable housing complex being built partly in Missoula’s Westside neighborhood and partly on Mullan Road, accounted for 202 of those permits.

Pehan reorganized his office in November 2020 in the face of overwhelming development.

“We had a development capacity plan and additional staff, which is the fastest way to get permits and the fastest way to build new houses,” Pehan said. “We added several planners to our team and also developed a new prioritization policy to get building permits issued for shovel-ready projects on a priority basis.”

Missulians should start getting used to the smell of freshly cut sawdust and the sound of nail guns, especially if it means some kind of relief from soaring prices.

About half of all Missoula County renters now spend more than a third of their income on housing costs, meaning they’re not spending that money on health care, education or local businesses. .

“In 2021, various land use review activities supported a strong pipeline of new homes for years to come,” Pehan said.

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