Affordable Housing in Bozeman: Let’s do the Math

Does anyone remember the housing collapse in 2008? It seems that we are off and running again on housing in the Gallatin Valley, treating 2008 as a bad dream that never happened.

At least, the new home buyers are treating it that way, which has sparked a steady rise in housing costs once again.

According to City-Data.com, the median household income (or AMI) for Bozeman is almost $50,000, but the median housing cost (including condos) is just over $250,000. This information is an approximation from 2013.

To put things in perspective, we need to do a little math. The average household income is about $4,000 a month. Typically, a lender will allow 28% debt-to-income ratio, which places the average mortgage loan at $1,000 a month. This equates to $150,000 on a 15 year fixed mortgage at 3%.

Let's compare those numbers. The average median household income is $100,000 off on a loan to buy an average house in Bozeman. So what can you get?

According to Realtor.com, the cheapest dwelling (excluding mobile homes) was 900 sq ft two-bedroom condos at $140,000. The first house to appear on the list was $200,000 for the same bedrooms and square footage. For a family however, these are not a viable option.

Recently, Bozeman commissioned a Neighborhood Conservation Overlay District (NCOD) report, which surveyed the affordable housing in Bozeman among  other things. The results are jaw-dropping.

According to the NCOD report, "3- and 4-person households at 80% AMI can afford zero single household homes in the NCOD." Keeping that in mind, "3-person household at 100% of AMI can afford 15% of single-household homes," and "4-person households... can afford 45% of single-household homes."

That means the best average still can't afford over half of the single-household homes available, and the rental options are nearly as detrimental to families.

According to Rentrange.com, the average 2-bedroom housing is $1,000, but the average 3-bedroom is closer to $1,500. If the median household income can barely support a $1,000 mortgage, how are Bozeman families expected to thrive when they can't even survive?

We talk about sustainability on a number of issues in Bozeman, yet we are failing at the most basic need, shelter. Affordable housing is a serious issue in our community. These are not just numbers. These are Bozeman's struggling families.