Adam Rice, a junior at Montana State University, is currently living in a tent in a generous friend’s backyard. After moving out of his previous apartment two months ago, he has been looking for an apartment or house to rent in Bozeman, but has yet to find one. Due to a confluence of increased student enrollment, and a city-wide shortage of affordable housing, Rice is one of many students struggling to find satisfactory off-campus housing this fall.
A city-wide shortage
Bozeman has been experiencing a scarcity of affordable housing for the past two decades. According to the 2011 census and surveys of the housing market in Bozeman, current vacancy rates hover around 2 percent, much lower than a healthy 5 percent rate, and nearly half of Bozeman renters are paying more than 30 percent of their income on housing. Anything over 30 percent is classified by the city government as unaffordable.
[pullquote align=”right”]“Demand is pretty high, people are looking earlier. They know it’s a tight market”[/pullquote] “Demand is pretty high, people are looking earlier. They know it’s a tight market” explained Kevin O’Brien of Peak Property Management. “We had a kid come in, before he’d even seen the place, before we’d even listed it. He’d heard through word of mouth that someone was terminating their lease, and wanted to apply.” O’Brien noted that vacancy rates in recent years have been exceptional. “From 2008 to 2010, we have had 50-60 [properties] available. This year we had seven.”
According to Rice, “There’s a lot of new listings every day. With the sheer volume of people looking, I’ve only heard back from two people.” he said, “[The rental market] is the worst I’ve seen since I’ve lived here.”
Affordability is also an issue for Rice. “People have ridiculous prices”, he said, if it’s not near campus, I’m not paying more than like $425 per month. [pullquote align=”right”]If it’s not near campus, I’m not paying more than like $425 per month.[/pullquote] I’m a non-traditional student, no loans, no parents. It’s just hard,” he said. Most rentals he has looked at cost nearly half his monthly income from his part-time retail job, far above the 30 percent standard for affordability.
“A sample survey of low and moderately-priced apartment properties in January 2011 indicated that average rent for a two-bedroom apartment in Bozeman is currently $738 — considerably higher than the affordable price point of $600,” stated the Affordable Housing Needs Assessment and Strategy, completed in 2012.
“Lack of housing affordability in Bozeman is primarily a function of housing development costs, housing supply and demand, the incomes of residents and financing costs,” according the Affordable Housing Needs Assessment.
The City of Bozeman was aware of, and began addressing, housing concerns in the early 2000s. A 2003 housing study led to the implementation of Bozeman’s Workforce Housing Ordinance (WFH) in 2007, an ordinance to encourage construction of new affordable housing. Unfortunately, the global recession of 2009 reduced home construction to half of its earlier booming rates, and WFH was suspended without success.
The Affordable Housing Needs Assessment and Strategy, states that, “No affordable, subsidized rental housing has been built in Bozeman since 2005,” despite a 35.52 percent increase in population since 2000 and high local unemployment and underemployment rates due to the recession economy.
The housing market has begun to recover as the recession lifted, but the rental market has yet to feel the effects. Home sales are increasing from their recession lows, but O’Brien explained that many of the houses being sold were rental properties, exacerbating the rental drought.
The Bozeman City commission reconsidered the reinstatement of the Workforce Housing Ordinance in early June of this year, but recommended the suspension continue until September, 2015, citing insufficient improvement in existing home sales.
The Toll on MSU students
According to a city housing assessment Student households have…a tendency to place an upward pressure on rent and price levels when overall demand is strong. [pullquote align=”right”]“Student households have…a tendency to place an upward pressure on rent and price levels when overall demand is strong. [/pullquote]Indeed, the presence of a large student population in Bozeman is an important factor in the scarcity of affordable rental housing.” Since that assessment was written in 2003, the student population has only increased, amplifying pre-existing housing issues.
MSU has experienced an 18 percent increase in enrollment between 2010 and 2013, and growth is expected to continue according to goals stated in MSU’s 2012 Strategic Plan. Last year, the university faced dramatic on-campus housing shortages.
According to Matt Crosby of MSU Residence Life, “Most of those issues have been resolved, but we are very full, and we did open with students in temporary housing. We are feeling the affect [of the housing shortage].” Although on-campus housing managed to accommodate the increase, the growing student population is flooding the Bozeman rental market.
The student population in Bozeman plays a large role in the rental housing market. As of 2000, families comprised only 46 percent of Bozeman households, considerably lower than the state average. Student age residents made up 33.5 percent of the Bozeman population, and grew at a faster rate than in the rest of Montana. These trends are “clearly related to the presence of students attending Montana State University.” according to the 2003 housing assessment.
For companies like Peak Property Management, this is good news. “ MSU is a popular school,” said O’brien, “Get out your checkbook, now’s the time to buy investment properties. We have more applications than properties, so we’re always looking [for properties].”
However, students are struggling. “There’s the sense that there are not a whole lot of options”, said Crosby, speaking about advisors’ experiences with students. Roughly a third of all “Housing Wanted” listings on Craigslist from the past month are from students, and the ads carry an air of anxiety. “Desperate! Need room or MSU temp housing in my future!”, reads an ad from August 22. “COME ON!” and “HOUSING NEEDED!!!!” exclaim others.
Rice has had to lower his standards due to the competition. “I wanted a place with a nice yard, a close bike-ride to campus,” he said, but unable to find something suitable he said he is “opening up a bit.” He feels frustrated. “[Renters] are taking advantage of the student market” he said. He and a fellow student connected online and are now looking for a rental together, hoping to increase their chances of finding housing.
“I don’t know what I’m going to do if I don’t find a place. Live in bars probably” he said, laughing.
MSU offers some resources to students living off-campus. Residence Life offers pamphlets and advisors for students seeking off-campus housing, and Associated Students Legal Services provides legal assistance for student tenants. Additionally, the MSU/Bozeman Good Neighbor Committee, which includes representatives from MSU and ASMSU, the city of Bozeman and property management companies works to encourage healthy and productive relationships between students living off-campus and other Bozeman residents.
However, MSU’s Strategic Plan provides no considerations for off-campus housing needs and the capacity for the city to absorb increased student enrollment, although “[the University is] working with the city commissioner to determine exactly what the impact [of increasing enrollment] on the community will be,” said ASMSU President Lindsay Murdock.
The City of Bozeman Affordable Housing Action Plan: 2012-2016, finalized in May, 2012, outlines strategies to increase access to affordable housing. Plans for the next three years to “increase and preserve the supply of affordable housing” include amending city regulations to encourage construction; easing access to funding for renters, buyers and owners; encouraging repair of aging properties; and continued assessment of affordable housing needs.
Meanwhile, O’Brien recommends house hunters, “Look early and look often. Don’t become desperate.”
Rice echoes this sentiment. “You want your home to be a place that feels good. Compromising on housing just isn’t worth it.”