Montana's Impossible Housing Situation

[Ben Lamb]

This is true.

@Ben Lamb what do you make of restrictions on airbnb/vrbo and other non occupied homes? Seems like there's push for it in places in CO

It's needed. It's an issue in a lot of communities that are desitnations. Tons of formerly affordable homes that are being purchased exclusively for this type of effort. They got snapped up quickly using when rates & prices were low & the VRBO market was still expanding (I think it's ripe for a contraction, personally - there's a declining ROI for the renter on many of these properties as maintence, etc wears thin from owners & managers - long term hospitality is not something you can just make up on the fly).

I really like owner-occupied vacation rentals - a neighbor has one that's essentially a bedroom, lounge and bathroom attached to her pole barn. She's booked most of the time. Renters still have tons of privacy, and the income is helpful for our neighbor and it hasn't taken housing away from folks who need it. I'm also a proponent of either no ownership by foriegn entities or very limited and highly regulated. It's pretty much standard operating procedure in many destination nations.

 

[peterk1234]

As far as housing prices go, MT is at the top of the pile for lack of affordability, but the frenzy of purchasing was driven by low interest rates and a lot more freedom of movement relative to remote work becoming a big part of the matrix now.

That means there's a pile of commercial real estate that's going to be heading towards bankruptcy at some point. Those can be turned into multi-family housing, etc. Rural MT - take Harlowtown for example - has a ton of empty space downtown. Lewistown is filling up, GFunk is too. But there's a ton of existing infrastructure around that can be repurposed. Office space above retail in downtowns, empty storefronts & buildings in small towns, etc. It's a mistake to think that the housing market is so enamored with single family homes on .25 acres or 5 acre horse ghettos. Provide well built, affordable housing utilizing existing infra and you cut your costs way down w/no need to expanded sewer, water, electrical, etc.

Then you get folks like this: https://montanafreepress.org/2023/1...llenge-against-pro-construction-housing-laws/

They want to stop progress on dealing with the issue because their neighborhoods wouldn't be as gentrified. They'd have people moving in, changing their bucolic little neighborhoods. Another example of NIMBY. I mean I get it, but the neighborhood we lived in in Helena was mixed single family and multi-family and it was lovely. It's how we used to do things before we got addicted to the ticky-tacky houses and "quaint" old houses in neighborhoods established 100 years ago.

This right here. Very well stated. My career was commercial banking and commercial real estate. There is a reckoning coming in the office sector nationwide. Will it impact Montana? Probably to the extent that residential use will be more valuable than office given the current housing demand.

Full disclosure, I'm a transplant. Bought here in 2020 after living a lifetime in the northeast. I had visions of acreage and remote living. We purchased temporary shelter so we could figure out what and where it would happen.

After a few months of living here, I started to understand what makes this place so special. Culture and vast open acreage. Not many places in this country have culture. This is one of the last few places, and it's truly special. Open land, public and private need to be preserved.

Today, I fully embrace dense living. A small sacrifice not to lose what we have. It disgusts me to see what is happening in places like Paradise Valley. I get it, property owners should have every right to sell land and make money. I understand it better than most because of my professiibal life. But we should be working to make it easier for them to not have to sell.

We never moved. I have a 7,000 sq ft lot. It's a duplex. Family lives next door. I have subsidized housing across the street. A trailer park is a block away. And I love it. The people here are great. What you see is what you get. Friendly. Happy to help each other. Way better than the stuck up a$$holes that I used to live near that get passed at everything.


Oh... and no, you are not building a house for $200k.

 

[Flatbrimmer]

Just some questions around quality of build. Sorry if that triggered you. No offence meant.

None taken.

 

[Ben Lamb]

None taken.

Excellent.

 

[Straight Arrow]

No offence

No ... the cost of fence was not included in the $200k.

 

[Flatbrimmer]

Excellent.

View attachment 340964

Homie don’t know the wrist technique…

Bout to get spanked at arm wrastling…

 

[Ben Lamb]

Homie don’t know the wrist technique…

Bout to get spanked at arm wrastling…

Bruh - it's Arnie & Carl Weathers being bruhs.

Come on, king!

(Whispers - that's you and me bromigo).

 

[Flatbrimmer]

So I get what you’re saying, seriously. I’m talking about building a house, just the house, for 200k, not including most labor costs because I would be doing the labor if I was building MYSELF a home, and then talking about selling said home, Land and all- for 1m. The cost of the land must be factored in if the land is selling with the house lol.

So I get it. I do. Call me an idiot. Sometimes I am.

But again I say, when we started those houses those lots were CHEAP. Like 10 grand cheap. Now they’re like 200k just for the lot, if they aren’t already accounted for….
When some New Yorker can move into a house I slapped up in a 5 days and is move-in ready in like 6-8 weeks from breaking ground- SIGHT UNSEEN- for 800k and call it a “good deal” it makes the value of these homes rise so much more significantly than the COST to build it. There was a time that a 3/4” sheet of underlay was like $70 a sheet and the cost did start reflecting a little more but wages did not. The people that grew up here making this community so “desirable” are not gonna be able to stick around much longer.

I liked the thread about “how many of you are millionaires” because I feel that helped us peasants to understand the headspace of a great number of you guys too….

 

[Ben Lamb]

So I get what you’re saying, seriously. I’m talking about building a house, just the house, for 200k, not including most labor costs because I would be doing the labor if I was building MYSELF a home, and then talking about selling said home, Land and all- for 1m. The cost of the land must be factored in if the land is selling with the house lol.

So I get it. I do. Call me an idiot. Sometimes I am.

But again I say, when we started those houses those lots were CHEAP. Like 10 grand cheap. Now they’re like 200k just for the lot, if they aren’t already accounted for….
When some New Yorker can move into a house I slapped up in a 5 days and is move-in ready in like 6-8 weeks from breaking ground- SIGHT UNSEEN- for 800k and call it a “good deal” it makes the value of these homes rise so much more significantly than the COST to build it. There was a time that a 3/4” sheet of underlay was like $70 a sheet and the cost did start reflecting a little more but wages did not. The people that grew up here making this community so “desirable” are not gonna be able to stick around much longer.

I liked the thread about “how many of you are millionaires” because I feel that helped us peasants to understand the headspace of a great number of you guys too….

That makes a lot more sense if you're just counting materials, etc. I certainly do no think you are an idiot. Just couldn't understand your position. I appreciate taking the time to educate me on it!

The bolded part is on the freaking money.

 

[hank4elk]

Boomer. Builder most of my life before I went into Parks.
I remember when CA was great outside of LA & the City. Everyone worked and had a decent living. The best hunting & fishing.
1970's MT was much the same with no real big cities and not so good livings. OK fishing & hunting.

Just discussing the cost of materials with the guy helping build a covered porch on a barn. NM.
Scuttlebutt has average price to build in NM @ $300++sq. ft.
The porches will cost more than what I built a double garage for 20 years ago.

Retired in NM.

 

[Forkyfinder]

It's needed. It's an issue in a lot of communities that are desitnations. Tons of formerly affordable homes that are being purchased exclusively for this type of effort. They got snapped up quickly using when rates & prices were low & the VRBO market was still expanding (I think it's ripe for a contraction, personally - there's a declining ROI for the renter on many of these properties as maintence, etc wears thin from owners & managers - long term hospitality is not something you can just make up on the fly).

I really like owner-occupied vacation rentals - a neighbor has one that's essentially a bedroom, lounge and bathroom attached to her pole barn. She's booked most of the time. Renters still have tons of privacy, and the income is helpful for our neighbor and it hasn't taken housing away from folks who need it. I'm also a proponent of either no ownership by foriegn entities or very limited and highly regulated. It's pretty much standard operating procedure in many destination nations.

Agree in principle. I just fear those regulations will hamper future investment in property.

One thing thats true - rising prices and/or devaluation of the dollar hurts those without assets the most. I hope that inflation is indeed slowed but im plenty skeptical.

 

[Ben Lamb]

Agree in principle. I just fear those regulations will hamper future investment in property.

One thing thats true - rising prices and/or devaluation of the dollar hurts those without assets the most. I hope that inflation is indeed slowed but im plenty skeptical.

Housing as an investment for individuals/families is much different than what's happening in the short term market. That's large companies purchasing above and beyond appraised and driving values up based on the projected revenue of a percentage of occupation.

If you want to reduce the competition, remove the entities that have an outsized advantage from the pool. Eliminating VRBO's in neighborhoods would do that. Owner occupied VRBO's still allow for it to happen, and increase the worth of your investment but you're going to have to protect the non-corporate side first and foremost.

 

[Treeshark]

It seems to me that remote working is starting to experience some fairly strong headwinds, and I would not be surprised to see it greatly cut back the next time we experience a downturn.

I think the VRBO-type rental market is going to get smashed if and when that happens, similar to what happened in places like Destin FL in/around 2008. Massive condo complexes just sat unfinished for years, it would not surprise me to see a repeat when things cool off.

*I do not foresee the residential market to reverse in places like Bozeman, but reversal of a lot of remote working arrangements would certainly apply some downward pressure.

 

[Ben Lamb]

I don't know. The balance of power is still on the side of trained labor over management. With Boomers retiring and GenX moving up the ladder, the creation of opportunities for millennials and gen z gets tied into quality of life far more than previous generations. Certain exceptions apply, obviously but labor's bargaining power has grown pretty strong since the pandemic. It's a convergence of trained staff leaving, and the next generation not being willing to accept sub-standard conditions, and spending 3 hours a day in traffic is a big boil on quality of life's rear end. Blended remote-in house, I see that being a more reasonable option in order to keep good staff.

Commercial real estate has a lot of bad debt as well. Munger was warning about this before he passed. Part of the reason employers want the office situation I'm sure. But the market has a say and if people won't take a job because of the in-office demand then companies live and die by the quality of staff they can attract and keep.

As for Bozeman - There's been a correction once. It could easily happen again. But it's not just Bozeman. It's the whole state and that will have to reckon with this and given the age demographics, fairly soon.

 

[Treeshark]

With Boomers retiring and GenX moving up the ladder, the creation of opportunities for millennials and gen z gets tied into quality of life far more than previous generations.

I get your point and agree in part. However, a lot of the really big tech firms fell into an arms race to hire and it was largely been driven by corporate ego. Those chickens are beginning to come home to roost (large layoffs in tech starting to become fairly regular), and AI could take a bite out of as well. Not to mention the stigma that is beginning to become attached to remote workers. I see tough sledding ahead and a reset towards a more traditional workforce.

The pendulum is still on the labor side, I do agree, but it is starting to swing back. That momentum in a mofo- I think it is going to have an oversized impact on destination towns for the remote-work and VRBo crowd, like Bozeman.