Affordable housing bill on 2025 legislative agenda

BUFFALO — The lack of affordable housing in the state is so harmful to residents and municipal tax bases that it “is a matter of state policy and state concern,” according to a draft bill headed for the 2025 legislative session.

That is how the Joint Corporations, Elections and Political Subdivisions Interim Committee justified adding affordable housing to the list of urban renewal projects eligible for tax increment financing in a bill it forwarded for introduction.

The expansion of the definition of urban renewal projects could allow municipalities and developers, with municipal approval, to use TIF – a public financing method that uses future property tax revenue to fund community improvement projects – to fund improvements specifically for and related to affordable housing developments.

The challenge for the program’s use in Buffalo is that the city would have to declare an area “blighted” in order for the developer to secure TIF, and there are none currently declared in Buffalo, city building inspector Terry Asay said. While the city could elect to change that, that could be a hard sell, affordable housing advocate Jerry Spiering said.

“It’s just a really hard concept to think about going to residents of Buffalo and saying we’re going to consider something blighted,” he said.

Spiering is a part of the Johnson County Community Foundation, which was created to assist and encourage housing development in the community, although it serves a broader community-focused mission.

Spiering said the city of Buffalo could declare some areas as blighted, and that could be something that the foundation advocates for. In Laramie, for example, the city declared everything within city limits as blighted. Spiering said, however, that the foundation isn’t ready to advocate for something like that.

“It’s a tool, and I don’t think our group is well enough informed, entrenched enough in the community to pursue that in the near future,” he said.

Buffalo Mayor Shane Schrader said that while he is open to classifying some areas as blighted, he said he doesn’t feel comfortable advocating for it without more research.

“Oftentimes, things can look good but have unexpected outcomes,” he said.

The city is currently looking for a full-time city planner, and Schrader said that using tax increment financing could be one of the things the city tasks its planner to look into. If the city successfully requests areas be eligible for TIF, private developers could use TIF funds for infrastructure projects including water, sewer and roads for affordable housing developments. Developers would need to bring their project ideas to the city council for approval.

The bill defines affordable housing as housing (and utilities) that costs less than 30% of the resident’s gross income. Spiering said the issue with that definition is that it doesn’t target income ranges with the highest need for housing.

Locally, Spiering said the housing needs are greatest for the so-called missing middle. The missing middle housing is for people who don’t qualify for affordable housing programs because they earn too much, but earn too little to afford housing in their area.

In Johnson County, that income range includes some police officers, educators and healthcare workers.

Spiering said that’s where the foundation is focusing, and that group earns around 60% to 120% of the area median income. (That’s between $57,240 and $114,480 for a family of four in Johnson County, according to the 2023 data from the U.S. Department of Housing and Urban Development.)

While the TIF bill passed the committee by an 11-3 vote, it still needs to pass the full legislature.

Spiering said it may also be some time if and when TIF can be used in Buffalo. The foundation has been focusing on becoming informed and seeing what ways they can advocate for more housing in the community. For example, the foundation has met with Habitat for Humanity of the Eastern Bighorns, based in Sheridan, which has officially applied to expand into Johnson County.

Spiering said housing is “staggeringly difficult” to afford for many people in Johnson County, yet many residents are opposed to affordable housing projects.

“You think it’s a common need that people recognize, but they don’t,” he said. Spiering said that city leaders should also be more encouraging of development.

Schrader said the city could do more to encourage developers, like lowering sewer and water tap fees or simplifying the permitting process. Ordinance changes that make development easier may be the best option, he said, because as the city’s costs have also gone up, waiving or lowering fees may not be feasible.

Spiering said that it is appropriate for government agencies to become involved because private industry has not and may never address the lack of affordable housing in communities.

The housing market is in a difficult place right now with how volatile the economy has been over the last several years, Schrader said. The cost of land in the area has also made developing less profitable.

“How do you build attainable housing when the land costs more than the house you’re building on it?” he said.

Right now, there is one developer looking to build a single-family housing development in Buffalo, and another that has applied for federal tax credits to build an affordable housing apartment complex, according to Asay.

If that project moves forward, renters would pay based on their income, and renters must be within 30% to 60% of the AMI to qualify. That developer, Housing Solutions – based in Missoula, Montana – will not know if it received the tax credits until January, 2026.

This story was published on November 21, 2024.