It's important to understand that the problem of affordability applies mainly to Missoulians of limited means. Housing prices are high in Missoula not because nobody can afford to pay them; if that were the case, with no buyers, housing prices would fall. Prices are as high as they are, rather, because there are lots of people who find them attractive and affordable.
It is the demand for housing from these folks that has driven up house prices and forced families with lower incomes out of the market. So it seems logical: Bring in high paying jobs, raise the incomes of the poorest Missoulians, allow them to enter the market as buyers, and all will be well.
For one thing, it is not at all clear that the city can actually do much to attract high-paying jobs, or any jobs for that matter. Which firms choose to do business in Missoula is largely determined by economic considerations beyond the control of the city, and even if we are successful in luring in firms with good jobs and high pay, there's not much that can prevent the ancillary growth of other jobs, in retail trade for example, that are nowhere near as desirable.
Missoula has experienced a lot of job growth in recent years - some, like that in medical care, quite well paid, and some much less so - and the City Council has had little impact on what that pattern of job growth looked like.
But even supposing that the city could do something to increase the relative number of high paying jobs available, there's no guarantee at all that it will be the poorest Missoulians - those who can't afford a home - who will get those jobs. On the contrary: Most people who are poor are poor because something - lack of education and training, bad health, dysfunctional families, racial and gender discrimination - keeps them from getting good jobs. It's not that the jobs aren't there, it's that the poor face obstacles to occupying them.
But now suppose that even those obstacles could be overcome. The result would be that the demand for housing would rise even more spectacularly than it has in the past decade or so. Housing prices as well would rise even more than they have, and in the end, somebody - maybe a lot of people - would be priced out of the market and the affordability problem would still be with us.
It's pretty straightforward. If 30,000 families want to buy a house and there are only 25,000 houses available, prices are going to rise to the point at which 5,000 families are priced out of the market and find housing unaffordable. Thus the only solution to the affordability problem is to build more houses. Creating new jobs and bringing more people to the city is only going to make matters worse.
It's natural, of course, for City Council candidates to resist this conclusion. “Building more houses” raises the dreaded specter of infill and greater density or, in the alternative, sprawl. But let's not kid ourselves: Homeownership is out of reach for many Missoulians because the growth of population and demand for living places. We might want to limit growth, or try to condition it and limit its effects. But the worst possible thing we can do - if we are seriously concerned about the problem of housing affordability - is to engender even more growth by promoting the creation of “good, high-paying jobs.“
Richard Barrett and Thomas M. Power are professors emeritus in the University of Montana Department of Economics.
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