Here’s a word problem that might have come straight out of a fifth grade arithmetic book circa 1965: If the average Bitterroot Valley wage earner makes $16,584 a year and the median price of a home in the Bitterroot is $122,900, how can the wage earner afford to buy his own home?
Answer: He can’t.
No matter how you do the math, the fact remains that in a county that has seen the price of housing soar to eye-popping levels, and where a century-old stock farm has been transformed into a top-end luxury development for the mega-wealthy, housing itself has almost become a luxury.
But that will change, to a modest degree, thanks to the far-sightedness of the Hamilton, Darby and Stevensville town councils.
Last week, the three town councils got the good word that their joint $2.4 million homebuyers assistance grant application submitted to various government agencies was successful. In fact, it scored first in the state against other homebuyer grant applications, according to Hamilton special projects and finance officer Dale Huhtanen, one of the main architects of the grant.
What the grant money does is bridge the affordability gap in Ravalli County, where working-class people have been virtually eliminated from the housing market due to a devastating combination of low wages and high real estate prices. Huhtanen estimates that the grant will help between 20 and 25 first-time homebuyers purchase their own homes.
Technically, the program works by providing financial assistance to qualified buyers in the form of no-interest, deferred-payment mortgage loans for the difference between the home’s purchase price and the loan amount for which the buyer qualifies. The program is tailored to the needs of the individual homebuyer and may include the cost of repairs, down payment and closing costs.
Evey Hendrickson, a hairdresser who bought a home in Hamilton earlier this year with financial assistance from a similar government program, says she was turned down repeatedly by traditional banks and mortgage lenders. “I was told no right up until I met Debbie [Svendson],” she says. Svendson, a loan officer with Heritage Bank Loan Center in Hamilton, knew the ins and outs of government lending well enough to say “yes” to Hendrickson when she came calling. “I went through other Realtors and banks and they all just laughed and said, ‘How can you afford it?’”
Last year, when the town of Hamilton obtained a similar grant, nine first-time homebuyers qualified, enough to inspire Hamilton city officials to request another grant.
But a few questions emerge. Why are these small town councils, overburdened as they are with the minutiae of running growing but underfunded towns doing this for their constituents? Isn’t it enough to just keep the streets in good condition and sewer lines maintained? And doesn’t applying for government housing grants run counter to Ravalli County’s rock-solid Republicanism that places so much value on small government and less taxation?
Hamilton Mayor Laurel Frankenfield, an enthusiastic booster of all things Hamilton, says the council had no choice but to approve the grant request. “It’s because nobody can afford it,” she says of housing in the Hamilton area. “Those people could just never come up with that amount for the down payment. People move [out of the Bitterroot Valley] because they can’t afford to live here, or can’t afford to buy a house here.”
When asked whether government subsidies to first-time homebuyers reflects more a liberal than conservative viewpoint, Frankenfield laughs, a little nervously. “We don’t even talk about politics,” she says, pointing to the fact that Hamilton’s elected positions are non-partisan. “It maybe is just something unique here. Prices go sky-high and that’s what it’s all about.”
Hamilton councilmember Carol Schwan is a bit more forthright. The council supported the grant application for the simple reason that incomes are low in the Bitterroot Valley and that government, in the form of a town council and state and federal agencies, can help those people buy homes. And home ownership, says Huhtanen, promotes family and community stability.
“I think it’s because this community does have a low-income base and we wanted to do something to ease that burden,” Schwan says. “When we do community surveys one of the biggest things is people want affordable housing.”
Overlooking the town of Hamilton, but not visible from the valley floor, is the exclusive Stock Farm residential development, the pet project of investment mogul Charles Schwab, who lives part-time in the Bitterroot. The vast property, once grazed by Marcus Daly’s cattle, now boasts quarter- and half-million dollar homes on lots reputed to run in the same price range. At its western boundary is a 22,000-square-foot home, undoubtedly the largest in this neck of the woods.
“It’s just an incredible contradiction,” Schwan says. “Here you have 78 percent of the kids on free lunches in the county, and here you’ve got this development overlooking the whole situation.” The “situation”—$16,000-a-year workers needing government help to purchase modest homes in the $122,000 price range—is “ridiculous isn’t it?” Schwan says. “It just floors me.”
Though Frankenfield shies away from any talk about whether a liberal government program is being promulgated in conservative Ravalli County, her counterpart in Stevensville doesn’t.
Stevi Mayor Bill Meisner, who supports the program, agrees that there is a liberal element to it. “It’s a liberalistic program,” Meisner says. “But whether you’re liberal or conservative everyone needs a hand once in a while.”