Aspen Meadows

The restrictions that keep Aspen Meadows as affordable housing are set to expire in July 2021, further reducing the limited number of affordable homes in Bozeman.

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Bozeman’s stock of affordable homes will get smaller next summer as demand for low and moderately priced housing continues to grow.

Restrictions that keep rent below market rates at Aspen Meadows will expire in July 2021, according to a notice sent to tenants. The complex made up of 44 townhouse-style apartments is off Oak Street near 7th Avenue. It’s been part of the federal Low-Income Housing Tax Credits program since 1998.

The owner of Aspen Meadows, Alden Torch Financial in Denver, did not respond to a request for comment.

Property owners who receive low-income tax credits can meet affordability requirements three different ways. All three mandate that a percentage of units are occupied by tenants who make less than the median income in the area.

Owners are also required to set rents that do not exceed 30% of either 50 or 60% of median income in the area, depending upon the share of tax credit units on the property.

There are 15 properties in Bozeman that receive low-income tax credits, according to the Montana Board of Housing.

The terms that keep housing affordable through the program expire after 15 years. According to the U.S. Department of Housing and Urban Development, property owners have three options after expiration: continue to offer affordable housing without a subsidy or restricted rents, find a new subsidy to offer affordable housing or rent units at market price.

A three-year phase out is required, so current tenants have one more year until restrictions are lifted and rent is raised. Rent is already set at market rate for new tenants.

As Bozeman grows and real estate prices continue to shoot up, demand for more affordable housing does, too.

A Bozeman housing needs assessment from February 2019 found that an estimated 5,405 to 6,340 new homes are needed by 2025 to keep up with Bozeman’s population size and workforce. About 60% of those homes need to be priced below market value to meet need.

Rentals that are priced below market rate are $1,000 per month or less, according to the report.

Bozeman city officials have made increasing the number of affordable units in Bozeman a top priority. They endorsed a plan last year with 19 strategies to work toward the goal.

According to a July update from city staff, the city’s affordable housing ordinance has produced 18 affordable homes in two years. Over the last year, seven people received down payment assistance, developers of affordable homes have been reimbursed $39,362 for their work, 413 people attended homebuyer education and 283 people received pre-purchase counseling and screenings.

Tanya Andreasen, affordable housing manager for the city, told commissioners that the city is looking for new ways to leverage the federal low-income tax credit program. She said a report on that front will be ready in October.

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Shaylee Ragar can be reached at sragar@dailychronicle.com or at 582-2607.

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