Why Affordable Housing Is Unaffordable
23rd September 2025
Andrew Thomas, an assistant professor at Helena’s Carroll College, asked the Montana Department of Commerce, which distributes affordable housing credits and grants to developers, for all of the successful applications for low-income housing tax credits since 2000. The department graciously responded by providing information about nearly 190 housing projects.
Thomas had some of his students transcribe the data from the applications into a spreadsheet that he gave me to analyze. The applications tell how many units and how many livable square feet would be built in each project and break down costs into such categories as property acquisition, construction, professional fees, developer fees, and project reserves. The applications don’t say how tall each project would be but Thomas also asked his student to look up each project on Google street view to determine how many stories tall they were.
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Comparing costs from projects built in 2000 through 2004 with those of projects built in 2019 through 2023 revealed that the cost per square foot had risen by 83 percent or $154 (in 2023 dollars) per square foot. The costs of just “construction” (including such things as relocation expenses, contractor overhead and profits, and permits as well as construction itself) grew by 44 percent or $49 per square foot, so other costs were responsible for most of the $154 increase.