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A weeklong series from the WGLT newsroom about the housing shortage in McLean County. New stories published daily starting Jan. 27, 2025.

Elected officials have diverse ideas to address the housing shortage

Bloomington City Council members Sheila Montney and Mollie Ward.
Emily Bollinger
/
WGLT file
Bloomington City Council members Sheila Montney and Mollie Ward.

As new proposals to ease the Bloomington-Normal housing crisis move forward this spring and summer, city and town council members will weigh in on what they think. There’s already diversity of thought among council members on the issue.

You’d expect council members to have varying affections for certain policy proposals like incentive packages. And there is.

There’s also as close to unanimity as you’d hope to find about long-term incentives such as loan guarantees or ownership stakes in housing projects in case of default.

"Yeah, I'm not so keen on us being the bank," said Bloomington council member Mollie Ward.

Bloomington council member Sheila Montney agreed, saying the city is not immune to the cost of borrowing.

“When you look at the long tail on financing, you're talking about a lot of money over the lifecycle of a loan at risk to do something like that and tied up in a decision like that,” said Montney. “That's why, 20 years later, we still owe over $20 million on the Coliseum.”

There is, however, diversity of interest in specific segments of housing they’d like to see addressed.

"I think it's overstated to some degree. I believe we certainly have a gap."
Sheila Montney, Bloomington City Council member

Despite the Town of Normal’s identity as a college town and potential fears of student creep into traditionally townie areas, council member Karyn Smith said she wants to hear a discussion of allowing auxiliary housing units.

“For example, in my neighborhood, my house sits on a lot that formerly had the train behind it. It's now got the trail. The lots are very deep and there are other properties similar to mine that border the Constitution Trail, if the town was open to considering it,” said Smith.

Smith said she doesn’t want a bunch of angry citizens at council meetings, so a lot of public discussion is important before moving ahead on that idea.

Smith also wanted to look at struggling or failed hotels to repurpose as supportive or transitional units for the unhoused.

“To provide a single room. It would have a bathroom in each room. It wouldn't be that difficult to have a kitchenette as part of it,” said Smith.

She said she would favor municipal permissions for that and perhaps incentives.

Smith said the town should also be talking about supportive housing for individuals who can function but need help to live independently — people with autism or developmental disabilities. She said that kind of housing looks different for each type of condition or disability.

Smith said the amount of resources the town puts into each kind of housing should be proportional to the type of user: homeless, those with disabilities, low-income people, workforce housing, and so on.

'Overstated to some degree'

In Bloomington, Sheila Montney wanted to have a community conversation about a variety of segments. She also questioned the conventional wisdom about the housing shortage.

“I think it's overstated to some degree. I believe we certainly have a gap,” said Montney.

Montney has a different take on one of the roots of the housing shortage: the low velocity of home sales. Higher interest rates mean less ownership turnover because people don't want to refinance and pay more. Seniors may not be able to afford to downsize because the runup in assessments means they will pay the same amount for less house.

Montney said another housing challenge for some seniors is staying in the house they have owned for decades. Montney’s constituents tell her the assessment hikes and the property tax bill increases that follow from that are squeezing seniors out of homes. It’s not just seniors. Her anecdote is from a member of the public who spoke at a council meeting after moving to the Twin Cities from Texas.

“He said I purchased a home for my family that I could afford, but I did not budget for the fact that my equalized assessed valuation in this one year alone was at plus 34%,” said Montney.

That's a different take on the traditional notion of housing affordability that it can be addressed by controlling property tax rates.

Bloomington council member Mollie Ward is also looking at property taxes. She said people often don't want to improve older properties because their taxes go up. They tend to sit on it.

"The city of Detroit had the idea of basically incentivizing those improvement rather than just sitting on the land," said Ward.

Ward said the city could encourage improvements with a tax break, or even penalize out-of-town landowners who are not doing anything with their property.

Mayor Chris Koos of Normal addresses a different market segment. He compared the twin cities of Minneapolis and St. Paul, Minnesota. St. Paul has a significant housing crisis. Minneapolis does not, he said. Minneapolis’ approach was straightforward, targeting an increase in units for a single sector of the market.

“And they were doing it at the high end … move people up and out of housing at a lower level. It had a stairstep effect all the way down to what would be considered affordable and entry-level housing. And it helped the homeless problem as well,” said Koos.

Federal Reserve studies do show there can be a knock-on effect from upper-end housing construction, though it would not eliminate a shortage in workforce housing for middle-income residents. It can, though, encourage landlords who have deteriorated housing to improve it to remain competitive in the market. Promoting upper-tier housing construction may also prove easier to get developers on board because return on investment margins tend to be better in that segment.

With so many different economic forces getting in the way of new home construction, it’s going to take every creative idea out there to move the needle.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.