A booming Montana city's struggle with homelessness is a warning — and a model — for the West

• Missoula has faced rising homelessness as housing costs surge and shelter capacity is strained.
• A new ordinance regulating sleeping outdoors is pushing more people to seek shelter services.

Housing costs and the homeless population have soared in the Western Montana city of Missoula this year.

For the first time ever this year, the city's largest emergency shelter was kept open year-round rather than just during the frigid winter months. Jill Bonny, executive director of the nonprofit Poverello Center, which runs the city's only two emergency shelters for adults without kids, said they're already operating near capacity.

"I honestly thought maybe we'd have 50 or 60 people at night, but our average was 120 individuals through the summer," Bonny told Business Insider. She added that her shelters simply can't accommodate the number of people still sleeping outside in the city of about 79,000.

Homelessness — and shelter occupancy — has spiked in Missoula over the last several years. Between 2021 and 2023, the city's two main shelters saw a 53% increase in the number of nights of shelter provided to Missoulans experiencing homelessness. It's also a statewide issue: Montana saw a 551% increase in homelessness between 2007 and 2023 — the largest increase in the nation.

And it's directly related to the surge in housing costs in Missoula and across the state. Particularly since the pandemic popularized remote work, a flood of affluent transplants has overwhelmed the housing market, pushing rents and home prices way up. Missoula's struggles with rising housing costs and homelessness reflect issues plaguing much of the West and Sun Belt, where transplants have moved in droves in recent years. But its efforts to boost affordability and address homelessness could chart a path forward for localities facing the same issues.

Advocates for those experiencing homelessness say there's much more work to be done. The city recently cracked down on unsheltered homelessness in the wake of a Supreme Court ruling allowing people to be fined or arrested for sleeping in public places even if there's no available shelter bed. Local lawmakers say the city needs more state and federal funds to aid those experiencing homelessness.

A spike in homelessness

Recently, the city has begun cracking down on unsheltered homelessness, citing a surge in community complaints about public camping. In June, the city council passed an ordinance banning camping between 8 a.m. and 8 p.m. on city land and the council is debating expanding it to ban overnight camping in city parks.

Since the anti-camping ordinance went into effect in July, the city's shelters have seen an uptick in the number of people seeking a bed, a hot meal, or even just a place to go during the day, Bonny said.

Bonny wants the city to invest in more shelter beds, transitional housing, and an authorized "crisis camping" area where people who don't want to move into a shelter can live in tents.

"If we're going to tell people where they can't be, we need to tell them where they can," she said. She also says the city desperately needs to invest in more mental healthcare and addiction treatment services.

Not far from downtown Missoula, one temporary solution is in effect. The nonprofit New Hope Ministries teamed up with the county to create temporary housing in hard-sided shelters where people experiencing homelessness can find some stability before moving into permanent housing.

City councilmember Bob Campbell, who co-sponsored the anti-camping ordinance, said the city doesn't have the resources to provide a shelter bed for every person experiencing homelessness.

"There's only so much that we can do, at least from a city standpoint, from a municipal budget standpoint, to address the issue," he said.

Campbell said he plans to join a city delegation that will visit the state legislature next year to ask for more state funding for homelessness and housing.

Building more housing is key to solving homelessness

Affordability is at the root of homelessness in Missoula and across the US.

Missoula's median home price has ballooned from $310,000 in 2019 to $545,000 today. It's a statewide problem: Montana's housing market was named the least affordable in the country this fall. It's a statewide problem: Montana's housing market was named the least affordable in the country this fall.

Montana has taken big steps in addressing housing affordability issues. The state legislature recently championed a slew of bipartisan pro-housing policies dubbed the "Montana miracle" by housing advocates that are intended to make building denser housing easier.

Missoula is doing more than many other Western cities to invest in housing. The city is preparing to approve a new land-use plan that will overhaul city zoning laws and development codes, legalizing denser housing construction citywide. Campbell is optimistic the updated policies will "do a much better job in allowing multiple different kinds of housing to come into Missoula that wasn't the case before."

Bonny agrees that building more housing needs to be the first step. "If I could snap my fingers and something would be fixed — we need more housing, and we need more supportive housing," she said.

The skyrocketing cost of housing has caused many other longtime Missoulians to question whether they can afford to stay put. David Stalling, a Marine Corps veteran and wildlife conservationist, has lived in Missoula for more than thirty years. He loves the progressive college town, where he can spend his mornings just north observing grizzly bears in their native habitat. But he's considering leaving.

After losing his home to foreclosure in 2006, Stalling, 62, is struggling to pay the $1,200 rent for his studio apartment, which has risen from $900 when he moved in three years ago. Stalling, who's suffered from PTSD, depression, and substance abuse issues, wants to see unhoused people in Missoula get the same life-saving support he got from the government as a veteran.

"You shouldn't have some billionaire living in a giant mansion up in the Bitterroot contributing to the destruction of so much of what we care for while good people are sleeping out in the cold," Stalling said. "It's just not right."

Are you dealing with housing insecurity or unaffordable rent? Share your story with this reporter at erelman@businessinsider.com.