Montana cities need pro-housing reforms
Workers, renters and young families are getting priced out of Montana’s premier cities in an affordability crisis that reached new heights last year. But it’s not just competition over scarce housing from pandemic buyers that is driving up home prices. Strict local zoning regulations exclude low and middle-income residents and worsen Montana’s housing shortage.
The new Montana Zoning Atlas report from Frontier Institute reveals just how hard it is to build affordable housing in Montana. As a result of exclusionary zoning regulations like Single-Family Zoning and Minimum Lot Areas, the atlas finds 70% of primary residential areas in Montana’s most in-demand cities either outright prohibit or penalize affordable multi-family housing development.
It’s time for Montana leaders to end these exclusionary zoning practices. Our leaders can adopt pro-housing reforms that give landowners the freedom to build new homes where they are needed most. The best part? These reforms can be implemented at no cost to taxpayers.
Exclusionary zoning practices restrict the types of homes allowed in a particular neighborhood, often separating single-family homes from multi-family homes like duplexes and triplexes, which are more affordable by design.
Exclusionary Single-Family Zoning can either outright prohibit multi-family homes or penalize them by conditioning approval on public hearings, special requirements or a long and costly discretionary permit process.
Similarly, Minimum Lot Areas require a certain size of property for different types of homes. Minimum Lot Areas effectively prohibit multi-family development when the lot area required exceeds the dimensions of existing lots, creating de facto Single-Family Zoning. Minimum Lot Areas can also penalize multi-family housing by requiring larger and more expensive lots for each additional unit added to a building.
Together, Exclusionary Single-Family Zoning and Minimum Lot Areas effectively serve as invisible billboards at the gates of growing Montana neighborhoods which read: “low and middle income residents are not welcome here”.
It’s not surprising to learn that cities at the epicenter of Montana’s housing shortage are the least welcoming to affordable types of housing. More than half the primary residential areas in Bozeman and over three quarters of residential land in Missoula prohibit multi-family housing using a combination of Exclusionary Single-Family Zoning and Minimum Lot Areas. Whitefish is a close second with 63% of residential areas that prohibit multi-family development. It’s no wonder why median home prices in these communities exceed $450,000.
Among all the cities assessed in the Montana Zoning Atlas report, two-family housing is welcomed without regulatory penalties on just 29% of primary residential land, while three-family housing is welcomed on only 8%.
While regulations certainly aren’t the only factor driving the cost of housing, the Montana Zoning Atlas demonstrates a clear need for cities to reduce or eliminate exclusionary Single-Family Zoning practices and Minimum Lot Areas.
Montana officials should start with restoring landowners’ right to build two-to-four family housing in zones which currently only permit single-family homes. Next, officials should eliminate Minimum Lot Area penalties on multi-family homes or follow the City of Helena’s lead by eliminating Minimum Lot Areas entirely.
State lawmakers should consider prohibiting Minimum Lot Areas greater than 1/8 of an acre (approximately 5500 square feet) and Minimum Lot Widths greater than 40 ft. in municipal areas already connected to water and sewer.
Everyone will benefit from a more welcoming Montana. Building more homes is the only way to ensure that our communities can grow while remaining vibrant, entrepreneurial, and affordable for low and middle-income Montanans.
Kendall Cotton is president and CEO of the Montana-based Frontier Institute.