Flathead Valley cities feel financial strain of land use law

Planning directors from the Flathead Valley and across the state say the Montana Land Use Planning Act put significant financial strain on cities to meet an aggressive compliance deadline for updating land use plans.  

Some cities were forced to contract out work or hire additional staff, city representatives told the state legislators during a Local Government Interim Committee meeting in Helena last month. Representatives from each of the 10 cities required to comply with the law expressed support for its long-term goal of streamlining housing development, while raising concerns about the challenges of implementing it.  

The Montana Land Use Planning Act, signed by Gov. Greg Gianforte May 2023, mandated the state's larger cities to rewrite their land use plans with extensive public input, update zoning regulations to encourage higher-density development and overhaul the public input process for certain projects. Cities had to comply by May 17. 

It cost Kalispell $1 million to complete the process, according to Development Services Director PJ Sorensen. 

About three-quarters of the cost was put into updating the city’s water and sewer plans to adhere to the law, and the rest was spent to bring on another city planner to help draft and implement the new land use plan.  

“I think those were all costs that at some point in time we would have experienced, but it did get accelerated,” Sorensen said. 

The expense is expected to be offset by a federal grant. The Montana Department of Commerce nabbed $7 million through the Pathways to Removing Obstacles to Housing program to help fund cities’ planning efforts as they work to comply with the legislation.   

Kalispell is set to receive just over $1 million through the program — roughly half a million above the next-highest award.   

Columbia Falls City Manager Eric Hanks said he was appreciative of the $391,270 received, but that the assistance was “significantly insufficient for what we really needed to do.”   

Hanks said that he had to scale down two preliminary engineering reports for the city’s wastewater and water studies and minimize a contract with a land use planning consultant because of the money being spent on the update to the land use plan.  

“Just to stay within our budget, we had to sacrifice other priorities within the city because of an unfunded mandate,” he said.    

Columbia Falls fell behind the May deadline to comply with the law partly due to the lack of a city manager for about a year and half, according to Hanks. The city’s updated zoning and subdivision regulations are expected to be adopted June 15.  

Whitefish Planning and Building Director David Taylor said the city was already behind on overhauling its growth policy adopted in 2007, though parts of it had been revised over time.   

However, he said the higher costs were largely driven by the short timeline for compliance.  

“We could have probably done the land use stuff in-house, but there was just no way we could have done it with the timeline, so we had to hire a land use consultant for that,” Taylor said.  

Taylor also had to hire a full-time, long-range planner to help rewrite the city’s zoning regulations. Whitefish is expected to receive $391,270 through the grant program.  

Other larger cities had to contract out work. Bozeman Community Development Manager Chris Saunder said complying with the law required significant staff time and financial resources that culminated in at least $150,000 to outside consultants to help develop a new land use plan and update zoning regulations.  

Helena spent just shy of $300,000 on contracted services, according to Christopher Brink, the city’s community development manager.  

SOME CITIES also expressed concern that the public appeals process could hang up development, the law was intended to streamline.   

To comply with the law, cities had to shift subdivision approvals to city staff, ending the Planning Commission and Council review process, which included public hearings. Residents will still have a window to submit written comments and can appeal decisions made by planning staff.  

Sorensen said the system hasn’t been tested yet.  

“Nobody really knows for sure how that’s going to work. If people are going to try to clog up the system by making one appeal after another and adding time and expenses,” Sorensen said.  

Cities also argued that the state’s definition of who qualifies as an “aggrieved party” eligible to file an appeal is too broad.  

Taylor agreed that the process hasn’t been determined yet. 

“Who has standing? Who is an aggrieved party? I mean there is a definition, but it’s pretty open ended,” Taylor said. “It’d be nice to have a little more clarity.”  

“Since it’s such a new process and it's a different process than we’ve traditionally had with appeals of zoning administrative decisions, we just have uncertainty of how this is going to play out,” he said.   

Outside agencies involved in the development approval process will continue operating as before, which could drag out approvals, some cities said.  

“I love my friends at [the Montana Department of Transportation], but they do not have the capacity locally in their offices to be as responsive as the development community and the cities want them to be,” said Great Falls Planning and Community Development Director Brock Cherry.  

However, planning directors largely supported the law’s long-term goal of making the development approval process more predictable and pushing cities to prioritize public engagement.  

“We are new in the process, but I can say that a more streamlined approval process is happening in real time,” said Eran Pehan with the city of Missoula. 

Reporter Jack Underhill can be reached at 406-758-4407 or junderhill@dailyinterlake.com. If you value local journalism, pledge your support at dailyinterlake.com/support.