As the Montana Legislature moves into the second half of its session, a number of housing-related bills are poised to change statewide zoning and construction regulations in hopes of abating the state’s pervasive housing crisis. Current bill drafts, many of which have seen large bipartisan support, aim to ease housing strains by lowering barriers to the construction of affordable homes across Montana. Democratic and Republican legislators, as well as a host of housing-related nonprofit organizations, have partnered up in support of bills related to zoning ordinances, rental agreements and construction.
The legislature in the coming weeks will consider an array of housing legislation, including bills that would require landlords to provide 60 days notice prior to declining a lease renewal or offering a new lease with different terms; allow for the construction of accessory dwelling units (ADU) in residential areas; create a tax credit for landlords who rent below market rate; and increase the income thresholds for property tax assistance.
Senate Bill 323, introduced by Sen. Jeremy Trebas, R-Great Falls, would allow for the development of duplex housing on lots zoned for single-family residences in cities with a population of at least 5,000 residents. It would also allow for triplex and fourplex housing to be built in Montana cities with populations of at least 50,000.
Put simply, Nathan Dugan, co-founder and president of Whitefish-based housing nonprofit Shelter WF, said, the law would make duplexes a permitted use on single family lots in Kalispell, Whitefish and Columbia Falls, allowing developers to build them on residential sites without requiring the often-arduous public hearing and approval process.
“To build a duplex in a lot in Whitefish, you’d have to go through the public hearing process. I don’t think that those would be particularly controversial, generally speaking, and so having it just be a permitted use streamlines that process,” Dugan said.
Other legislative measures that Shelter WF helped bring to Helena include Senate Bill 245, introduced by Sen. Daniel Zolnikov, R-Billings, which would adjust Montana’s municipal zoning regulations. The bill would allow multifamily housing or mixed-use development as a permitted use where office, retail, or parking is already allowed, and would limit what restrictions cities are allowed to place on their zoning codes.
Kendall Cotton, president and CEO of Montana think tank the Frontier Institute, said that Senate Bill 245 would make it easier for developers to construct homes in the state’s urban areas, limiting sprawl into forest and farmland that many have argued would reshape the state’s rural character.
“It’s focused narrowly on mixed-used and multi-family development in our city centers,” Cotton said of Senate Bill 245, “making sure that we’re allowing for growth in urban areas.”
Cotton also highlighted Senate Bill 382, which calls for the creation of the Montana Land Use Planning Act, a comprehensive bill that would serve as a road map for city planning in attempts to limit the process of approving or denying singular developments, processes which can bog down local governments. The bill includes rules for municipal planning commissions, local land use plans, public meetings and zoning regulations.
“That is a big piece of legislation and it was developed in part by the League of Cities and Towns,” Cotton said. “It ensures that cities are actually doing the work to plan for the future and gives landowners the freedom they need in the zoning codes to build the buildings they need to meet population demands in the future.”
The housing crisis has been particularly acute in the Flathead Valley, where population growth has put unparalleled pressure on the housing market, inflating home costs in a region with limited supply. Much of the housing crunch has been connected to an influx of pandemic-era migrants to Northwest Montana, many of whom work high-paying remote jobs, allowing them to price out local residents.
Median listing prices for homes in Flathead County increased from $487,000 in June 2019 to $678,750 in June 2022, with the number of active listings in the same period dropping from 1,051 to 628. Rental prices also saw a precipitous rise.
In Whitefish, where Dugan and Shelter WF’s advocacy is focused, the housing landscape has seen some of the most drastic changes, pushing longtime residents out of the resort town.
Whitefish built 1,069 units of housing between 2016 and 2021, exceeding the number of units the city needed to keep up with its growing population. However, only 7% of those units were priced below market rate, a percentage that fell far below the 60% of new below-market-rate homes the city needed in order to meet local demand, according to a community housing needs assessment that the city commissioned last year.
By 2030, Whitefish will need 1,310 new homes to support its population, 75% of which must be priced below market rate in order to maintain an attainable housing supply for locals. The assessment, which laid bare these future housing needs, called for local and state intervention to ensure that affordable housing is built in the city.
“Addressing community housing needs is more than just adding supply — it is adding supply at the right price to support the resident and employee community,” the report stated. “In a community where 40% of residences are owned by out-of-area homeowners and investors and 30% of homes are used as second homes and vacation use, the traditional supply-demand approach needs help.”
“From our perspective, when it comes to housing policy, local control only goes so far,” Dugan said, outlining what he described as a slew of anti-housing policies in the United States that are “baked into the system,” and make it difficult for cities and towns to address housing crises.
“The whole system is set up to fight against new housing, and we’re seeing the outcome of forty, fifty years of policy like that,” Dugan said. “Now, when we’ve got such a huge population looking for housing and cheaper homes to buy, there just aren’t that many options in the places that people want to live.”
Both Dugan and Cotton praised the bipartisan support many housing bills have received, characterizing it as a sign of the severity of a problem that has pushed hordes of Montanans out of once-affordable communities.
“That’s been one of the really cool parts of working on housing legislation, is that we’ve seen a pretty large bipartisan support,” Cotton said, calling housing policy an “area of agreement that’s emerging.”
“A lot of arguments surround this concern of local control,” he added. “We take the position that this is something that — we don’t care if it gets done on a local or state level — something just needs to be done.”