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HELENA — A bill that would ban single-family zoning designations in Montana cities in an effort to boost affordability by encouraging more duplex, triplex and fourplex housing received a cool reception during a hearing before the House Local Government Committee this week.

The measure, House Bill 134, is sponsored by Rep. Danny Tenenbaum, D-Missoula. He called it a practical way to make it easier for market forces to provide growing cities with the housing necessary to accommodate larger populations. Existing zoning rules, he argued, have driven up housing prices by crimping the supply of new housing options, particularly in high-demand communities like Bozeman, Missoula and parts of the Flathead Valley that are increasingly unaffordable for many residents.

“We can no longer be members of the communities we grew up in. We’re being evicted from our own state,” Tenenbaum said. “I know that sounds like hyperbole, but it’s the reality for an increasing number of Montanans.”

Tenenbaum also argued the Legislature should take control of municipal zoning because local politics have prevented mayors and city commissions from effectively addressing their housing problems. He requested the bill, he said, after coming away frustrated from meetings with Missoula Mayor John Engen and City Council members about reining in zoning requirements there.

“They said they want to do this, but they can’t because a few loud voices appear at local planning boards and City Council meetings and say, ‘Absolutely not. We cannot do this — it would ruin our neighborhood character,’” Tenenbaum said. “And that scares city councils, it scares elected officials, and I think it really gets at the root of the problem, why we’re not seeing sufficient supply in certain parts of the state.”

The bill’s opponents, however, criticized it as a top-down approach to an issue that should be left to local governments. They worry, too, that the bill would strip towns and cities of the authority they need to manage infrastructure, like sewer systems, that could be overloaded by higher-density development.

Opponents also noted that zoning regulations give existing property owners certainty about what can happen in their neighborhoods, and questioned whether looser regulations would produce affordable housing instead of high-end condos and Airbnb-style, short-term rentals. 

“There’s nothing in this bill that requires the housing to be affordable,” said Kelly Lynch, representing the Montana League of Cities and Towns.

As introduced, the bill’s primary provisions would apply to Montana cities of 50,000 people or more, meaning Billings, Missoula, Great Falls and, once 2020 population counts are tallied, likely Bozeman. It would ban those cities from adopting zoning ordinances that prohibit duplex, triplex or fourplex housing on lots that currently allow single-family homes.

The bill also contains a similar provision preventing cities of 5,000 or more people from prohibiting duplex housing, which would apply in Montana cities as small as Livingston, Sidney, Columbia Falls, Lewistown and Polson. It also includes a provision forbidding cities of 5,000 or more people from requiring off-street parking for fourplexes or smaller housing developments, removing a development requirement that often constrains higher-density housing.

The measure explicitly wouldn’t apply to cities and towns with fewer than 5,000 residents or to property outside city limits under the jurisdiction of county planning departments. It also wouldn’t affect homeowner association covenants.

As housing affordability has become an increasing concern in many cities across the nation, measures like the Tenenbaum bill have been debated or approved in some states and large cities. Oregon, for example, passed a first-in-the-nation state ban on single-family zoning in 2019, and Minneapolis implemented a similar measure that same year.

Proponents of those measures typically argue that not-in-my-backyard sentiment from existing property owners opposed to development in their neighborhoods pushes city governments to adopt overly restrictive regulations. They say those regulations prevent new construction that could create more opportunities for renters and first-time homebuyers, who, as less-established community members, typically have less power in local politics.

Several Montana cities have experienced extraordinary pressure on their housing markets as they’ve become destinations for out-of-state arrivals in recent years — a trend that has likely been exacerbated by the COVID-19 pandemic as remote work frees more professional workers from the need to live in pricey coastal housing markets. According to the Gallatin Association of Realtors, for example, Bozeman, saw its median sale price for single-family homes rise from $330,000 in December 2015 to $431,000 in 2019 — and then to $642,000 last December.

One supporter of the bill, Bozeman planning board member Mark Egge, testified at the hearing Tuesday that governments basically have two types of options for tackling the housing crunch: measures that create subsidized housing for lower- and middle-income residents, and memasures like Tenenbaum’s bill that try to shift the broader housing market by making it easier and cheaper to build more housing.

The challenge with the subsidy approach, Egge said, is that the cost of subsidized housing programs tends to fall on other residents, creating a two-tiered system where a few people get access to less expensive housing, but people who don’t qualify for the assistance have their cost of living pushed higher by the taxes necessary to support such programs.

“This drives the cost of market-rate housing further out of the reach of locals, and leaves locals, even high-earning households, dependent on government handouts and subsidies to afford housing. And I find that anathema to our way of life here in Montana,” Egge said. “The alternative is a free-market approach.”

The Tenenbaum bill was also supported by the Montana Building Industry Association and Libertarian advocacy group Americans for Prosperity, as well as representatives of the University of Montana and Montana State University student governments, who said they thought it could make it easier for students to find housing near college campuses.

In addition to the League of Cities and Towns, the bill was opposed by the Montana Association of Planners, the Montana Smart Growth Coalition and the city of Bozeman.

SK Rossi, a lobbyist representing Bozeman, argued the city is already taking action to tackle its affordability crunch. Rossi pointed to a zoning policy in Bozeman that requires developers to include some designated affordable homes in larger housing projects.

“Bozeman is trying desperately to figure out the affordable housing crisis in their city,” Rossi said. “We’d appreciate a no vote on this bill so we can continue to do that with the residents of Bozeman.”

The Local Government Committee will vote on whether to advance the bill at a later date, but several lawmakers on the committee signaled Tuesday that they think the measure goes too far.

Rep. Mary Ann Dunwell, D-Helena, for example, asked Tenenbaum if he would be open to amending the bill to make its provisions optional.

Rep. Steve Galloway, R-Great Falls, said he thinks the bill is so disruptive it would expose the state to lawsuits from existing property owners who feel they’ve been harmed by the zoning rollback.

“I feel like we’re almost talking about going back to the Wild West,” Galloway said.

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This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Discuss MTFP’s Long Streets work with Lead Reporter Eric Dietrich at edietrich@montanafreepress.org.

Eric Dietrich is a journalist and data designer and the founder of the Long Streets economic reporting project. His reporting focuses broadly on Montana’s governance and economic opportunity, with particular focus on the state budget and tax policy. He also contributes data reporting across the MTFP newsroom. Before joining the MTFP staff in 2019, he worked for the Great Falls Tribune, Bozeman Daily Chronicle, and Solutions Journalism Network and also earned an engineering degree from Montana State University. Contact Eric at edietrich@montanafreepress.org, 406-465-3386 ext. 2, and follow him on Twitter.