Bill would force Montana cities to allow smaller home lots

A bill heard Tuesday at the Montana Legislature aims to increase the number of modestly priced homes available to Montana residents by reining in the power of city and town governments to require that new homes be built on properties of a certain size. 

House Bill 337, sponsored by Rep. Katie Zolnikov, R-Billings, would dictate that local governments can’t require minimum lot sizes bigger than 2,500 square feet in areas served by municipal water and sewer systems. It’s among the first major proposals to come before this year’s Legislature that aligns with the supply-focused approach to Montana’s housing crunch articulated by a housing task force convened by Gov. Greg Gianforte last summer.

Zolnikov and other proponents told members of the House Local Government Committee Tuesday that minimum lot sizes enshrined in local zoning codes are one of many factors that constrain the state’s housing supply. Land costs are a major component in the cost of new housing, they said, and developers typically build larger, less affordable houses on large lots.

The bill wouldn’t force homeowners or developers to carve out smaller lots from their property, Zolnikov said, but instead make that an option for property owners.

“Local control only works when it works,” she said. “Clearly there is a problem here that local governments haven’t addressed.”

The bill was opposed by a string of local government officials, who argued that passing it would strip authority for land use decisions away from the people who are best positioned to assess the situations and needs of their particular communities. 

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Kelly Lynch, the executive director of the Montana League of Cities and Towns, said local governments plan to introduce an alternative land use planning and housing measure that has been in the works for more than a year.

Lynch acknowledged that smaller lot sizes might be a good housing strategy, but said they should be considered as part of comprehensive land use planning reform.

“Reducing or eliminating minimum lot sizes isn’t, like, the magic trick,” she said. “It is one of the things that can be used and might help in some communities as a package of reforms.”

“It shouldn’t be forced on every community regardless of circumstances,” Lynch added.

While some Montana cities, such as Helena, have acted independently of the Legislature to strike minimum lot sizes from their development codes in recent years, such development requirements remain on the books in others. Bozeman, for example, specifies 4,000-square-foot minimums in its residential zoning code. Kalispell’s code requires lots to be at least 20,000 square feet in its lowest-density R-1 zone.

Supporters of the bill included free market groups, housing affordability advocates and one of the state’s prominent environmental groups.

“We want growth in Montana to happen in our cities as opposed to the rural ranchlands surrounding our cities,” said Kendall Cotton of the Frontier Institute, a Helena-based, free market think tank.

Other proponents included representatives from California YIMBY, Shelter Whitefish, the Montana Environmental Information Center, the Billings Chamber of Commerce and Americans for Prosperity.

Henry Kriegel, a lobbyist for Americans for Prosperity, showed the committee photos of people living in RVs off 19th Avenue in Bozeman during this week’s cold snap.

“These people are working, they’re contributing to society, and I think that it is really important that we get behind these kinds of initiatives,” Kriegel said. “They’re not perfect, they’re not a magic bullet, but they’re a step in the right direction to help communities build and help individuals contribute to their communities by having a place to live.”

Opponents included elected officials and planning directors from the cities of Choteau, Whitefish, Colstrip, Polson, Billings and Belgrade, as well as a representative from the Montana Association of Planners.

Jason Karp, Belgrade’s planning director, said small lots aren’t a “panacea,” noting that his city is seeing homes built on comparatively small 4,000-square-foot lots sell for half a million dollars.

“We’re building like crazy and the prices are what the prices are. It’s hard to fight that with any type of land use regulation,” he said. 

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 [email protected].