Has Bozeman’s rental market finally flipped?

Bozeman’s Lauri Vandermark expects to save thousands on rent this year after renegotiating her lease in what’s increasingly looking like a flooded rental market in one of Montana’s most expensive cities.

Vandermark, who moved to Bozeman from Georgia, said she “fell in love” with the area last summer while driving through on her way to a job in Alaska.

She said she splits rent with her daughter, a veterinary assistant, and the two share a two-bedroom, two-bathroom apartment in a newly constructed complex on the city’s fast-growing western fringe.

Vandermark said her landlord is drafting a new lease, but she anticipates that her $2,900 monthly rent will decrease by several hundred dollars. 

“We haven’t signed the paperwork yet, but so far it looks like it’s a go,” Vandermark told Montana Free Press. 

Not long ago, tenants in Bozeman leveraging cheaper rent would have been unheard of, unthinkable even, but real estate experts largely agree that a glut of newly built apartments in the city is driving down rental prices across the board, especially in new construction.

David Fine, the city’s urban renewal program manager, offered this succinct advice: “It’s time to go negotiate your rent with your landlord if your lease is coming up.”

Casey Rose is a real estate advisor with Sterling CRE Advisors based in downtown Bozeman. The company tracks and studies housing trends, and Rose said that 3,042 rentals have been built in Bozeman since 2021, with more than 1,000 of those units completed in 2024. Hundreds more, especially near the Montana State campus, are currently under construction, and, according to Rose, more than 4,000 rental units are still in the planning pipeline.

Rose said that the vacancy rate in Bozeman is at least 12%, with some brokers anecdotally reporting vacancy rates of up to 20% due to the new construction. The figures suggest that hundreds of units are sitting empty in the city.

Vacancy rates between 5% and 10% are considered “healthy,” meaning that there isn’t too much demand or supply at any given time, according to Rose. 

To put these numbers in perspective, a citywide housing report from 2019 showed a less than 2% vacancy rate in the city’s rental stock. Rentals of any kind were extremely hard to come by, and would-be tenants scrambled to find available housing. Landlords had the upper hand.

Now, it seems, Bozeman’s rental market has flipped.

“What we’re seeing is all these units coming online at the same time,” Rose said, describing the situation as “classic supply-and-demand” economics.

Rose pegged the average rent for a one-bedroom apartment in Bozeman at just over $1,900 per month, which is largely the same as last year. However, two-bedroom apartments have actually decreased in price, averaging just over $1,700 per month.

“You can get something for under a thousand bucks as long as you get a roommate,” Rose said. 

MTFP called several companies offering newly constructed apartments in Bozeman, some advertising “luxury” style apartments, and found they’d lowered rents in the past year. 

Kayla Salinas is a leasing agent at the newly built Oxbow Apartments in Bozeman. The 268-unit complex is just off Huffine Lane and South Cottonwood Road, and bills itself as an “exquisitely designed” village.

Salinas said she’s signing leases for hundreds less per month compared to last year, and that rents have tumbled from $2,200 to $1,800 per month for one-bedroom apartments. She said she has 39 rentals ready to lease, with up to two months free rent upon signing, which brings rates down to around $1,482 for a one-bedroom apartment.

A check on Bozeman’s newly built Edison Apartments, and several others, showed similar discounts, or “concessions” as they’re known in the rental industry. 

Leasing agents at the Edison said they’re offering up to two months free rent on leases signed for 17 months. With those concessions, a one-bedroom apartment at the Edison is now leasing for about $1,495 a month compared to $1,900 last year. There are 33 available rentals at the 231-unit development, which is just off Garfield Street and close to MSU.

At least for now, the surplus doesn’t appear to be slowing development of high-end aparments. Near MSU, two complexes with dozens of units each — Highmark Bozeman and boötes — are under construction. Highmark, promising high-end finishes, on its website is currently offering up to eight weeks free rent on two bedroom townhomes. Boasting luxury amenities, boötes on its website offers $500 gift cards to new renters.

Fine, with the city, said there was a rush to build all kinds of housing in Bozeman after the COVID-19 pandemic. That developer speculation, he said, became a double-edged sword, creating much-needed rentals within the city, but largely within the market-rate sector, or what’s known as “luxury” apartments.

Just how much housing should be built in Bozeman each year? Fine said the city would like to see roughly 1,200 various types of units built each year to satisfy future growth.

“If we don’t build at least that much, you will expect rent and housing prices … to increase,” Fine said. “I think when I look at this market, we’re only seeing stabilized home values and stabilized rents because we finally caught up.”

While Bozeman needs more affordable housing, Fine said, the current influx of market-rate apartments will likely drive prices down across the board, including in the city’s older, less expensive rental stock. 

“We need more housing at all price points, and market-rate rentals are a part of that,” Fine said. “Are they affordable to everyone? Absolutely not. But if we don’t build them, it’s as likely as not that the affordable side of the ledger can’t keep up.”

Bozeman rents had nearly doubled in the past six years, with a one-bedroom apartment going for about $1,000 in 2019, according to city statistics. The city’s housing market, too, has also subsided. In May, the median price of a single-family home sold in the Bozeman city limits was $765,000, a 6.7% decline from the homes sold in May of 2024, according to figures from the Gallatin Association of Realtors. 

Bozeman Mayor Terry Cunningham said adding affordable housing in the city is a complex mixture of federal tax credits, developer incentives, and public and private donations. 

He said the city maintains an affordable housing fund that receives roughly $1 million each year from taxpayers to jumpstart various projects around the city. 

The mayor highlighted the newly constructed Beaumont Apartments, an income-restricted development just off Tsasche Lane available for those making under 60% of the area median income, or about $50,000. Apartments at The Beaumont start as low as $1,271 for a one-bedroom. 

“We’re seeing people moving in there who are either, ‘Hey, I used to live in my car, and now I can afford this place,’” Cunningham said, or ‘Hey, I have six roommates, and now I can live in this unit with two.’”

Cunningham noted that while the definition of affordable housing means renters at certain income levels spend less than 30% of their monthly income on housing, it’s not uncommon for many renters in Bozeman to spend half their paychecks on rent. 

Bozeman’s city commission passed an updated affordable housing ordinance in January that gives a variety of incentives to developers who bring rental prices down to affordable levels. Those incentives typically include relaxed building code standards such as building height, setbacks from the street and parking requirements. 

Bozeman’s mayor said there are currently more than 800 units of affordable housing either for rent, under construction or in the planning phase in the city. He added that continued growth in all aspects of the housing sector should keep rents from roaring back to pandemic-level prices.

“To me, it all boils down to who gets to live in Bozeman,” Cunningham said. “If we have a scarcity mindset, saying that we don’t want to produce more housing stock, essentially we’re saying we want millionaire neighbors, and we don’t want to accommodate the workforce of Bozeman.”

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