Exploding home prices and high rents are creating concerns across Montana and, as such, I am hearing from anxious folks wondering what is happening and what can be done. Let’s first look at the primary causes.

Several demographic factors have contributed to a reduction in the supply of housing. Between 2010 and 2020 Montana’s population grew 10% while housing units only increased 7%. The average number of people per household in the 1940’s was 3.7 versus an average of 2.5 people today. COVID-19 further tightened demand as many individuals fled other states to experience greater personal freedom and Montana’s low population density.

Increasing the supply of affordable housing is the right answer. So, what is limiting the building of affordable homes?  Since numerous states have already experienced this challenge, I looked to them for possible solutions.

Policies that have been tried and failed include government-built housing and/ or providing broad rent subsidies. I personally do not support government picking taxpayer pockets to fund either a rent subsidy or government construction.

States that had the most success asked this question: “Why has the market failed to provide a sufficient number of affordable homes?”

The answer, to nobody’s surprise, is that regulations prevent the market from functioning as it should.

The most affordable stick-built housing is 2-4 family units (duplexes, triplexes, and four-plexes). Yet most communities, including Bozeman, have strict zoning rules requiring large minimum lot size, a multi-family residence exclusion, and strict parking requirements.

Many also ban apartment rentals in private homes, i.e., the “additional dwelling unit” in the basement, above the garage, or even in the backyard.

Further, modern, cost-effective manufactured homes are often “zoned out” even though they are frequently indistinguishable from regularly constructed dwellings.

In essence, I found that high demand jurisdictions often use local control to “zone out” affordable housing options, leading to short supply and high prices. Some states have addressed these issues.

Oregon has ensured that the following can be accomplished “by right.” Four-plexes can be built in cities, triplexes and duplexes can be built in towns, and lots can be subdivided. Some states have allowed additional dwelling units “by right” while others are allowing manufactured homes from approved lists to be placed upon lots “by right.”

Montana is a local control state and local government is the primary source of zoning regulations. Ultimately, local governments can choose to change zoning restrictions to be more favorable to affordable housing, but they often face stiff resistance from the “not in my backyard” crowd.

Perhaps in Montana the answer is somewhat carrot and somewhat stick. For example, a high demand jurisdiction would be required to develop their own plan for affordable housing or, absent a local plan, comply with state guidelines. This solution is more top-down government than I tend to support, but empowering individual property rights might be necessary to overcome the “not in my backyard” challenges zoned into many communities.

What are your thoughts as we look to address this issue? Thank you for allowing me to represent you.

(1) comment


Lew Jones is right. He has identified the true causes of the housing shortage - bad zoning regulation and nimbyism. Like Mr. Jones, I am totally opposed to government subsidies or grants for housing. (Or for anything.) Subsidies punish other taxpayers who are struggling to pay their own rent. Subsidies distort market forces and normal market signals that would encourage normal housing development. Thanks for this informative article.

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