Local Governments Shouldn’t Wait to Address Housing Crisis

Local governments shouldn’t wait on the courts or the legislature to address Montana’s housing shortage, they should reform their regulations to allow for more housing now.

This month a Gallatin County judge’s order in the MAID v. Montana case officially upheld most of a bipartisan package of pro-housing laws passed overwhelmingly by the 2023 legislature and backed by Governor Gianforte, an effort national media has dubbed the “Montana Miracle”.

This is a huge victory for private property rights that largely vindicates the legislature’s efforts to address Montana’s housing shortage by reforming strict local zoning regulations and giving landowners in cities more freedom to build homes to meet demand. However, with Montana recently ranked as the most unaffordable state in the nation, the time for action on housing is far from over.

First, let’s review the victory. With 2023’s SB 323, SB 528, and SB 245 officially upheld, landowners in Montana cities are now generally free to convert their basement into a duplex rental, free to construct an Accessory Dwelling Unit (ADU) apartment above their garage to house their elderly parents, free to build mixed-use housing developments in commercial zones, and more. The laws broadly legalize middle-density starter home options that are typically more affordable but largely missing from Montana’s hottest housing markets right now.

These reforms aren’t a silver bullet for affordability, but the American Planning Association and others say they will help boost housing supply and bring down costs over the long term.

Despite this month’s order being mostly a victory for the “Montana Miracle”, the court unfortunately did strike down key aspects of one bill, SB 382, that would have streamlined the public input process to speed up approvals for all housing.

Basically, SB 382 had front loaded public participation to the planning stage, requiring cities to redesign a comprehensive new zoning plan with robust public input. A housing development that was in substantial compliance with the new zoning plan would then be approved after a simple administrative review. No need for additional public debate since the public already weighed in on the rules allowing the development. Makes sense!

However, the judge found SB 382 didn’t quite conform with Montana’s constitutional requirements for public participation in government. This is a big blow for cities like Bozeman and Missoula who are nearly at the finish line of implementing a new comprehensive land use plan under SB 382.

While I hope and expect to see this aspect of the MAID order appealed, cities absolutely can still achieve the goals of SB 382 by embracing by-right zoning for housing development and reducing their reliance on conditional use permits, PUDs, variances, spot zoning, and all the other actions that currently trigger duplicative and contentious public hearings for nearly every single housing development in the first place.

By-right zoning is when housing is clearly listed as a permitted use, meaning landowners have a right to build housing as long as they meet all the other zoning requirements. By-right zoning approvals are simple and ministerial, not discretionary and therefore don’t require additional public debate.

Unfortunately, as documented in the Montana Zoning Atlas, many cities shy away from by-right zoning for most types of housing development. To build anything other than a single family home often requires a public hearing, if it’s not outright prohibited. For instance, Kalispell doesn’t permit any multifamily housing in residential zones without triggering an additional hearing to debate the development.

There’s really nothing preventing any City or County today from adopting by-right zoning for all housing development consistent with the goals of SB 382 on their own. Local governments shouldn’t wait on the courts or the legislature to address Montana’s housing shortage, they should reform their regulations to allow for more housing now.

This column originally appeared in Lee Newspapers.