Cities in Montana use zoning to tell us what kind of houses can be built and where. They say whether we can have single-family housing in one neighborhood, or apartment buildings in another.
The Montana Zoning Atlas2.0 uses the National Zoning Atlas standardized methodology to evaluate 13 fast growing Montana counties to see how Montana communities treat affordable types of housing.
The Atlas demonstrates how strict local zoning regulations exclude low and middle-income residents and worsen Montana’s housing shortage.
The Atlas findings support a growing Montana movement to address strict local zoning regulations with pro-housing reforms:
Key Points
50% of zoned land in thirteen of Montana’s most in-demand counties either outright prohibit or penalize affordable multifamily starter homes like duplexes.
Among the major cities assessed in the Montana Zoning Atlas report, two-family housing is on average welcomed by-right on just 41% of zoned land, while 3+ family housing is on average welcomed on only 29%.
The Montana Zoning Atlas demonstrates the need for communities to eliminate harmful California-Style Zoning practices and Excessive Minimum Lot Areas.
Policymakers should enact Pro-Housing Reforms to make Montana cities a more welcoming place for low and middle-income residents.
Zoning In Montana
Rankings
92% of zoned areas in Great Falls either outright prohibit or penalize 2+ family starter homes like duplexes. Blue areas indicate where 2+ family homes are welcomed by-right:
In contrast, 58% of zoned areas in Helena welcome 2+ family homes by-right (Blue Areas):
82% of zoned areas in Billings either outright prohibit or penalize ADU’s. Blue areas indicate where ADU’s are welcomed by-right:
In contrast, 72% of zoned areas in Whitefish welcome ADU’s by-right (Blue Areas):
Bozeman welcomes ADU's by-right in all residential zones and 57% of zoned land overall (Shown in blue areas below). Bozeman also recently adopted a new ordinance which allows landowners to request departures from zoning regulations to allow up to two ADU's per lot:
Comparisons
Comparison of Montana cities that welcome the most and least missing middle housing:
Comparison of Montana counties that welcome the most and least missing middle housing:
The most restrictive zoning is often the most complicated zoning. Here is a comparison of the types of zoning requirements used by major Montana cities and counties:
Explore The Atlas
Explore all the counties and cities examined in the Montana Zoning Atlas 2.0 using the interactive app below.
Montana’s affordable housing crisis is fundamentally driven by a shortage of available homes.
From 2010-2020 Montana’s population grew 10% while housing only increased 7% — contributing to sky-high home prices.
So why isn’t the market keeping up with demand for affordable housing?
The research consensus is clear that the plethora of zoning regulations commonly imposed by local governments play a significant role in limiting market supply and driving up the costs of housing:
A 2021 report by Pew Charitable Trusts to the Montana Legislature found jurisdictions that heavily regulate their housing supply see higher housing costs, slower economic growth and fewer homes built.
A 2021 study from the National Association of Homebuilders estimated that excessive regulations add as much as $93,000 to the average price of building a single-family home.
In a 2019 article in Montana Business Quarterly, the Director of the Bureau of Business and Economic Research (BBER) at the University of Montana said “there exists ample evidence that local regulation has a significant impact on housing costs.”
There is also an emerging political consensus around the effects of local government zoning regulations on the cost of housing:
President Barack Obama developed a toolkit in 2016 which said that “local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently”
In a 2019 executive order, President Donald Trump called zoning regulations “the leading factor in the growth of housing prices”
In a 2021 veto letter, Montana Gov. Greg Gianforte said “the most effective way to address housing affordability challenges is to reduce the panoply of regulations faced by housing development.”
In a 2021 Fact Sheet President Joe Biden’s administration said “for decades, exclusionary zoning laws – like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing – have inflated housing and construction costs and locked families out of areas with more opportunities.”
Harmful Zoning Practices
California Zoning
What is California Zoning?
California Zoning was pioneered in cities like Los Angeles during the 20th Century and has made its way to Montana. California-Style Zoning practices reserve vast portions of Montana cities for expensive single family homes on large lots, prohibiting middle density starter homes like ADU’s, duplexes, townhomes and triplexes that are more affordable by design. California-Style Zoning can also penalize middle density housing by conditioning their approval on public hearings, special requirements or a long and costly discretionary permit process.
How does California Zoning hurt Montana?
It contributes to Montana’s housing shortage, driving up the cost of housing for everyone.
It prohibits affordable starter homes in desirable and opportunity-rich areas of town.
It forces landowners to jump through regulatory hoops to build affordable homes.
It violates landowners’ right to build affordable starter homes on their own property.
It drives urban sprawl, eating up surrounding open space and rural land with development.
It inflates infrastructure costs by forcing housing development to spread out, requiring more government spending and higher taxes.
What does the research say about California Zoning?
Researchers say California-Style Zoning practices lead to more expensive housing and fewer homes being built:
A 2019 paper published by the Journal of the American Planning Association said that Exclusionary Single-Family Zoning “makes it harder for people to access high-opportunity places, and in expensive regions it contributes to shortages of housing, thereby benefiting homeowners at the expense of renters and forcing many housing consumers to spend more on housing.”
2021 testimony to the Montana legislature from Senior Research Fellow Emily Hamilton of the Mercatus Center noted “cities and towns across Montana have many rules that limit the quantity and type of homes that can be built, including minimum-lot-size regulations, height limits, and single-family zoning. In part owing to these rules, many residents across the state are suffering from housing costs rising faster than in other states.
Bozeman’s 2021 Code Audit called the city’s Exclusionary Single-Family Zoning practices a “significant barrier to producing and preserving affordable housing.”
The Montana Housing Task Force has identified Single-Family Zoning Practices as a significant contributor to Montana’s housing shortage.
Excessive Minimum Lot Areas
What are Minimum Lot Areas?
Minimum Lot Areas are a common local government zoning regulation which mandates that a certain type of home can only be built on a certain size of lot within a particular zoning district.
Even when no minimum lot size is required, other dimensional regulations such as minimum setbacks, maximum coverages and maximum densities can add up together to impose an effective minimum lot area for a certain type of home.
Minimum Lot Areas effectively prohibit multi-family development when the lot size required for duplexes, townhomes etc. exceeds the dimensions of the existing lots. This creates “de-facto” Single-Family Zoning.
Minimum Lot Areas can also penalize affordable multi-family homes by requiring larger and more expensive lots for each additional unit added to a building. Additional lot space is often required even if the actual building takes up no more lot space than a single-family home, as observed in modern stacked duplex and triplex designs.
How do Excessive Minimum Lot Areas Hurt Montana?
They contribute to Montana’s housing shortage, driving up the cost of housing for everyone.
They prohibit affordable starter homes like duplexes, townhomes and triplexes when the lot size required exceeds the dimensions of existing lots.
They penalize affordable starter homes by requiring larger and more expensive lots for each additional unit added to a building, even if the building takes up no additional room.
They drive urban sprawl, eating up surrounding open space and rural land with development.
They inflate city infrastructure costs by forcing housing development to spread out, requiring more government spending and higher taxes.
They rob cities of new sources of revenue by blocking more residents and businesses.
What does the research say about Minimum Lot Areas?
A 2021 University of Montana BBER report found Minimum Lot Areas “raised housing prices by 7 and 9%, and estimates of the effect over time reach as high as 20%.”
A 2020 Mercatus Center report said minimum area requirements “limit urban development, driving up lot sizes and thereby increasing housing prices.”
A 2021 Manhattan Institute report found Minimum Lot Area regulation “forces homes to sit on lots larger than what the market might otherwise demand, thereby reducing overall housing production while raising prices for those housing units that are produced.”
In 2019, the City of Helena abolished nearly all Minimum Lot Area Requirements. The Helena Association of Realtors said abolishing Minimum Lot Sizes would “address housing goals by increasing dwelling unit supply while also protecting the character and quality of the city’s neighborhoods.” No one spoke in opposition at the hearing.
Billings also recently moved from Minimum Lot Area requirements to a simpler lot width requirement.
These changes may be one factor keeping average home prices in those cities relatively affordable compared to cities with minimum lot area requirements like Bozeman, Missoula and Kalispell.
2023 Pro-Housing Platform
Everyone will benefit from a more welcoming Montana. At no additional cost to taxpayers, pro-housing reforms will help ensure that our communities can grow while remaining vibrant, entrepreneurial and affordable for low and middle-income Montanans.
Reform #1: Eliminate California Zoning
Local officials should: Reform city zoning codes to restore landowners’ right to build affordable middle density starter homes like ADU’s, duplexes, townhomes and triplexes in zones which currently only permit single-family.
State lawmakers should: The Montana legislature should implement Recommendation 3B from the Montana Housing Task Force, which would broadly restore landowners’ right to build affordable starter homes like duplexes and triplexes in cities.
FAQ:
Q: Does this proposal mandate we all live in tiny apartments? A: No, this proposal gives property owners more freedom to choose what types of homes work for them.
Q: Will ending California Zoning overwhelm municipal utilities with development? A: No, middle density housing is 40% cheaper to serve with up-front utility needs compared to single family development.
Q: Will this proposal cost taxpayers money? A: No, ending California Zoning is a no-cost way Montana government can boost the supply of housing.
Reform #2: Sensible Lot Areas
Local Officials should: Local officials should follow the City of Helena’s lead to eliminate Minimum Lot Areas entirely.
State Lawmakers should: The Montana legislature should implement Recommendation 2A from the Montana Housing Task Force, which would prohibit excessive minimum lot areas in cities greater than 2,500 sq ft. in areas served by water and sewer.
FAQ:
Q: Does this proposal mandate we all live on denser, smaller lots? A: No, this proposal gives property owners more freedom to choose what size of lot they want for their house.
Q: Will prohibiting excessive lot size mandates overwhelm municipal utilities with development? A: No, smaller lots are 40% cheaper to serve with up-front utility needs than excessive lots.
Q: Will this cost taxpayers money? A: No, prohibiting excessive lot size mandates is a no-cost way Montana government can boost the supply of housing.
Additional Considerations
State Lawmakers Should:
Consider well designed incentive programs which would tie state housing funding to successful local zoning reforms. At a minimum, a majority of zoned land in municipal areas with water and sewer service should meet the following parameters in order to be eligible for incentive funding:
Permit 2-4 unit housing and ADU’s by-right.
Impose dimensional standards on lots which cumulatively result in an effective minimum lot size no greater than 2,500 sq ft.
Consider requiring that manufactured housing be treated no less favorably by zoning than other forms of housing.
Consider placing additional limitations on other harmful aspects of zoning, such as residential parking mandates and height restrictions.
Consider efforts to streamline permitting processes both for subdivision review and for zoning, eliminating unnecessary public hearing requirements when simple administrative review is more appropriate.
Local Governments Should:
Consider permitting manufactured housing where other residential uses are also permitted.
Consider adding more flexibility to other harmful aspects of zoning such as residential parking mandates and height restrictions.
Consider efforts to streamline permitting processes both for subdivision review and for zoning, eliminating unnecessary public hearing requirements when simple administrative review is more appropriate.
Consider adopting a self-certification permit program, as recommended by the Montana Housing Task Force.
Creating The Atlas – Methodology Notes
The Montana Zoning Atlas 2.0 was created following the National Zoning Atlas methodology, developed by Professor Sara Bronin of Cornell University.
A few additional notes specific to the Montana Zoning Atlas 2.0:
Why did we evaluate only these thirteen counties?
Creating a Zoning Atlas requires a LOT of time and effort! We chose to focus our efforts on Montana’s eight most populated counties and along with five nearby counties likely to experience “spillover” population growth. The thirteen counties in the Montana Zoning Atlas 2.0 do not represent all the counties in Montana that have zoning.
We invite future researchers to expand on the Montana Zoning Atlas 2.0 to incorporate additional counties into the analysis.
Data Collection
Zoning codes are constantly being updated by local governments. Zoning data collection for the Montana Zoning Atlas 2.0 took place from May – September 2022. We are aware of several jurisdictions such as Bozeman and Lewis & Clark County which have adopted revisions to their zoning code after our data collection period that are not reflected in the Atlas 2.0 report. Additionally, several cities such as Missoula have announced they are embarking on comprehensive code reform efforts in 2023.
We invite future researchers to expand on the Montana Zoning Atlas 2.0 to incorporate future revisions to zoning codes.
Citizen Initiated Zoning Districts
Montana has a unique, tiered system of county zoning referred to as “part 1” and “part 2” zoning. Part 2 zoning, authorized by MCA 76-2-201, represents the classic zoning seen throughout much of the United States, where zoning regulation is both created and administered by the county government. Part 1 zoning, authorized by MCA 76-2-101, is unique in that it allows citizens themselves to petition the government to create zoning districts.
Under Part 1 zoning, 60% of the property owners in an area as small as 40 acres can create custom zoning codes. 50% of the remaining property owners must petition their objection for the zoning to be denied. This “grassroots” style zoning is pervasive across Montana counties. Ravalli County for example, has no Part 2 County Zoning, but has over 40 separate Part 1 citizen initiated zones. Many zones appear to have been created specifically to mandate California-Style prohibitions on multi-family housing and mobile homes.
For the Montana Zoning Atlas 2.0, we chose only to evaluate Part 2 government-initiated districts. We did this for several reasons:
Poor quality data was available for many Part 1 districts, some of which have not had codes revised since the 1970’s.
Not all counties included in the Atlas have Part 1 districts.
Lack of available research about the effects of bottom-up zoning compared to top-down.
We invite future researchers to expand on the Montana Zoning Atlas 2.0 to incorporate Part 1 zoning district data.
Planned Unit Developments
Many communities in Montana allow for the creation of Planned Unit Developments (PUD’s). PUD’s generally allow for more flexible regulations to accommodate developments that would normally not be allowed by the existing zoning district. Sometimes, PUD’s will completely replace the existing underlying zoning districts, representing a new and separate zone governed by a specific PUD ordinance that is not detailed in the zoning code. In these instances, some Montana communities will provide reference to the specific PUD ordinance governing an existing PUD zone shown on a zoning map. Others do not include such references, which makes the specific regulations governing the PUD incredibly hard to decipher. For this reason, when an existing PUD district is found on the Montana Zoning Atlas 2.0, users will find a tooltip note directing them to check with the city/county for the specific PUD agreement instead of displaying the regulations for the zone.
We invite future researchers to expand on the Montana Zoning Atlas 2.0 to incorporate data for specific PUD ordinances.
Form-Based Code
Missoula County recently adopted a form-based code district. Form Based Zoning Codes organize development by the physical form of buildings, rather than uses, as the organizing principle for the code. Missoula’s new Sxwtpqyen Traditional Neighborhood Development Form-Based Code (FBC) has 4 neighborhood units which each allow developers to choose from a certain percentage of 8 “transect zones” which govern development and use. However, for this new zoning code, the transect zones are not yet mapped for each neighborhood unit. To accommodate this scenario, we chose to collect zoning code data for the predominant transect zone with the most percentage allowed in the neighborhood unit.
We invite future researchers to expand on the Montana Zoning Atlas 2.0 to incorporate new data as Missoula’s FBC district becomes more established.
