A recent report to the Legislature showed that 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? One answer is simply that affordable homes are illegal to build in large portions of Montana’s fastest-growing communities.
Homebuilders will tell you it’s most economical to build two- to four-family housing like duplexes, triplexes, and fourplexes. But many local governments impose strict zoning regulations, minimum lot sizes and parking mandates which prohibit the creation of affordable multi-family housing.
I frequently argue on these pages that it’s time for governments to legalize affordable housing and embrace regulatory reform as a key strategy. I often receive passionate arguments in opposition to this view. These arguments tend to rely on faulty reasoning, which I’ll address directly now:
Myth 1: Governments shouldn’t allow multi-family housing because it is not desirable
Montanans traditionally value having a bit of elbow room, so it makes sense that single-family homes on large lots are highly desirable. But claims that multi-family housing is of no value to anyone is a fatal conceit.
In the old days, the rule was you lived within your means and bought a home that fits your budget. Fifty years ago, my grandpa moved his young family into a tiny two-bedroom home in Missoula he bought for $15,000. Not an ideal quality housing situation, but that’s what they could afford at the time. By sacrificing to purchase a home within his means, my grandpa saved money and later moved his family to a 10-acre lot in the Bitterroot Valley.
Housing regulations make it nearly impossible for young folks to follow this prudent path today. In the modern marketplace, it’s absurd to expect a young family with little savings to purchase a three-bedroom house on a large lot in the middle of the city. Yet, these are the only types of homes allowed in many high-demand areas.
Instead, we should reduce regulations and let developers build homes young families can afford, allowing families to save money and move on to bigger and better quality homes when it makes sense for their budget.
Myth 2: Without strict regulations, Montanans will be forced into dense housing and mass transit
This argument makes two critical errors. First, it conflates the reduction of government restrictions on multi-family housing as a mandate that everyone live in apartments. Eliminating regulations simply gives people the freedom to choose, it doesn’t force people into multi-family homes.
Second, this argument assumes that in the absence of government mandates no one would choose to live in a traditional single-family home with room for their car in the driveway. This speculation has no basis in current market dynamics. For those who can afford it, there is plenty of demand for single-family rural and suburban neighborhoods that offer a great quality of life.
Myth 3: Reducing regulations is not a viable strategy for addressing our housing crisis
The research consensus is clear that strict regulations discourage affordable housing by adding thousands to costs and stifling development. As opposed to other strategies, legalizing affordable housing requires zero taxpayer dollars to implement and has little downside economic risk. In fact, it would be an economic boon. Eliminating strict regulations on housing should be the starting point for governments when tackling our housing crisis.
This article originally appeared in Lee Newspapers