HELENA — City zoning laws that require builders to include some affordable homes in developments are now banned in Montana, under a bill signed Monday by Gov. Greg Gianforte.
House Bill 259, passed by the Legislature on largely party-line votes with Republicans in favor, prohibits cities from requiring housing developers to “provide housing for specified income levels or at specified prices.”
It wipes out “inclusionary zoning” in Bozeman and Whitefish, which had put the programs in place in 2018. Housing developers in each city have had to include a percentage of affordable homes in their projects, or, if they didn’t want to build smaller homes, make a cash payment or land donation.
The land and/or cash would be used by the city to develop affordable housing elsewhere.
Officials in both cities told MTN News Tuesday they’re greatly disappointed that lawmakers passed the bill and Gianforte signed it – but said they’ll continue to use other strategies to create affordable homes.
“That was one of the best tools we had, to address affordable housing,” said Whitefish City Manager Dana Smith. “It’s a huge problem, and not just in Whitefish, but in many parts of the state. … We have a lot of work ahead of us to see what we can do.”
The price of an average home in Whitefish is topping $500,000; in Bozeman, it has surpassed $600,000.
Bozeman City Manager Jeff Mihelich said inclusionary zoning had been one of the few programs successful in creating more affordable homes in the city, and “to say we’re disappointed … is an understatement.”
The city will continue to examine other affordable-housing policies, he added.
“Our goal, as it always has been, is to build a community where everyone can thrive,” Mihelich said.
Homebuilders in Bozeman, the Flathead Valley and elsewhere supported HB259, saying it unfairly placed the burden on developers for solving the housing crisis in high-priced cities, when many factors are at play, such as the skyrocketing price of lumber, skilled-labor shortages and a sometimes-slow subdivision-review processes.
Smith said Whitefish still has one subdivision and one conditional-unit permit approved under the prior zoning law, resulting in three affordable-housing units and a payment of $1.3 million. Those will proceed, she said.
Mihelich said the new law isn’t clear on how cities should handle development currently under review under inclusionary zoning.
Earlier this month, Mihelich told MTN News that the city had about 70 units of affordable housing under development, with the zoning program that has now been banned.