Bozeman’s Affordable Housing Ordinance and the Guthrie
The affordable housing ordinance that guides our city is about one year old. It was created to remediate the legislature’s 2021 law that prohibits cities in Montana from using inclusionary zoning. If you haven’t been nerding out on Bozeman’s zoning codes for the last few months, inclusionary zoning is a type of ordinance that requires developers to include a certain percentage of “affordable” or below market-rate units in each new development. Many cities across the country use such ordinances to generate affordable housing. Greg Gianforte, our Governor, removed this tool, making it no longer available to Montana cities.
What is Affordable Housing?
Housing affordability is generally based on Area Median Income (AMI), a term used in the housing industry. When stated with a percentage, such as 80% of AMI, this refers to income limits, which are established annually by the US Department of Housing and Urban Development for all counties in the United States. For 2023 the 80% income limit for a 2-person family for Gallatin County is $67,350 (1).
A household is generally considered cost burdened if they spend more than 30% of their income on housing. Using the income level above, this means that a 2-person family would be able to spend about $1,684 per month on rent.
Bozeman’s New Affordable Housing Ordinance
The City of Bozeman hired consultants to help figure out how to alter the City’s building codes, using incentives or trades to create some affordable housing. According to the consultants, the incentives that are the most effective in bringing affordable housing options to the developer’s tables were: reduced parking requirements, additional building heights, and smaller lot sizes. The consultants made predictions about the number of affordable units that could be obtained with certain incentives, based on different types of housing. These predictions are summarized in the following table:
The Bozeman City Commission adopted a new affordable housing ordinance (2) on September 27, 2022. This new ordinance includes two incentive packages. The first is the Shallow Incentives package, based on the consultant’s recommendations above, and requires 5% of the units created to be affordable for rent at 80% AMI or sale at 120% AMI.
The second Deep Incentives package requires 50% of affordable units at the same AMI’s. It was designed by City staff to work in conjunction with other low income tax credit subsidies. Unlike the shallow incentives it doesn’t require any parking. After much discussion the Community Development Board voted down passing the ordinance 5 to 1, with most agreeing that it needed more community input, and concerns that our city doesn’t have the public transit infrastructure to compensate for zero parking requirements.
In spite of the rejection of the ordinance by the Community Development Board, the ordinance was brought to the City Commission where it passed 6-0. The Commission’s concern was that there would be no affordable housing created by the city without this ordinance, and the possible negative impacts were a worthwhile trade if we got even a little bit of affordable housing, since the legislature took away our other tools. We can’t implement a luxury or second home tax, or even a sales tax, that could be used to subsidize housing.
The Guthrie
At this moment, the first development proposing to use the deep incentives package is being reviewed by the City. The Guthrie would be a 111 unit, 5 story apartment building, proposed for construction at Villard and North 5thAvenue. All of the units would be studios or 1 bedroom rentals. The square footage of the units would vary between 375 and 600 square feet. The Guthrie would offer 50% of the units as affordable housing to those earning 80% AMI, based on two people per unit, which comes out to $1,684 a month. There would also be 30 parking places available at additional cost.
Homebase Partners, the company proposing this apartment building, has stated they hope to rent to their employees since there is a lack of workforce housing in Bozeman. Additionally, there would be some affordable units for the community. Some of the amenities offered by the Guthrie would include en suite bathrooms, movable partitions to create the feeling of two rooms, Murphy beds, and hot plates. Each floor would have a laundry room that counts as common space because they include either a TV, games, or work desks.
Is the Guthrie Right for Bozeman?
Bozeman’s affordable housing ordinance uses the word Home with pride. Unfortunately, a sense of pride would be hard to maintain in the undignified housing that Homebase has proposed and deems good enough for its workers and anyone else who can’t afford more than The Company Store.
Certainly, Bozeman needs affordable housing. Certainly, Bozeman needs workforce housing. But is Villard and 5th the right place to build it? How much demand is there for dormitory style housing? Do we want more than 100 new vehicles looking for street parking in the already congested Mid Town neighborhood?
References
1. Median Family Income (MFI) and income limits can be found using the query tool found at this web address: https://www.huduser.gov/Portal/datasets/il.html#query_2023
2. https://mcclibraryweb.azurewebsites.us/mt/bozeman/ordinances/code_of_ordinances?nodeId=1181518