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A New Solution: Bozeman’s First Affordable Housing Director

by Hart Real Estate Solutions

Bozeman’s Affordable Housing Action Plan pinpointed several major strategies to implement over a 5-year timespan (2012-2016). Its purpose was to work on providing more affordable housing units and down payment assistance for both renters and homeowners alike. While this plan outlined several goals that were partially met by the end of 2016, affordable housing in Bozeman is still a significant issue that needs continued attention and work in the future.

In 2010, 28% of homeowners and 49% of renters in Bozeman were living in unaffordable housing, when using the widely accepted benchmark amount of <33% of total income for homeowners and <30% of total income for renters. It’s important to note, however, that there is no universal home price or rent benchmark that defines “affordable”— this varies by income level and should be based on ability to pay.

 By 2015, at least 4,000 of the city’s 8,400 renters were paying rents at or above the 30% threshold, while a third of homeowners were paying at least that much, if not more.

Is Something Being Done to Help?

With these statistics not having improved much in recent years, the City of Bozeman has decided to hire its first affordable housing director. The person who will fill this new position (expected to begin by the end of January) will be responsible for generating solutions to help reduce the gap between the cost of housing and how much many Bozeman residents can afford to pay.

Six months ago, Bozeman planning adopted a new rule that mandated that builders and developers would have to either sell 3 in 10 homes in new developments at $260,000 or less, OR 1 in 10 homes at $215,000 or less, subject to change based number of bedrooms per unit. The city has been trying to keep up with this rule, which is where the need for an affordable housing director stems from.

Additionally, the new director will help to track housing projects from the time a building permit is issued to the time that someone closes on their home, in order to ensure that this 6-month-old rule is followed from start to end.

As 2018 unfolds, it will be interesting to see how this new position begins to change the affordable housing market and what impacts it will have on many of Bozeman’s renters and homeowners who are currently above the income threshold for housing. 

Home Prices and Growth: What’s Going On?

by Hart Real Estate Solutions

What Does Growth Look Like Around the U.S.?

It comes as no surprise to many of us that owning a home can be an expensive venture. Factor in HOA fees, interior appliances/materials, miscellaneous maintenance costs and everything in between, and it’s easy to see why being a homeowner can appear to be daunting to some.

Although home prices grew 5.6% last year, this is only determined when comparing dollars to dollars. If this statistic is adjusted for inflation, this increase is still actually 15% below the high that occurred in 2006. Of the country’s 100 largest metro areas, only 41 grew to new peaks, even though 97 of these 100 metro areas did see overall home price growth. Overall, housing markets on both the West and East coasts have experienced inflation-adjusted home price increases of more than 40% in the last 16 years, while markets in the Midwest and South have generally experienced decreases.

However, growth has not been the same across all income levels. After Harvard researchers collected data for more than 9,000 ZIP codes across the country, most home prices in all income brackets were LOWER than their pre-2006 peaks. Here’s the breakdown:

  • Low-income areas: 13.7% lower
  • Moderate-income areas: 6.5% lower
  • High-income areas: 3.3% lower

Because of the post-recession change in home prices, many homeowners were able to emerge from underwater, a term indicating that the value of a home is below or under its mortgage amount. In 2011, the number of underwater homeowners topped out at 12.1 million; by the end of 2016, that number was down to 3.2 million.

                   

Source: PalmBeachPost.com

What About Growth in and Around Bozeman?

Bozeman remains one of the fastest growing small towns in the country, with a population growth rate of 4.6%. Home prices across the state currently exceed pre-2006 levels by 10%.

When comparing median sales prices between Bozeman, Belgrade and other Bozeman areas, home prices are still steadily on the rise in all 3 areas.

 

Median Sales Prices (2011-2017)

This data was pulled Big Sky Country MLS for 2017. While we attempt to provide reliable, useful information, we cannot guarantee that the information is accurate, current or suitable for any particular purpose. Estimates are subject to change without notice.

 

Although median sales prices are continually rising, the good news is that the median sale price is often lower than the median original asking price: 

This data was pulled Big Sky Country MLS for 2017. While we attempt to provide reliable, useful information, we cannot guarantee that the information is accurate, current or suitable for any particular purpose. Estimates are subject to change without notice.

 

As for the country as a whole, Freddie Mac predicts an overall home price increase of 4.9% in 2018. While that may seem like quite a jump, this prediction is still lower than the 6.3% growth we’ve seen so far this year.  Much like the prediction for 2017, 2018’s prediction also suggests continued economic growth of around 2%, steady job gains and relatively low mortgage rates. 


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The Annie and Oak Street Issues: Bozeman’s Second High School Faces New Challenges

by Hart Real Estate Solutions

While the overall design for Bozeman’s 2nd high school has been approved, the actual design drawings will be completed sometime this month, at which time the School Board will take its final vote on the design. Previously, we had learned that the design was modern and sleek, with elements of brickwork, black metal cladding and an all-glass entryway incorporated into the plans. Only small modifications to this design have been made by Building Committee members, which include using traditional red brickwork rather than the originally proposed grey, and using white instead of purple for the triangle outside the main entry.

The Annie Street Issue

City staff members are in favor of the school district building Annie Street east-west, which would cut through the middle of the property where the high school will be constructed. This expense is estimated at $800,000, and would require students to cross a city street in order to reach the playing fields. While the school conducted a traffic study and found that Annie isn’t a heavily used street, the city feels as though building this street is needed for the transportation system.

The Oak Street Issue

While the school had discussed using a portion of the budget to build a soccer field and parking lot on the north side of Oak (across the street from the new school), designers have other plans— building a pedestrian tunnel under Oak Street AND constructing an overpass over the tunnel.

The land north of Oak is city-owned, which means that the plans for a field and parking lot would be a collaborative project with the city’s plans to develop a sports complex. Creating both a tunnel and overpass, while great for ensuring pedestrian safety, present the challenge of meeting the budget.

The goal budget is between $76 million and $78 million, the current design is around $87 million, and once site work, streets and the possible tunnel are factored in, the entire project will cost $93 million.

Future Location of Second High School/Sports Complex

Only Time Will Tell

The Annie Street issue will be discussed as soon as next week, although we aren’t sure when we’ll find out whether the tunnel and overpass project will move forward. Revisiting the budget and cutting costs will likely need to happen before any major decisions are made. Sometime after the new year, however, we can expect to find out more about the new school’s colors, logo and mascot.


Related Articles:

Design Plans for Bozeman's 2nd High School in the Works

Belgrade Expands and Prepares for Future Growth

Long-Debated Black-Olive Project Gets Approved by City Commissioners

Long-Debated Black-Olive Project Gets Approved By City Commissioners

by Hart Real Estate Solutions

In September of 2016, the Black-Olive project was first presented to Bozeman City Commissioners as a 5-story building that would feature 56 apartments, as well as commercial business space on the ground floor and 37 on-site parking spaces. Many neighboring residents spoke out at both public meetings and on Facebook’s “Save Bozeman” page to express their concerns that the contemporary building would ruin Bozeman’s small-town charm and negatively impact street parking.

On April 11th of this year, this proposal was denied with a 4-1 vote, although it was stated that developer Andy Holloran intended to modify the design and resubmit his proposal for later review. Fast forward to last week— the Black-Olive development was APPROVED after more than a year of discussions, meetings and revised design plans, ironically with a 4-1 vote. The project will include demolition of the two-story building currently located at 202 S. Black Ave.

What Else?

The new design has been modified to feature 66 bedrooms within 47 apartments, while providing 40 parking spaces for those residents.  Although some commissioners and citizens were still against the project, stating that the building was too big and that parking constraints were already an issue, others disagreed. Commissioners I-Ho Pomeroy and Jeff Krauss support the idea of creating more housing opportunities downtown, which would include growth upward instead of outward.

What Now?

Although the project has been approved, Holloran will be required to make minor changes to the building’s top floor to scale back its elevation. After finishing the design to accommodate this amendment and obtaining both a building and demolition permit, Holloran expects to break ground sometime this spring. 

Future Location of Black-Olive Project

New Local Businesses Contribute to Bozeman’s Rapid Growth

by Hart Real Estate Solutions

Bozeman continues to grow, and we aren’t just talking about its population and endless road expansions all over town— new local businesses have been popping up all over town; Evergreen Clothing, Ekam Yoga, Stuffed Crepes and Waffles and Backcountry Burger Bar are just a few of the new businesses that have opened this year. But 2017 isn’t over yet— a new candy shop, new brewery and new diner are either slated to open their doors by year’s end, or have recently done so.

For Those With a Sweet Tooth…

Owner Kimberlee Greenough started Hush Salon in 2011 and has worked as a personal trainer for years, and is now pursuing a lifelong dream of owning her own candy shop. Set to open at the end of October, The Candy Jar will feature more than 500 types of chocolates, gummy candies and other classic candies, as well as a soda fountain and ice cream bar with Wilcoxsin’s and Montana-made syrups. The Candy Jar will be located near Wasabi on West Oak, and an open house on Halloween is currently in the works.

For Those Who Like Locally Crafted Beers…

If candy isn’t your thing, and craft beers are, you’re in luck. Mountains Walking Brewery and Pub opened in late September. Owner Gustav Dose grew up in both Taiwan and Japan, and has studied brewing around the world. His goal with this brewery was to make beers that can’t be made anywhere but Bozeman, taking into account factors such as our climate, altitude and native yeasts. The tap list changes daily, and will still feature familiar favorites in addition to rare finds. Mountains Walking is located on Plum Street on the east end of town.

For Those Who Appreciate Locally Grown Foods…

Opened in September by husband and wife duo Charley Graham and Lauren Reich, Little Star Diner has a menu that changes frequently, as most of the restaurant’s produce is grown by Reich. Depending on the time of year, and with Montana’s short growing season, you may find yourself faced with new menu options based on what’s available at that time. Reich has been growing produce for restaurants since 2009 and Graham was most recently a chef at Blackbird Kitchen. The couple is confident that by combining their culinary experience with the farm-to-table concept, Little Star Diner will soon become a local favorite in town. 

 

New Local Businesses in Bozeman​

Design Plans for Bozeman’s 2nd High School in the Works

by Hart Real Estate Solutions

We already know that Bozeman is quickly growing, and it comes as no surprise to anyone in the area that the high school is becoming overcrowded— just last year nearly 2,000 students were enrolled. With a capacity of 2,400 and a predicted enrollment of 2,700 by 2023, it only makes sense that plans for a 2nd high school are currently underway.

Back in February of 2016, several different scenarios for how to solve this problem were presented, a few of which included ideas for staying on Main Street by expanding the current building. However, it has been decided that the best course of action is to construct a 2nd high school, currently planned to be built on a 57-acre plot bordered by Durston & Cottonwood roads, Flanders Mill and West Oak Street.

What Else?

The latest cost estimate for this project is around $83 million, though it is expected to shrink since it is still in the design phase. The entire budget for the school is targeted at $94 million, with more than $10 million going toward equipment, fixtures and furniture. Some of these costs will also be used to renovate the existing high school to keep up with its rapid growth. CTA Architects Engineers, the firm working on developing the new school, will present its final design plan to the Bozeman School Board this December.

The design that was shown last week is modern and sleek, with some brickwork on the three-story classroom building to channel historic Main Street. Extensive black metal cladding, a wedge-shaped roof, all-glass entry and a two-story, stair-like tiered seating structure are all also currently included in the design plans, though these features are subject to change.

Current Design For 2nd High School

Source: CTA Architects Engineers

It’s Green, Too?

The school will also be constructed to environmental standards specifically tailored to schools instead of LEED building standards, which is the most widely used green building system in the world. Though using CHPS (Collaborative for High Performance Schools standard) will run about $10,000 less than LEED, the school chose these standards because it has many of the same features and is more geared toward K-12 schools.

The design report  that was approved by the school board earlier this month contains a CHPS checklist (pages 25 and 118), which demonstrates how the new school will aim to earn 125 environmental points. Many of these points will be earned for its energy efficiency, acoustics, water use regulation and heating system, in addition to sharing the building with other community groups after school.

Pros and Cons

Though we aren’t sure yet when construction will begin, the new school would create more opportunities for students to join sports teams and enroll in special classes like AP and foreign languages.  On the other hand, additional costs for building upkeep, hiring staff and another principal, and funding for double the number of sports teams is generating concerns from both parents and the School Board. Though there are still many details to be worked out over the coming years, one thing is for certain— Bozeman is still rapidly growing, and addressing the soon-to-be overcrowded high school now rather than down the road seems to be the best course of action.


Related Articles: 

Belgrade Expands and Prepares For Future Growth

Bozeman Continues to Grow With New Proposed Airport Expansion

Bozeman Ranks Second as the Fastest Growing Small Town in America

New Short-Term Rental Rules Adopted in Bozeman City Limits

by Hart Real Estate Solutions

Bozeman City Commissioners adopted an ordinance on September 11th that includes new rules and regulations for the estimated 500-550 short-term rentals in Bozeman through platforms including Airbnb, VRBO and Homeaway. A short-term rental (STR) is defined as the rental of rooms or dwellings to paying guests anywhere from 1 to 29 days.

What’s the Gist?

This ordinance was adopted with a 3-2 vote by city commissioners—commissioners also passed the new fees that homeowners will pay in order to continue using their property as an STR. There is now an annual $250 registration fee, in addition to a one-time fire inspection fee of $225. In addition, some homeowners may find themselves paying an administrative conditional use permit of $1,508. Commissioner Chris Mehl states that there may be adjustments to these fees in the future, as the city commissioners will have the chance to look at and assess the fees every year.

What Else?

The new fees will be used to balance the program’s cost— they will cover resources needed to process applications, respond to complaints, monitor regulations and inspect rentals. Many older homes that are being used as short-term rentals do not have the same fire-safety features that newer homes have.

While some are concerned that the new mandatory fees will have a negative impact on homeowners who use their properties as short-term rentals in order to generate additional income, Mayor Carson Taylor supports the fee increases because they are important to overall public safety.

Additionally, the new ordinance will forbid STRs that aren’t owner-occupied at any time within Bozeman’s residential districts. In this case, owner-occupied indicates that the owner occupies the dwelling for more than 50% of the calendar year. People who have been operating in these areas prior to January 1st will have the option to be grandfathered in.

When Does This All Start?

These rules will go into effect starting December 1st, and once the ordinance is passed (30 days from September 11th), homeowners will be given a 60-day grace period to meet compliance.

What makes Bozeman both unique and a desirable place to live all comes down to quality—quality of the community, quality of housing and ultimately the quality of the people who live and work here. The intended purpose of this ordinance, while seen as frustrating and expensive to some homeowners, may help contribute to the quality of life that is so valued here in Bozeman, and continue to make living and visiting here so enjoyable.

Bozeman Continues To Grow With New Proposed Airport Expansion

by Hart Real Estate Solutions

It comes as no surprise to most of us that Bozeman is quickly growing, in terms of both population and city development. In the past seven years alone, we’ve grown from 37,000 residents to more than 45,000. Last year was a record year for the Bozeman Yellowstone International Airport, which is located in Belgrade and is the busiest airport in the state— there was an 8.4% increase in the number of travelers in and out of Bozeman, and 29% of all air travelers in and out of Montana fly through the Bozeman airport.

To better accommodate those flying in and out of Bozeman, plans to develop more than 50 acres of land south of the airport have been submitted. These plans include a mixed-use complex that will hold hotels, retail stores and restaurants. A Connecticut-based developer, Charter Realty & Development, is currently in negotiations to purchase the property from its current owner Knife River, a construction materials company headquartered in Bismarck, ND. 

With both the number of new listings and pending sales increasing in Belgrade, this development may also be beneficial to Belgrade residents and those looking to relocate to the area.

While the median sales price for Belgrade sat at $279,900 last month, this is still lower than that of Bozeman, with its median sales price hovering around $369K. Dan Zelson, a principal with Charter Realty, states that with growth coming out of Bozeman and into Belgrade, long-term plans may include residential buildings. While this isn’t part of the current proposal, this development could take place as soon as next year, with its first tenants moving in by 2019.

The plan will be presented to the Belgrade City Council on September 18th. Whether or not lower median sales prices are encouraging some Bozeman residents to relocate to Belgrade, the area is indeed expanding and will likely continue to do so with such a busy airport nearby that continues to set new passenger records every year, as well as with the high population growth rates we’ve been experiencing in recent years. 


Related Articles: 

Black-Olive Proposal Denied by Bozeman City Commissioners

Bozeman's 4th Mid-Rise Building Proposed to Replace and Old Grain Mill

Bozeman Ranks Second as the Fastest Growing Small Town in America

Record-breaking Research at MSU in 2017

by Hart Real Estate Solutions

Montana State University, the largest in the state with a whopping 16,440 students enrolled last fall, has set a record of $130.8 million in contract expenditures and research for the fiscal year that ended in June 2017. This impressive number is up $12 million from last year.

Researchers from the university pursued grant funding in the fiscal year 2017 more heavily than they have in the past. Here are the stats:

Fiscal Year 2017

Grant applications: 1,729 (>100 from fiscal year 2016)

New grant awards: 562

Total worth: $75.5 million (>8% more than fiscal year 2016)

What Does It Take to Get a Grant?

The commitment to academic research at MSU is apparent by the number of submitted proposals, especially because the entire process is anything but easy. It all begins with an idea, and from there a cycle of writing, budget development and research question generation follows.

​​​

Both students and scientists that received these grants study in fields that include biochemistry, health, physics and the environment. The College of Letters and Science was credited $22.2 million, the College of Agriculture was credited $19.4 million and the College of Engineering received $17 million. The remainder was divided amongst a wide variety of projects, some of which included research on sustainable biofuels, health disparities in tribal communities and immunology and infectious diseases.

Although Fall 2017 enrollment numbers will be unavailable for several more weeks, it’s safe to say that the university is expecting to break last year’s record. With MSU continually breaking its record for enrolled students, it isn’t outlandish to predict that with more students comes more opportunity for larger grant award numbers in years to come. 


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Big Sky Is Booming: But What About Affordable Housing?

by Hart Real Estate Solutions

Big Sky Resort is the third largest ski resort in America and attracts 500,000 skiers annually. After announcing a deal with CrossHarbor Capital Partners to merge Moonlight Basin into Big Sky Resort in 2013, the resort now boasts an impressive 5,800 acres of public skiing, with an additional 2,200 acres available to Yellowstone Club members, yet still remains fairly undiscovered. Although a whopping one million cars drive past Big Sky every year, most of that traffic is Yellowstone National Park bound.

The Housing Issue

Between now and 2025, the resort plans on spending $150 million on improvements. The community of Big Sky currently has a population of 2,500 and in recent years has added numerous shops and restaurants, in addition to a movie theater and a full-service grocery store in 2014. The following year, Big Sky Medical Center started offering emergency services and inpatient care.

Although the community is steadily growing and the resort itself has expanded, there is one issue that still raises concern— most of Big Sky’s workforce commutes to work due to the lack of affordable housing available to employees. Recent data shows that Big Sky is short between 900 and 1,200 units, and that roughly 83% of the entire workforce leaves at the end of the day to begin their commute back to Bozeman and other surrounding areas. (image credit: explorebigsky.com)

Is There a Plan?

David Fowler is an architect who has been working on this issue since 2013. He states that the most important thing to do in order to begin solving this problem and creating more affordable housing is the establishment of an organization to begin accepting donations in order to offset land costs. There is a plan in the works that includes the construction of an 18-condo development on a 4.14-acre parcel known as Sweetgrass Hills in the Town Center, but critics argue that 18 condos don’t count for much when the housing shortage is as high as it is.

Additionally, Lone Mountain Land Company (LMLC) is developing two properties in the Town Center that will be targeted for Yellowstone Club, Moonlight and Spanish Peaks employees. One building will contain 16 units (completion estimated at approximately one year) and the other will hold 32 units. Both buildings will likely be rental properties.

While these plans may not begin to take place in the immediate future, the resort plans on moving forward with its $150 million improvements. Last year two new high-speed chairlifts were added to the mountain, one of which has heated seats and plexiglass bubbles to shield passengers from the elements. A number of new restaurants are expected to be opening soon as well. Overall, Stephen Kircher (president of Boyne Resorts’ operations, of which Big Sky Resort is a part) says that both of these projects are early steps in a 10-year plan to add a European experience to the resort. The addition of more real estate and improved services in the Town Center will help his vision become a reality, though it may be several years down the road before we see any significant changes to the area. 

 

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