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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.

Mid-Rise Buildings to Doom Bozeman's Small-Town Charm?

by Hart Real Estate Solutions

 

There has been rising controversy in downtown Bozeman over development plans for mid-rise buildings in the heart of the city. City commissioners will soon make the decision whether to approve developer Andy Holloran’s proposal for his Black-Olive project, which will transform the south-east corner of Black and Olive Avenue into a three-story building with 56 apartments. 

Black-Olive Project(3-story building on black-olive avenue as of December 28, 2016 that the new apartment building is planned to replace.)

With the Element Hotel now built, the 5-West building already standing, and the Clark Hotel’s expansion underway, downtown residents are concerned that the Black Olive proposal is the breaking point that ushers “the final doom of Bozeman’s small-town charm.” Most members of the “Save Bozeman” effort are not entirely against development, but what they want is “balanced growth that benefits everybody, and not just developers.”


 

5 West Downtown Development

(5 West Project on Mendenhall Street under construction as of December 28, 2016.)

Several concerned residents have responded with the “Save Bozeman” effort. They made a Facebook page to coordinate their efforts and inform other residents about issues facing the community, and you might have noticed their yellow yard signs popping up around downtown neighborhoods. Stewart Mitchell, one of several coordinators behind the “Save Bozeman” effort, says their goal is to draw more members of the community into the city’s planning process.

What About The Housing Shortage?


To counter the opposition, there are some benefits of denser developments that may make the case for the Black Olive project. People want our Bozeman lifestyle, which can be credited for much of the county’s explosive growth in recent years. Unfortunately, with rising demand, comes rising prices. Housing inventory is being stripped away, and prices are climbing at such a rate that it may finally slow our city’s growth.

Having these apartment buildings spring up downtown may help to address our current housing shortage issue. More apartments will loosen up the market for renters, and keep prices within a reasonable reach. Even luxury, higher-end apartments may improve housing affordability. When luxury options are limited, wealthier renters may have to settle for mid-market options, and outbid lower-income residents who can’t compete. By meeting the demand for high-end housing, affordable housing would be left alone and made available for families who truly need them.

Another proposition to be made is that denser development may help preserve Montana’s countryside. Even if we build a financial wall around Bozeman, development would likely spread to outlying areas, encroaching further into the untouched territory that we value about Montana. “Building” up may be the alternative to “building out” with residential neighborhoods, like we’re seeing in the development of Bozeman’s west side.

State Your Opinion


There are many arguments to made on either side of this issue. Mid-rise developments will transform the city’s core, and may alter the course of the city going forward. The community deserves a fair debate over this matter. For those that are concerned and want to be more involved with the community, be sure to attend the city’s Community Forums held at the City Hall to state your opinions.


Related Article:

Development Projects In Downtown Bozeman


Source:

Saving Bozeman: There’s a generational divide on development in the heart of the city

Bozeman Bans Vacation Rentals

by Hart Real Estate Solutions

 

There has been some controversy among Bozeman’s downtown residents this year over the matter of allowing vacation rentals in Bozeman’s historic neighborhoods. Residents are concerned with losing our “community character,” noise disturbances, and increased traffic from the number of vacation rentals being established in their neighborhood.

On August 8th, city commissioners voted to temporarily ban new permits for short-term rentals in most neighborhoods south of downtown. The city is now working on long-term regulations, taking considerations from public listening sessions, scheduled on the evenings of this coming January, and an online survey.

A number of public meetings have been set up for early 2017 to allow the citizens a voice.

According to Eric Dietrich, a Bozeman Chronicle Staff Writer, a number of listings for short-term rentals on websites like Airbnb and HomeAway have already been avoiding regulations and operating without permits in Bozeman. This is a problem that commissioners will have to address in their upcoming long-term regulations. 

This ban of short-term rental permits was originally set to last six months, expiring February 8th, with intentions to observe its effects and allow time to develop other solutions. However, Chuck Winn, the Assistant City Manager, requests to extend the period to study “best practices” from other cities’ experiences, and consider the public’s input. 

Sources:

Bozeman gearing up outreach efforts on possible vacation rental regulation—by Eric Dietrich

http://www.bozeman.net/STR

Affordable Condos Coming To Bozeman

by Hart Real Estate Solutions

As housing prices are on the rise, affordable housing in Bozeman is running scarce. Lower class families and individuals are being pushed further out of city limits as these housing options become limited. Countering this issue, the Talbach House project is providing Bozeman with a three-story condo building in a great location of a quickly developing area of the city.

The most appealing aspect of these condos is that their affordable price would not be sacrificing quality. Bitnar Architects have designed these condos with a high-end interior and European-inspired elements, such as large windows. One bedroom units will hold 625-square-feet, starting at $172,000.

Other condos of the same size are priced between $285,000 and $800,000, and the median price of single-family homes in Bozeman last year was $337,000. In this comparison, this Talbach House project is looking like a great deal for affordable housing.

The goal of this building project, stated by the developer of Cadius Partners, is to satisfy the needs of affordable housing for the “growing population of younger people” who are not yet committed to settle down and get married, before moving in to a single-family home.

Being the neighbor of the new Oracle campus, another opportunity is evident to house its growing staff. These condos would be a convenient option for the company’s employees. There are few chances in one’s career to have a walking commute.

Bozeman High School Students Earn 1.7 Million in College Scholarships

by Hart Real Estate Solutions

 

After tracking scholarship winnings for the first time in Bozeman High School’s history, the College and Career center announced that BHS students received more than 1.7 million dollars in scholarships for college. These scholarships were application based awards, requiring hard work and consistent support from both the students and the center.

Bozeman High School’s education is considered the best in the state. But perhaps its the programs and community that encompass more than just class taking that make the high school unique. The College and Career Center is one of the auxiliary programs that seem to direct BHS students in a positive direction.

The scholarship totals only represented high schoolers who had reported their scholarship to the center, so more money may have been awarded. This year, the College and Career center worked in depth with around 60 of the 415 students (going to the center is voluntary and must be student led). A majority of the 1.7 million in scholarships came from these students. One student went in almost every day and ultimately walked away with $27,000 in scholarships.

The center is open every day at Bozeman High School from 8 am to 4 pm. Having an additional support/educational program like this in the school will get more students into college and at a better rate.

Bozeman High School continues to work hard on surrounding the school with great programs to help students excel and to keep students from falling behind. Last year, Bozeman won an award to improve its mental health programs while also taking part in a competitive study for teaching mathematics in schools.

Bozeman’s enrollment continues to increase because of its consistent excellence. It’s hard for a home buyer to NOT move to Bozeman when they start a family. The City of Bozeman just announced plans to move forward with a second high school to better address growth, allowing for the city to grow while keeping a great education system moving forward.

 

Source: http://www.bozemandailychronicle.com/news/education/bozeman-high-seniors-earn-million-in-college-scholarships/article_a0a3da58-7edd-5dc3-879a-978a2e9fee18.html

Cheaper For Sale/For Rent Properties To Improve Affordability in Bozeman

by Hart Real Estate Solutions

Over the past few months, the City of Bozeman and local builders alike have worked hard to continue making homes more affordable in Bozeman.

For Rent

Bozeman has partnered with developers GMD Development from Seattle and Homeward out of Missoula. Together, they are building a 136 unit for rent, affordable apartment complex. Bozeman helped fund $200,000 for the project using the workforce housing levy.

The complex will be made for residents who earn 60% or less of Bozeman’s median income. Rents will range from $560 to $940 a month. The units will be subject to a rental control clause that will keep rents at the same or very near to the rates seen today. The clause will be in effect for 46 years.

According to Bozeman’s local HRDC, rental or mortgage costs should only take up 30 to 40 percent of a person’s income. In Bozeman, most residents pay around 50% of their income to rent or mortgage payments.

For Sale

Four new properties have been approved on Cottonwood Road for sale to lower income residents. The new homes will be approximately 840 square feet and cost about $200,000.

Bozeman passed new home affordability ordinances in November 2015 to incentivize builders in Bozeman to construct more affordable homes. The city has required that 14 affordable homes are built by September 2016, that 27 are built by July 2017 and that 54 are built by December 2017. If not, the city will enforce mandatory inclusionary zoning ordinances to make homes more affordable.

This project would contribute 4 new homes to that number. The city would prefer to continue offering incentives and relaxed codes to build affordable homes, rather than force another rule on the building industry. Normally, the city requires homes be built on lots of at least 5,000 square feet. Under this program, builders can lower lot sizes to 4,500 square feet. Bozeman also expedites affordable homes through the building permit process, saving developers who make affordable homes time and money.

The median price for a single family home in the Gallatin County was $330,000 in 2015.  If a person wanted to only have 30% of their income go to their mortgage payment, they would need to make around $70,000 a year.

 

Sources: http://www.kbzk.com/story/30861473/affordable-housing-options-in-bozeman-to-expand-with-new-development

http://www.abcfoxmontana.com/story/30858148/bozeman-set-for-136-new-affordable-housing-units

http://www.nbcmontana.com/news/Construction-begins-on-affordable-homes-in-Bozeman/37972184

http://www.bozemandailychronicle.com/news/city/first-houses-approved-under-new-bozeman-affordabilty-plan/article_6070f54e-b9fe-5c76-8c50-ddcbc58fab81.html

Bozeman Commission Passes Inclusionary Zoning Plan

by Hart Real Estate Solutions

After nearly a year of discussion and research from residents, consultants and builders alike, and after a voted delay in September, the Bozeman City Commission decided to move forward with a two-stage plan to help lower home values in Bozeman.  The plan, ideally, will help Bozemanites with modest means better afford to buy homes within the city limits.

Although the areas surrounding Bozeman have more reasonable home and rent values and although Bozeman’s cost of living is not outrageously above national averages, the city made it clear, by their decision, that they want Bozeman itself to remain a diverse and affordable place to live. Opponents to the plan did not want to hamper down a recently recovered housing market. Builders, who require on average 22 subcontractors to build a home, also felt the plan put too much financial risk on their shoulders.

The proposal has two phases to try to get builders and developers to start building affordable homes—one voluntary and one mandatory. The mandatory phase would only come into use should the voluntary phase not produce 54 affordable homes within the next two years.  Only the mandatory phase includes plans for inclusionary zoning – the most controversial aspect of the new ordinance.

The voluntary phase, as mentioned, requires that at least 54 affordable homes be built in 2 years within Bozeman city limits. During the voluntary phase, the city would try to entice builders to add affordable homes into their existing plans by including incentives like reduced lot size requirements, relaxed parking standards, expedited plan review and impact fee subsidies, incentives the city already may have added anyways. The voluntary phase also requires that at least 14 affordable homes are built by September 2016, otherwise, it would revert to the mandatory phase after only one year.

If the voluntary phase fails, then the city would move to a mandatory inclusionary zoning ordinance. In this phase, subdivisions would be required to either make 1 out of ever 10 units affordable to Bozeman residents making 80% of Bozeman’s median income or to make 3 out of every 10 affordable to residents making the median income.

Please read Eric Dietrich’s great follow up article going into the nitty gritty details of the new zoning ordinance here.

The new plan should help lower home values in Bozeman, helping free up more buyers in Bozeman’s housing market. How it will affect sellers and builders is yet to be determined. Rental values might also be impacted. High rents have been keeping investment properties in Bozeman at very high values. With additional homes on the market, both rental values and investment property values may decrease, helping keep renters in home while also helping them jump into homeownership.

 

Source: http://www.nbcmontana.com/news/Bozeman-City-Commission-passes-inclusionary-housing-ordinance/36512554

http://www.bozemandailychronicle.com/blogs/city/questions-and-some-answers-about-bozeman-s-new-housing-plan/article_be2e9b16-b1e8-5ce7-8f34-982e270cd21e.html

http://www.bozemandailychronicle.com/news/city/split-city-commission-passes-housing-plan/article_7080761a-5287-59dc-a4fd-7f73a12e3f7e.html

 

 

What Is It About Montana's Economy?

by Tim Hart

Bozeman values are grounded in well, the ground. Environment, agriculture, mining, and logging have all been on the forefront of Montanan economy, but recently, things are shifting.  It’s moving from the thought of land as a thing from which riches are taken to one where riches are brought because of the land and its opportunities, according to a report by Bozeman-based nonprofit research firm Headwaters Economics.

There is an urge to see land as an economic asset. With this trend comes new data that links Montana’s economic viability to the diversification of employment that pivots around the LAND. The ability to rely on our land has led to Montana outpacing the nation in employment and personal income and income per person growth.  

Services such as health care, real estate, government/professional, and scientific/technical services are all interlinked to the health of the land.

“Talking about Montana as an unspoiled place with spectacular natural amenities is our ace in the hole, economically. It’s how we’re attracting the diversity we’ve been able to attract,” Ray Rasker, executive director of the Headwaters Economics non-profit research firm, said.

Jason Bacaj may be reached at jasonb@dailychronicle.com or 582-2635

 

Rentals In Bozeman, MT

by Tim Hart

Bozeman Montana Rental Study (Part 2 of 2)

Housing has been recognized as Bozeman’s top priority and more specifically—rentals. City Commissioners suspended an ordinance that requires developers to price a portion of new homes or condos under $200,000 when the economy crashed. Peter Werwath, principal of Werwath Associated who was hired to analyze Bozeman Housing Needs reports “…the city should consider including elements in its pending affordable housing plan that encourage construction of rental units, with a particular emphasis on production of rental units affordable to households between 30 percent of area median income and 50 percent of area median income.” (median income is $66,700 for a family of four)

It will be interesting to see where the housing market here in Bozeman will go….

Selected Income and Housing Indicators for Bozeman and Other Areas, 2010 

Source: U.S. Census Bureau. 2008-2010 American Community Survey, Werwath and Associates Survey

 

Measure                                         Bozeman   Gallatin County      Billings        Missoula    Montana     United States
Median Rent 746            799                    688            691        639               850     
Rental Vacancy Rate 1.8         6.0             8.1          
For-sale Housing Vacancy Rate 4.3            2.7      0.3     0.8    1.8             2.5  

To read full article: http://www.bozemandailychronicle.com/news/city/article_8347be3c-4a3f-11e1-8bac-001871e3ce6c.html

 

 

Real Estate In Bozeman, MT

by Tim Hart

Bozeman Montana Rental Study (Part 1 of 2)

Dab Dabney, real estate expert of 30 years, has never seen a town with fewer available options for renters than in Bozeman currently. Of 796 reviewed rentals, 15 were open for renting. The lack of supply and high demand is ratcheting prices up. Dabney predicts that rent will see an increase of 5-8%. “You’re going to have a lot of people looking at increasing home costs and flat incomes,” he said. “They’re going to get squeezed.”

What makes Bozeman a story unto itself regarding rentals is the amount of transitory people who call Bozeman home for over half of the time due to Montana State University, one of Montana’s two largest campuses. Bozeman’s need for affordable housing for students and families alike is extremely acute. 49% of renters in Bozeman pay more than 30% of their income to their rent.

At MSU, “the rate of growth over the past 10 years has been around 200 students a year, with no new student housing being constructed in recent years,” the study says. “Assuming three people per dwelling unit, the growth rate would indicate about 60 new households a year living off campus.”

To read full article: http://www.bozemandailychronicle.com/news/city/article_8347be3c-4a3f-11e1-8bac-001871e3ce6c.html

 

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