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Downtown Continues to Grow: The 5 East Project

by Hart Real Estate Solutions

Do you remember the Black-Olive proposal that originated in 2016 and was later approved in the fall of 2017? How about the One 11 Lofts that were proposed just this year? The developer behind both of these projects, Andy Holloran, has proposed another mid-rise building for the downtown area.

Called 5 East, the proposed six-story, mixed-use building will include 30 condos with space on both the second and third floors for retail and office space. The current proposal for 5 East also includes 29 parking spaces on the ground level, with a mix of studio, one-bedroom, and two-bedroom condos on the top four floors, all ranging from 790 to 1,500 square feet. Located on the corner of Mendenhall and Tracy, the build site currently houses the Straightaway Motors auto shop and several homes, which would be demolished per an agreement with the landowner.

While many downtown residents are still concerned that contemporary buildings will negatively impact Bozeman’s small-town charm and compromise its historic integrity, Holloran states that in order to preserve our open land and agricultural space, we need to further develop our urban core, which includes “building up” instead of “building out”. As it currently is, the proposal includes in the northwest portion of 5 East scaled down to three stories “in order to respect the lower-density housing to the north and provide open space and outdoor amenities for residents”. These amenities include landscaped outdoor terraces, restaurants, and a spa.

5 East is currently set for review by the city planning department. If the plan is approved, construction could begin as early as the beginning of 2019.

 

Current Mid-Rise Development Projects/Proposals

On the Rise: Condos and Townhomes

by Hart Real Estate Solutions

If you drive past any part of Bozeman, you’ll more than likely find some sort of new housing development under construction. What may be surprising for some though is how many of these new developments are actually condos and townhomes, as opposed to traditional single-family detached homes. With both mortgage rates and gas prices having risen recently, some buyers (especially younger, prospective buyers) may feel a bit uncertain about what they’re able to afford. Luckily, condos and townhouses may be more attainable than they think.

Nationally, new townhouses account for 12.3% of all single-family housing starts according to the National Association of Home Builders (NAHB). Over the past 5 years, the number of new construction condos and townhomes for sale in Bozeman has fluctuated quite a bit, with the most recent dip in activity having taken place in March of 2017. Since then, the number of condos and townhomes for sale has been on the rise. In Belgrade, there has also been some fluctuation during this same time period, with new condos and townhomes for sale having also been on the rise since March of 2017, though not nearly as rapidly as Bozeman.

 

Condos and Townhouses for Sale in Bozeman & Belgrade, Jan. 2013 - Present

            

This data was pulled from the Big Sky Country MLS for 2018. 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.

Similarly, the median sales price for condos and townhomes has also risen in recent years. As of April 2018, the median sales price for both condos and townhomes was $289,900, while in Belgrade this median sales price was $267,400. (Disclaimer: either of these numbers could be skewed toward the higher end of the spectrum by a higher-end listing on the market.) While this may still seem high to many, the median sales price of a single-family home in April 2018 was $396,250, while in Belgrade this median sales price was $310,000. (Again, either of these numbers could be skewed toward the higher end of the spectrum by a higher-end listing on the market.)  Based on these stats, choosing to purchase a condo or townhouse in Bozeman (as opposed to a single-family home) could save you up to $106,350, while choosing to purchase a condo or townhouse in Belgrade (as opposed to a single-family home) could save you up to $42,600.

Number of Condo/Townhouse Sales 2014 - Present

Robert Dietz, Chief Economist for NAHB, states that “future gains in the share as townhouses are a useful bridge from rentership to homeownership for younger prospective buyers in high cost markets…”. This is good news for millennials, as they represented 34% of all homebuyers across other generations in 2017. With condo and townhouse construction on the rise, we can continue to expect an increase in closed sales for these types of homes as we move further along into 2018, and even into 2019.

 

New Boutique Hotel Pays Tribute to Bozeman Architect Fred Willson

by Hart Real Estate Solutions

The Bozeman we all know and love today would look much different without the influence and design of Bozeman-born architect Frederick Willson.

After spending time in Paris following his graduation from Columbia University, Willson brought the influence of multiple architectural styles back to Bozeman with him, including Mission Revival and Art Deco. Over the next 46 years, he designed hundreds of well-known buildings in Bozeman and other Montana cities, including the Ellen Theatre, the Baxter Hotel, the Emerson Cultural Center, and both MSU’s original Student Union Building and Hamilton Hall. Although Willson died in 1956, his work can still be seen around Bozeman, West Yellowstone and Three Forks today.

Fast forward to 2018— the old National Guard armory building on the corner of Mendenhall and Willson will soon be transformed into the Etha Hotel, an eight-story boutique hotel with 122 rooms and a pool. Bozeman-based Venue Architects have plans to convert the concrete structure into a 17,000 square foot space, which will have enough room for an event area and an American bistro on the ground floor, and a bar or restaurant on the building’s rooftop.

The hotel will retain 98% of the original armory building, which was designed by Willson and constructed in 1941. The new building’s Art Deco style will imitate that of Willson’s previous designs, as elements such as doors and awnings have been taken from sketches of Willson’s that were never included in the armory’s original design. The entire project is expected to be completed by the end of 2019.

The Downtown Improvement Plan: Past, Present, & Future

by Hart Real Estate Solutions

Over the last 30 years, various recommendations have been developed to improve downtown Bozeman, including everything from construction of more mixed-use buildings, to decreased parking requirements, to more affordable housing units. While some of these ideas have come to fruition in recent years, others are still on the table discussion. The most recent improvement plan states that all recommendations in the plan are both realistic and attainable, but because some require more analysis than others, they are either partially completed or haven’t been started yet.

While only a small portion of the recommendations presented in the original plan aren’t listed below, a list of ALL of the recommendations can be viewed here.

A few notable recommendations from this plan, which was released in 2009, include the following:

  • Addition of a downtown conference center
  • Construction of a “boutique” hotel
  • Addition of plazas and courtyards
  • Conversion of Babcock and Mendenhall to 2-way streets
  • Encouragement of bicyclist traffic downtown
  • Exposure of Bozeman Creek as a centerpiece of the downtown area
  • Extension of Babcock to connect to Bozeman Public Library

Almost a decade later, a 2018 Progress Report has been released. Here is the current status of the above recommendations:

  • Addition of a downtown conference center (Not Completed)

*However, a substantial amount of meeting space has been designated— American Legion, Baxter Hotel, Element Hotel, Emerson Cultural Center, etc.

  • Construction of a “boutique” hotel (Completed)

*Element Hotel—2015; Lark Hotel—under construction; Etha Hotel—construction to begin in 2018

  • Addition of plazas and courtyards for public use (Partially Completed)

*Element Hotel, 5 West, & Lark Hotel have front patios and rear courtyard spaces

  • Conversion of Babcock and Mendenhall to 2-way streets (Not Completed)

*Extensive traffic analysis for not only Babcock and Mendenhall is required, but also for Main, Lamme, Olive, N. 7th, Willson, Rouse and Wallace before this project can be further considered

  • Encouragement of bicyclist traffic downtown (Partially Completed)

*Four on-street bike parking stalls are available seasonally; Dero Fix-It Station was installed for cyclists to inflate tires and perform minor repairs; bike “sharrows” were added to Babcock & Mendenhall

  • Exposure of Bozeman Creek as a centerpiece of the downtown area (Not Completed)

*Financial constraints— the project will cost $350,000

  • Extension of Babcock to connect to Bozeman Public Library (Not Completed)

*Land needed for the extension is privately owned by Empire Building Materials and currently contains a warehouse. If the property is sold or redeveloped, this recommendation will be revisited.

 

​Downtown Boundary Map

More Housing Coming to Both Bozeman and Belgrade

by Hart Real Estate Solutions

Bozeman Development

The longtime trailer park on North Willson Avenue may soon be transformed into a series of duplexes. Santa Clarita-based company, William Homes LLC, has filed plans to replace the trailers with 16 three-story duplexes, each designed to include 3 bedrooms and an apartment above the garage for future owners to rent out if they choose— all contained within 1,800 square feet.

William Homes, LLC has a portfolio that encompasses many different types of projects, ranging from $159,000 to $1,000,000, which includes everything from townhomes to gated luxury communities.

Although the details about price range and the transition process haven’t yet been announced, construction could start as early as this summer if the city approves the project. 

 

 

Belgrade Development

Plans for a 595-lot subdivision were discussed on Monday with the Belgrade City Council. The future proposed location for this new development sits on 153-acres of the former Prescott Ranch on Belgrade’s west side.

Some board members expressed concerns over non-existent streets that are currently reflected in the plans. The board wants all streets to connect through the subdivision as they are concerned with traffic pileups and proper traffic distribution, both of which are current problems in Belgrade. Another point of concern amongst the board were park sizes— the current plan reflects 5 parks spread out across the subdivision, each averaging 3 acres in size. The board suggested reducing this to either one or two larger parks.

Additionally, developers want to change the zoning from R-2 to R-3 in order to boost density and allow for multi-family housing. All input gathered at Monday’s meeting will be taken into account before developers submit a formal proposal to the city.

How Rising Home Prices & Growing Wages Relate to Desirability in Montana

by Hart Real Estate Solutions

Montana housing market prices are high, especially in Bozeman. In 2016, the median sale price for a single-family home in Bozeman was $359,250. Fast forward one year— the median sale price in Bozeman in 2017 was $380,750 (a 5.98% increase from the previous year).      

This data was pulled from the Big Sky Country MLS for 2018. 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.

 

In terms of median home values, Bozeman ranked the highest when compared to both other large cities in the state and the United States as a whole.

 

Median Home Values 

Although wages in Montana remain lower than the U.S. average, they are growing faster than other areas across the country. In 2000, the average weekly wage in Montana was 69% of the U.S. level— by 2016, they had grown to 76% of the U.S. level. Quickly growing wages could be a contributing factor to the ever-increasing demand for housing in Montana (and Bozeman in particular), although the demand for quality of life is likely the largest reason for the high demand and rapidly growing population. While the median household income in Bozeman is currently $68,000 (keeping pace with the current median home price), this statistic doesn’t account for the quality of the housing that is available at this price.

Many of the people coming to Bozeman are not reliant on Montana’s economy for income. This group of people includes out-of-state residents who own a second home in Montana, telecommuters, and retirees. In 2010, the share of second homes in Montana was 8%, while the U.S. percentage was only 3.5%. Our state also attracts a large number of people who have the financial means to live wherever they choose—23% of Montana’s personal income comes from non-wage sources such as dividends and retirement. The U.S. level is only 19%. In Gallatin County, more than 40% of adjusted gross income comes from non-wage sources.

Because of the high quality of life in Montana, rising housing costs are partially related to the state’s desirability to those whose income isn’t related to Montana’s economy, which means that wage increases may not be as tied to housing cost increases as we previously thought.

With Bozeman’s population expected to hit 50,000 by the 2020 census, wages growing relatively quickly, and home prices continually on the rise, when will our local market start to become more balanced? With new construction expected to rise as we move closer to that 50,000 mark and potential inventory growth predicted countrywide by the fall, we may be moving closer to both a more balanced market and more affordable housing than we think. 

Bozeman's Future- What Lies Ahead

by Hart Real Estate Solutions

Earlier this year, we learned that Bozeman had hired the city’s first affordable housing director in an effort to generate solutions to help reduce the gap between the cost of housing and affordability. In a recent city report, 22% of homeowners were found to be spending more than 35% of their income on their mortgage payment, while 44% of the city’s renters are spending more than 35% of their income on a monthly rent payment.

With current affordability statistics this high, Bozeman’s median single-family home price having reached $398,000 last year, and the current population estimated to be above 47,000 (and growing), it’s more important than ever for this new director to begin mandating affordable housing across all types of homes.

Another New Position

Another top priority for the city, in addition to working on the creation of more affordable housing options, is the construction of a new public safety complex. Whether the city will go alone to build the new center or partner with Gallatin County is to be determined, but either way, the plan will come with a big bill that will need plenty of support before citizens vote on it.

When it comes to large city plans that have an impact on Bozeman’s future (such as affordable housing options or the new safety complex), there’s a bit of a disconnect with city hall’s goals reaching residents. In effort to better communicate the city’s plans to citizens, Bozeman will be hiring its first communications coordinator.

This new role will serve as City Hall’s voice in order to manage which information goes to the public, and how. Largely intended to be an outreach position, the person who fills the job will keep citizens informed via social media and traditional press releases and will likely step outside of the traditional 8-to-5 schedule. Although the search to fill the position is national, the job could be filled as early as April if the city finds the right applicant.

Looking Forward

When Bozeman reaches 50,000 people (and so far, it’s on track to do so very soon), a Metropolitan Planning Organization (MPO) must be established, per the federal law. This organization will help with transportation planning and give citizens more control over what happens to the area. At this time, Bozeman will also receive federal money for future expansion projects. If the city and the county can work harmoniously together, some officials believe that an MPO would be beneficial as Bozeman continues to grow, while others are skeptical because of uncertainties with a limited pot of money and strained relationships between Bozeman and Gallatin County.

As the future unfolds and new city positions are created to help determine the direction in which Bozeman will develop, it will be interesting to see how some of the city’s current issues are solved in terms of both population growth and more affordable housing options.

Big Sky 2025- Expanding & Improving America's Third Largest Ski Resort

by Hart Real Estate Solutions

With a population of 2,500 (and counting), a medical center that offers emergency services and inpatient care, numerous shops and restaurants, and an accessible 5,800 acres of public skiing, both the community of Big Sky and the resort itself are turning heads as expansions to the area continue every year.

Already the third largest ski resort in America, and consistently seeing more skiers every winter season, the resort’s Big Sky 2025 plan is well underway. First announced in 2016, this plan will cost the resort upwards of $150 million in costs related to Mountain Village renovations, installations of new chairlifts and upgrades to existing ones, and preparing Andesite Mountain for night skiing.  

So far, Powder Seeker (a high-speed, six-seater lift with bubble covers and heated seats) has been installed, and the Challenger lift was replaced with a triple fixed-grip and a conveyor load, which shortened ride time by 25%. Next on the agenda is the installation of North America’s first eight-seat, high-speed chairlift. Named Ramcharger 8, the lift will feature extra-wide heated seats, bubble covers, and an LED screen at the bottom terminal with up-to-date guest information. While there are other eight-seater chairlifts worldwide (majority being in Europe, two in South Korea, and one in Australia), Ramcharger 8 will be the world’s most technologically advanced lift ever built, and will be open in time for skiers to enjoy during the 2018-19 ski season.

Next steps in the plan include:

  • Replacing the Shedhorn double chair with a high-speed quad
  • Transforming the upper level of the Mountain Mall (addition of indoor fireplaces, an elevator, a coffee bar, traditional apres ski bars, and new food options)
  • Expanded snowmaking coverage
  • Night skiing on Andesite Mountain
  • Gondola installation

Further down the road in the late stages of the plan, several additional lift upgrades, hotel renovations, and Montana Club developments are scheduled to take place.

Making preparations and expansions now is a proactive approach to the inevitable growth and increased volume of traffic that both the community of Big Sky and its resort are bound to see in coming years. Bozeman’s population is expected to nearly double in size in the next few decades, the Bozeman Yellowstone International Airport is currently preparing for increased airline traffic, and Gallatin County as a whole is expected to gain 55,000 new residents by 2045. It’s clear that although once considered a hidden treasure, Montana (and more specifically the Bozeman/Big Sky area) is garnering more attention over time as we see more tourists in the area, and more visitors deciding to Montana their permanent home. 

Bozeman Yellowstone International Airport Prepares for More Traffic

by Hart Real Estate Solutions

Home prices are rising, the population is growing, and our overall economy is expanding— which means that our airport is also seeing an increase in traffic. In 2017, the Bozeman Yellowstone International Airport (BZN) handled just shy of 1.2 million passengers, and now accounts for 30% of all airline traffic in and out of Montana. With an 8.3% increase in traffic from 2016, this is the 8th consecutive year of record breaking passenger traffic for BZN.

BZN is the busiest airport in the state, and the 8th busiest in the Northwest Region of the country (region including Montana, Wyoming, Idaho, Utah, Colorado, Oregon and Washington). With passenger levels currently predicted to be 10% higher this summer than previous years, several upgrades and expansions are scheduled to take place within the next few years to accommodate the ever-increasing growth.

  • The Largest Parking Garage in Montana

Originally on the airport’s to-do list for 2021, the construction of a 4-story, 1,100 stall parking garage began in December and is now scheduled to be completed by June. The garage (which is estimated to cost $30 million) will contain long-term, short-term, and rental car parking.

  • New Terminal Additions

Though not to be completed for several years, a terminal expansion will begin this summer, once the parking garage is complete. The expansion will include three new gates and the ability to handle the inevitable increase in more baggage.

  • Main Runway Maintenance

Runway maintenance is required every 15 years. This spring, the main runway is scheduled to close for three weeks to complete maintenance. Between April 30th and May 19th, no flights will operate between 12:30pm and 11:00pm. This project will cost the airport an estimated $7 million, although if the airport were to entirely close during this time, it would cost the airport an additional $2 million/day. Other runways will still operate during this three-week period, and the main runway will operate outside of the 12:30 pm to 11:00pm time frame.

  • The Addition of a Tower Controller

In order to better handle growing traffic, the airport will add one new tower controller and additional tower hours. With these new additions, tower coverage will span from 5:00am to 1:00am— the current hours of operation are 6:00am to midnight. The new controller will be fully trained and certified by this summer.

 

BZN serves as a year-round gateway to Yellowstone National Park, Big Sky Resort, and Montana State University. With airline traffic continually increasing every year, it only makes sense for our airport to keep pace as it continues to improve and expand its current facilities to better cater to the growing community. 


More Affordable Housing Coming to Bozeman

by Hart Real Estate Solutions

Bozeman is growing exponentially— this is no surprise. What might be surprising though is how quickly it is predicted to grow by 2045. Between 2000 and 2016, Gallatin County added roughly 2,200 new residents each year. From 2017 to 2045, Gallatin County is expected to gain nearly 55,000 new residents, with 50% of these residents expected to live in the City of Bozeman.

It’s been a seller’s market in Bozeman for some time now, with both available inventory and housing affordability increasingly becoming more of an issue in our market. The greater Bozeman area has experienced an average 8.3% increase in median sales price over the last 5 years. Currently, the median home price in Bozeman is $398,000— meaning that a household needs to earn at least $68,400 per year, or $32/hour for one earner, in order for this home to be considered affordable at the 30% of income affordability standard. While the median household income in our area is $68,000 (indicating that home prices are in line with incomes), this statistic doesn’t account for the quality of the housing that is available at this price.

However, with the city’s prices on track to surpass wages, and so many people moving to the area over the next few decades, the need for more affordable housing options is critical. The latest affordable housing project is being led by HRDC, and will be constructed on a parcel of land that partially wraps around Baxter Square Park (just under 3 acres), a quarter mile northwest of the North 27th Ave and Baxter Lane intersection. The 24 townhomes will be available to families who earn between $30,000 and $40,000/year, and those who are interested must financially qualify and complete HRDC education and home buying courses.

The Location Dilemma

Years ago, previous developers created a human-made pond adjacent to the future location of the new affordable townhomes. Their project was stalled in 2008 after the recession and was never fully completed. Over the past decade Cattail Creek merged with the pond, creating an expanse of wetlands in the area, resulting in a difficult location to build on.

Originally, HRDC had plans for a few single homes— they’ve since asked city commissioners to approve constructing the new affordable units closer to the pond, in addition to reducing both the size of the lots and the amount of space between homes and the streets. HRDC also proposed the creation of dog stations, individual lot fencing, and enhanced building signs for each of the units. City commissioners approved the project on February 26th, as it falls in line with their preference for constructing more homes on less space as Bozeman continually adds several thousand new residents every year. 

Future Location for Affordable Townhomes (Approximate)

 

Next Steps

If Bozeman continues to grow as quickly as it is predicted to (an additional 27,500 residents by 2045), then projection estimates will demand 12,700 new housing units over the 2017 through 2045 time period. In order to construct all of these units, developers need between 1,800 and 3,100 acres— the current supply in city limits for residential development is 1,300 acres.

While some of these new 12,700 units will be single-family homes, others will be multi-family buildings, townhomes and duplexes. Some will be affordable housing opportunities, and others won’t be.  At any rate, Bozeman IS growing, and quickly. Whether growth means that we expand up, or expand out, expansion of some sort and the addition of more affordable housing options will be necessary over the next few decades as our city prepares for massive growth.

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