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.