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Helena Montana State Capital

Land Use Reform

Feb 6, 2023 by AFP

How to create affordable housing through the free market 

Montanans are facing a housing crisis. Gone are the days of our parents when they could begin their jobs right out of school and buy a home for $60,000. While the US housing market is experiencing inflation in housing costs, Montana home price increases far exceed the national average. The reason for this is that it is too difficult for builders to build enough homes to keep the price under control. 

We need affordable housing through abundant housing. Montana has one of the lowest population densities in the United States with vast amounts of buildable land. Yet, the government is making it impossible to build enough homes for our neighbors by infringing on our private property rights.  

According to the Frontier Institute, over 70% of primarily residential areas in Montana’s most in-demand communities outright prohibit or penalize affordable multi-family housing development. Among all the cities assessed in the Montana Zoning Atlas report, two-family housing is welcomed without Minimum Lot Area penalties on just 29% of primary residential land. In comparison, 3+ housing is welcomed by only 8%. 

We need policymakers to enact pro-housing reforms to make Montana cities more welcoming for all Montanans to live and work! 


Americans for Prosperity –Montana (AFP-MT) works to solve Montana’s most significant social problems by breaking the government barriers that get in the way of free people helping each other and themselves. One of the biggest problems right now in Montana is the cost of housing, property taxes, and rent. By eliminating the barriers to supply that prevent people from transforming their property in mutually beneficial ways to help themselves and others, we can create abundance and, thus, affordable housing through the market process. Price increases result when there are too many dollars chasing too few goods, the ONLY solution is to allow more goods, in this case housing units, to be created.  

Zoning Facts 

  • Over 70% of Montana’s most in-demand residential areas outright prohibit or penalize affordable multi-family housing development.​  
  • Among all the cities assessed in the Montana Zoning Atlas report, two-family housing is welcomed without Minimum Lot Area penalties on just 29% of primary residential land. In comparison, 3+ housing is held on only 8%.  
  • 35% of Montana is public land you cannot build on. The western half includes the most significant portions of this land; many large towns are private land islands.​  
  • A 2015 study from the National Association of Homebuilders estimated that excessive regulations add as much as $93,000 to the average price of building a single-family home. Prices have only skyrocketed in recent years.  
  • In a 2019 article in Montana Business Quarterly, the Director of the Bureau of Business and Economic Research (BBER) at the University of Montana said, “there exists ample evidence that local regulation has a significant impact on housing costs.”   
  • A 2021 report by Pew Charitable Trusts to the Montana Legislature found that jurisdictions that heavily regulate their housing supply see higher housing costs, slower economic growth, and fewer homes built.   

Where Does Zoning Come From? 

Before the 1960s, only the east and west coasts were heavily zoned like all private land is today. Before LBJ’s “urban renewal” grants (part of the “great society” reforms), which incentivized local governments through federal money to adopt zoning regimes, every major city in America was built using the private property-market process.  

Why Reform Zoning? 

As demonstrated by the growth of California-style zoning to the middle of the country, we can look to our neighbors out west for our future if we continue down the path of central planning our cities. Zoning costs include the soaring prices we have seen a spike in Montana since 2020 but have been growing since the mid-2000s. As seen in California, urban sprawl, pollution problems, and a lack of organic neighborhoods, mixed-use, old, and new buildings nearby each other are some of the other unintended consequences of government planning in land use.  

What About HOAs and Covenants? 

AFP’s endorsed legislation does not change private contracts; it only reforms public policy surrounding zoning for cities with a population greater than 5,000 and 50,000.   

What About Infrastructure? 

There is no doubt city governments will need to plan differently, assuming more in-fill in our cities as they can no longer outsource the cost of building new developments out of town to developers and those landowners. But this is what our property taxes are for, paying for the maintenance and upkeep of public goods that are in common use.   

  • According to builders in Montana, local government red tape is the biggest challenge to upgrading our current septic and water systems in cities. It is not a much harder technical problem than building new systems out of town but a lack of clear planning, arbitrary and ever-changing rules, and a bureaucratic process is the biggest barrier.   
  • City governments can deny a building permit because there is not sufficient water or sewer capacity. This legislation does not change that.   
  • The demand to live in an amazing place like Montana will continue to increase, these costs will be born regardless, building out of town in new developments has infrastructure costs in-city as well. Road wear, highways, and parking garages, for example.   
  • Water table issues are a problem from immigration, not where people immigrate to. If they are out of town, that only competes more with ag water scarcity problems.  
  • Middle-density starter homes like duplexes make more efficient use of infrastructure like water/sewer compared to single family homes. Allowing more duplexes decreases the impact of population growth on infrastructure, not increases.   
  • Small lots are 40% cheaper than the large lots currently planned with rampant single-family housing and the broad use of large minimum lot sizes.  

Why Focus on Minimum Lot Sizes? 

Minimum lot sizes act as an unofficial single-family zone when they restrain the size of lots. Some countries have no minimum lot sizes; for example, Lewis and Clark’s County.  

Why Does Affordable Housing Matter? 

Every generation makes a promise to the next to give them a world better than the one we inherited. If we continue the path we are on, this generational contract will be broken. Millennials, for example, make more money (inflation-adjusted) than their parents at the same age but have access to far less capital (such as a house) to lean on. The prospects are even worse for Gen-Z, who cannot afford to live outside their parent’s homes until their mid-20s.  

 Won’t abundance Decrease the Value of My Home? 

Because of the extremely high demand to live in Montana, it is more likely to make the increase in prices slow down overall. This also means price increases on your property taxes will also slow down. It also means more re-development in our downtown city areas. In these more mixed neighborhoods, young families live close to retirees. It could mean less traffic as people move to downtown areas and less burden on public transit demands.   

Rural / Environmental Argument 

It will slow down urban sprawl persevering traditional agricultural industries and public access routes to public land.  

Ultimately Ask Yourself 

Do you want a Montana our children can afford to live in, or do you want to be like California?  

Do you have a higher right to someone else’s property rights than they do to their own? You don’t have a higher claim to someone else’s property than they do