Where Were You During the Stampede?
Steve Kirchhoff | Wednesday Mar. 1st, 2023
As everyone knows, Bozeman and other hot, fast-growing towns in Montana lack affordable housing. The shortage of affordable housing is the product of the actions of four classes of people who, prior to the pandemic, had less influence over Montana’s social and cultural realities than they enjoy today.
First, out-of-state home buyers with more personal wealth than the average Montanan have moved here in response to the pandemic and driven up housing prices; second, prices are purposely inflated by increasing numbers of un-located investors (“un-located” because many investors may never set foot in our state) who buy Montana housing as an asset to hold and flip; third, purchasers of second- and third- and fourth homes jack up prices, while leaving homes empty for long stretches and, fourth, purchasers who buy dwelling units to convert to short-term rentals push rental prices up and subtract them from overall rental supply.
In Bozeman, Kalispell, Whitefish, Missoula, and in many other cities and towns, local citizens are too cash-poor to purchase housing in markets jumped-up by the actions of these classes of buyers. Steep housing markets make exiles out of Montana’s native citizens, many of whom are young and just starting out; though they wish to remain in their hometowns, they are unable to compete in a housing market dominated by moneyed purchasers.
Unaffordable housing markets empty towns and cities of those natives who have provided the muscle for daily work, and who have defined the city’s historic character. That’s not the end of the consequences. Employers in hot towns complain of labor shortages. Homelessness increases. Paychecks cover fewer and fewer expenses. Meanwhile, the pace and scale of development increases so that you can almost hear the hollowing-out of the community’s cultural and social life. The middle-class wobbles while economic elites prosper, and day workers hold on for dear life.
Despite the housing boom’s corrosive effects on the well-being of many Montana towns, the affordability problem has created economic opportunity for others. Big movers in the housing industry, aided by anti-government and “free market” ideologues and by many local politicians and state officials at the highest level have seized on the affordable housing shortage as an opportunity to deconstruct the laws guiding development in Montana’s cities and towns.
Seeing the frenzied concern about housing and realizing that average people have little understanding of the inner workings of growth and development, self-interested private actors have leveraged the gullibility and widespread anti-government sentiment of Montana’s political class—both moderates and conservatives—and convinced them to take dramatic deregulatory actions in the name of solving the affordable housing problem.
It goes like this. An industry rep or a think tank spokesperson finds a legislator or city commissioner and convinces them to take the following steps: Step 1. Declare high housing prices to be a “crisis.” Step 2. Blame the “crisis” on short housing supply. Step 3. Blame the short housing supply on “burdensome regulations”—which is to say, on zoning codes. Step 4. Present a “solution” to the “crisis” in a state or local law dismantling local zoning.
This process is well under way. In Helena, the legislature is moving on numerous bills that will supposedly address the affordability crisis. Among them is a bill to abolish single-family zoning; another to override local plans and codes that designate where multi-family and mixed-use development can occur; another to shrink maximum lot sizes; and another to streamline review by cutting the public out of the process—and many more of the same ilk.
Legislators justify this incursion into local planning and development by claiming there is no other way to address the crisis. Without compelling evidence, they nevertheless argue that municipal governments abused local control by adopting restrictive zoning codes that helped to precipitate the crisis. To solve the crisis, they conclude, cities and towns must forfeit control over land-use planning and regulation.
Finally, it needs to be stated that the bills attacking local control contain no legal guarantees that their implementation will result in affordable dwelling units. The bills contain no legal mechanisms to require affordability in exchange for streamlined process, lower design standards, smaller lots, and higher densities. The bills receive support from lawmakers on the presumption that they will increase the housing supply and therefore lower housing prices. Legislators are operating on a wing and a prayer—or worse…
Let’s be clear: the current deregulatory frenzy is a massive sell-out of Montana and Montanans. It is cynical and heartless and bloodless. The bills in Helena will increase housing industry profits. The principal beneficiaries of these bills are housing industry bigwigs and the purchaser classes mentioned above. The bills will merely speed up the conversion of Montana’s fields and meadows into high-density condo and apartment developments to be purchased by the same classes of purchasers dominating markets now.
Meanwhile, overwhelmed by the speed, force, and sheer number of bills to gut local control, few in local elected positions are able to stop, take a breath, and propose a better way to deal with the housing problem. But that’s exactly what they should do. In the face of the deregulatory stampede, some local governments, including Bozeman’s, are not even bothering to oppose the worst bills put forward in Helena. Instead, arms wide open, our local government has decided that being trampled by Helena is better than the alternative—taking a stand.
Even so-called liberal city commissioners feel obliged to increase density, streamline codes, wink at investor purchases and short-term rentals, and cut corners on quality in the built environment. These actions will merely ramp-up the already screaming-hot growth machine, increasing the size of the housing market while leaving the purchasing dynamics that favor wealthy out-of-staters in place.
Just as they are doing in countless other states, the same classes of investors will continue to dominate Montana’s hot housing markets until a nationwide downturn occurs that pulls Montana and other states down with it.