Bozeman’s Affordable Housing Crisis Tied To Newcomers And Wall Street
Calling a time out on the boom: two former mayors from one of the fastest-growing small cities in America want temporary moratorium on new housing development
Just as wildlife is being displaced by sprawl at the exurban edges of Bozeman and the Gallatin Valley, so too is the current real estate frenzy in Bozeman and other towns in Greater Yellowstone displacing workers, young people, single moms with kids and elderly from housing that used to be affordable. Photo courtesy Jacob Boomsma/Shutterstock ID 1857352360
EDITOR'S NOTE: Some members of the Bozeman City Commission and lobbyists for the building industry claim that weakening regulations and allowing aggressive infill in favor of the free market will cure Bozeman's deepening affordable housing crisis. But two former mayors in the op-ed below say it's actually caused by a myriad of factors, including the city's inability to deal with growth at the north end of the Greater Yellowstone Ecosystem, speculative real estate and a planning department that is both overwhelmed and ill-equipped to confront an unprecedented boom transforming both Bozeman and Gallatin County, Montana. Affordable housing challenges in Bozeman and Big Sky are spilling over into neighboring valleys and they are equally dire in Jackson Hole and Teton Valley, Idaho. Steve Kirchhoff, known for being a political progressive, served one term as mayor of Bozeman and was on the city commission from 1999 to 2007. Jeff Krauss, known as a libertarian and conservative, served three terms as Bozeman mayor and was on the commission from 2004 to 2020.
by Steve Kirchhoff and Jeff Krauss
We would like to pose a question to the Bozeman City Commission. Imagine we could wave a magic wand and dramatically increase Bozeman’s housing supply overnight. Let’s say we could wake up tomorrow to 1,000 new units of all kinds of housing. Do you think the average housing price would decrease?
Our hunch is that most, if not all of you, believe the answer is yes. Your actions are those of people who believe unaffordability in housing is caused mostly by low supply in the market, and that we can build our way to affordability. But we suggest that is a false premise. We don’t have a supply problem in our market; instead, we have a market that caters to Wall Street instead of answering the needs of working Bozemanites.
If we woke up tomorrow to 1,000 brand-new housing units, they would be snatched up by same people who are snatching them up today: 20 percent would go to wealthy people from Bozeman who can afford to move up or invest; fifty percent would go to wealthy newcomers; and the remaining thirty percent would go to out-of-state investors.
"If we woke up tomorrow to 1,000 brand-new housing units, they would be snatched up by same people who are snatching them up today: 20 percent would go to wealthy people from Bozeman who can afford to move up or invest; fifty percent would go to wealthy newcomers; and the remaining thirty percent would go to out-of-state investors."
The fact is, without a magic wand, the local construction industry is already building plenty of housing—but the vast majority of it is priced above the reach of working Bozeman citizens. Wealthy investors have skewed Bozeman’s market prices upward to favor themselves while excluding local wage earners from the chance to purchase housing. And this perverse reward system distorts prices in other Montana cities and towns, too.
A poll released this month by the UM Crown of the Continent and Greater Yellowstone Initiative found most Montanans resent the impacts of fast-paced growth they face today. Strong majorities of poll respondents believe that growth is happening too fast and has led to a decline in their quality of life in the past five years. A whopping 92 percent say the lack of affordable housing is a “very” or “extremely” serious problem.
The same fist of the investment class is pounding down the gates and staging hostile takeovers of housing markets in larger cities across the US. Last August The Washington Post reported that investors purchased one quarter of new housing in Phoenix, and nearly as much in Miami, Atlanta, Charlotte, and Las Vegas. If there is an invisible hand guiding the housing markets in “hot” US cities and Montana towns, it’s studded with diamond rings, and it doesn’t care whether housing will be constructed for local working people or not.
"A poll released this month by the University of Montana Crown of the Continent and Greater Yellowstone Initiative found most Montanans resent the impacts of fast-paced growth they face today. Strong majorities of poll respondents believe that growth is happening too fast and has led to a decline in their quality of life in the past five years. A whopping 92 percent say the lack of affordable housing is a 'very or 'extremely' serious problem."
As Bozeman city commissioners, you have been frustrated filling vacancies in city employment. The chief reason you cannot fill positions is that potential employees cannot afford housing. Currently you cannot house your employees, nor will you be able to do so by speeding up construction and by throwing out regulations that protect historic neighborhoods from high-density infill.
Well, then — what should you do? We suggest you adopt a six-month-long interim ordinance prohibiting the application for new development in all zoning districts that allow residential buildout — a temporary moratorium. You can use the six months to devise new zoning and other regulations that require the construction of truly affordable housing for Bozeman’s working people.
Such measures might include new zone code that allows increases in building heights and density only when such increases provide long-term affordable housing for Bozeman’s workforce; new code that repeals or severely restricts Airbnb and VRBO properties; and new code that protects historic neighborhoods from inappropriate, non-contextual, infill developments. Of course, other suggestions might be as or more effective than these; the important thing is to take the time needed to devise a better overall housing strategy.
Working residents deserve more attention than you are giving them. After all, it is their sweat and tears that created Montana’s beautiful cities and towns — the “equity” — that out-of-state investors are capturing for themselves. Truly successful cities do not exclude the very people who built the equity so attractive to investment; instead, they find ways to retain and encourage the people who make their cities work.
About Steve Kirchhoff and Jeff Krauss
Steve Kirchhoff, known for being a political progressive, served one term as mayor of Bozeman, Montana and was on the city commission from 1999 to 2007. Jeff Krauss, known as a libertarian and conservative, served three terms as Bozeman mayor and was on the commission from 2004 to 2020.
