This November, Water and Housing on Bozeman Ballot

In Bozeman, Montana, housing and water are perennial contenders atop the list of community concerns. Tie the two issues together, and you’ve got a tussle on your hands.

Bozeman residents on November 4 will face these issues head on when they’re asked to vote on the Water Adequacy and Residential Development Initiative, known as WARD, a citizen-led effort that ties the city’s cash-in-lieu of water rights program to affordable-housing development.

While proponents say WARD will help address the two intractable challenges, some feel the strict mandates could drive development to the county and surrounding municipalities, leading to decentralized water management and additional sprawl.

“There were a number of individuals who were concerned both about affordable housing and water conservation,” said WARD member and retired fisheries biologist Dan Carty. “And so at some point, John Meyer from Cottonwood [Environmental Law] got us all together in a room and we just started talking.” Meyer, attorney and executive director for Cottonwood, is a long-time environmental litigator and candidate for Bozeman mayor in November.

Those early conversations led to the initiative as it reads on the November 4 ballot, which if passed would satisfy some of the demand for nearly 5,900 residents in need while allocating city-managed water resources toward below-market housing and away from luxury projects, according to WARD proponents. 

Since the cash-in-lieu of water rights program was instituted in the 1980s, more than 99 percent of new builds have used the system. WARD would require these beneficiaries to list 33 percent of new developments of three or more units at affordable rates, defined as 120 percent of Area Median Income for purchase or 60 percent of AMI for rentals.

The included requirements have sent shock waves through the development industry. “Our perspective is that the math doesn’t work,” Venture West Development founder Todd Waller told a crowd at the Bozeman on the Brink panel discussion on October 8 at the Emerson Center. “I’m opposing something that would benefit me financially, but I think it will do more harm than good.” Venture West is developing the Jackrabbit Crossing project in Belgrade, where any potential WARD requirements would not apply.

Waller’s sentiments echo others within the community who concur with a recent report commissioned by the city and conducted by consulting firm Economic Planning Systems. The report suggests that the affordability requirements will lead to economic losses on a per-project basis, resulting in a decreased supply of new housing and increased prices for the current housing inventory, theoretically shifting construction elsewhere. “WARD is going to push development to the county, which is least ready to receive it,” Gallatin County Commissioner Jennifer Boyer said at the October 8 panel. “It’s going to lead to sprawl.”

WARD proponents see things differently. “The status quo towards development already causes sprawl,” Carty said. “Lack of affordability is causing sprawl, including as far away as Butte.”

Lorre Jay, an instructor at the Jake Jabbs College of Finance and Entrepreneurship at Montana State University agrees. A WARD spokesperson, Jay questions how much building in Bozeman would actually slow under the potential mandates. “I don’t agree that WARD would cause a moratorium,” she said in a recent conversation with Mountain Journal. “It’s a major shift in how things are developed. We’re putting demands on developers, mandating affordable housing, whereas previously we were hoping for affordable housing.”

Even with the potential restrictions, Jay believes robust demand will continue driving supply within Bozeman city limits, despite the financial analysis undertaken by Economic Planning Systems and comments to the contrary from developers, city officials and county commissioners.

If construction is driven from the city into Gallatin County, water demand would be primarily satisfied by exempt wells, which are not subject to the same water-rights-permitting process. Use of these wells has increased ten fold in recent decades, Trout Unlimited’s Montana Water Director Pat Byorth said during the October 8 panel. “[Bozeman’s] wastewater treatment plant is state of the art,” he said. “And yet what we’re seeing is a very leaky system just downstream.”

Slowing development in Bozeman paired with continued demand growth concerns Byroth. “If [building] is so restrictive in the city, why would you go through the process of annexation and hooking up to the city system when you could just get on septic systems? The fewer septic systems built on the periphery of the city the better,” Byorth said during a recent interview with Mountain Journal.

While Byorth sees centralized water management as preferable to exempt wells, he also acknowledges that the cash-in-lieu system isn’t perfect either. “The program is an easy button that creates a lot of risk for the city,” Byorth said, “because they have to go convert that cash into usable water.”

Bozeman is within a closed basin that requires city planners to procure rights from existing holders, primarily the agricultural community. “It sets up this principle we call ‘buy and dry’,” Byorth said. “And this has happened all across the Colorado Front where municipalities or other developers just go out and buy a ranch, strip the water off and use that water to fuel development.”

While Byorth acknowledges that the “buy and dry” principle is not being actively implemented locally, and that the city’s water conservation program is already showing positive results, the actual water supply still concerns him for a variety of reasons, chiefly shifting precipitation patterns due to climate change and water rights adequately matching seasonal and geographic water use.

“Water rights are the right to use water — they’re not a guaranteed supply,” he said. “And what we’re seeing in the East Gallatin and the West Gallatin [rivers] is our snowpack starts later, doesn’t reach the same full extent, and we get more rain on both ends of the snowpack.”

Because local water supply is based almost entirely on snowpack, these shifting precipitation patterns should give planners pause, Byorth added. “What that means is our water supply — rain, for example — doesn’t recharge the aquifer, to some extent. Snowpack, on the other hand, as it melts, tends to hang there and slowly fills the streams, which fill the ground water through flood plains and infiltration, charging the system in a whole different way.” According to the Greater Yellowstone Climate Assessment, the trend of decreasing snowpack and increasing rain in fall and spring is set to continue as climate change impacts the region.

For its part, Bozeman believes it has plenty of water. According to a recent presentation by director of utilities Shawn Kohtz, the city only uses 43 percent of the water associated with its water rights, and total water use through the system equates to less than 1 percent of all water flowing through the Lower Gallatin watershed. “We’ve definitely got some room to grow just in our current water portfolio,” Kohtz said when discussing the WARD initiative with Mountain Journal. “That’s not a static picture. It continues to change over time because we continue to work on it.”

That work includes water conservation programming and a master plan featuring 18 conservation measures, 11 of which have already been implemented, according to Kohtz. This has helped Bozeman reduce its per-capita water use to 114 gallons per day, down from a recent total of 188 gallons.

With ballots set to hit mailboxes as early as October 20, Bozeman residents will soon weigh in on WARD. If the initiative is adopted, it will become law for at least two years, after which time repeal is possible.

For now, the issue will continue to serve as fodder for Montana’s favorite pastime: wondering if there’s enough water to go around and who has first dibs.

EDITOR’S NOTE: Ballots will be mailed to Bozeman residents on October 17. Election day is November 4.