Montana lawmakers say a major package of housing reforms is beginning to show results, after the state underwent dramatic housing price increases since the COVID pandemic shutdown.
During a recent appearance on Voices of Montana, State Senator Forrest Mandeville, of Columbus, said the reforms—first passed during the 2023 legislative session—are designed to remove regulatory barriers that have limited housing development for decades. (CLICK HERE to listen to the podcast!)
Housing Costs Experience Dramatic Increase
Montana has experienced dramatic increases in housing costs in recent years. According to industry data referenced during the discussion, home prices in the state roughly doubled between 2019 and 2023, while wages did not keep pace. In some communities such as the Bozeman area, the median home price has approached $700,000, creating significant challenges for many working families.
“The biggest issue we’ve had is supply,” Mandeville said. “Our zoning codes often limited development to large-lot single-family homes, which prevented builders from creating smaller homes or more affordable options.”
The reform package—sometimes referred to by policy analysts as the “Montana Miracle”—includes several changes intended to increase housing flexibility in larger communities. Among them:
- Allowing duplexes on lots previously limited to single-family homes
- Legalizing accessory dwelling units (ADUs) such as backyard apartments or “granny flats”
- Allowing residential development in some commercially zoned areas
- Updating the state’s Land Use Planning Act to streamline local development approvals while maintaining public input
Some of those measures were temporarily tied up in court following a legal challenge that argued the legislation did not provide adequate public participation during the planning process. However, the Montana Supreme Court ruled unanimously that the law’s public-input provisions were sufficient, clearing the way for communities to fully implement the reforms.
Market-Based Approach
Mandeville, a professional land-use planner, said the legislation was intentionally designed as a market-based approach rather than a government subsidy program.
“We didn’t mandate what people have to build,” he said. “We simply removed barriers so the market can respond to demand.”
Early signs suggest the changes may be helping stabilize housing costs. According to Mandeville, home prices in some areas are no longer rising as rapidly, and rental markets are beginning to stabilize after several years of steep increases.
“Rents were skyrocketing for a while,” Mandeville said. “Now we’re seeing them start to flatten out or even decrease in some places. That creates opportunities for people who had been priced out of the market.”
Montana’s housing reforms have also drawn national attention. Policymakers in several states—including New Hampshire, Arkansas, and Michigan—have studied the Montana model as they consider their own approaches to housing shortages.
Despite the progress, Mandeville said more work remains. Future legislative discussions may focus on building codes, minimum lot sizes, and other regulations that can add to construction costs.
“There’s still more to do,” he said. “But Montana has made a strong start.”
