HomeMy WebLinkAbout11-18-19 City Commission Packet Materials - A4. Presentation of the Community Housing Action Plan
Commission Memorandum
REPORT TO: Mayor and City Commission
FROM: Loren Olsen, Affordable Housing Program Manager
Martin Matsen, Director of Community Development
SUBJECT: Presentation of the Community Housing Action Plan, a partnership framework to address community housing in Bozeman over at least the next five years; and adoption of
Resolution 5081 accepting the community housing action plan as a city document.
MEETING DATE: November 18, 2019
AGENDA ITEM TYPE: Action
RECOMMENDATION: Formal receipt of the Community Housing Action Plan (Plan),
consideration of the plans objectives, action strategies and proposed action items; and adoption
of Resolution 5081.
SUGGESTED MOTION: Having reviewed and considered Resolution 5081, accepting the
Community Housing Action Plan, related public comment, and all other information presented, I
hereby move to adopt Resolution 5081, accepting the Plan with associated objectives and
proposed action strategies.
STRATEGIC PLAN: Initiative 4. A Well-Planned City, states “We consistently improve
our community's quality of life as it grows and changes, honoring our sense of place and the
"Bozeman feel" as we plan for a livable, affordable, more connected city.” Within this initiative
in section 4.5.b) it reads “Develop a Comprehensive Affordable Housing Action Plan that includes, but is not limited to:
• Mandates the creation of affordable housing across all dwelling unit types.
• Provides prescribed flexibility in the manner in which the mandate can be accomplished.
• Provides a substantial, broad-based and reliable source of funding for the construction of affordable housing and for affordable housing loans.
• Actively encourages Bozeman's major employers to develop workforce housing
programs for their employees.”
Speaking directly to this planning effort the City Commission has identified Affordable Housing as one of its five priorities for 2019.
BACKGROUND: The Community Housing Action Plan presents a set of actions that address
a range of community housing needs. This plan was developed to begin addressing identified
community housing needs and to create a lasting framework for implementation that will evolve as the community and its housing needs continue to evolve. The partnership framework for accelerating community housing in Bozeman is based on the recognition that no one entity can
solve the local housing challenges by itself. Utilizing the 2019 City of Bozeman Community
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Housing Needs Assessment as a base to understand the housing needs of residents and
employees in Bozeman, a local Housing Working Group, comprised of Bozeman community
stakeholders, with input from the public and technical assistance from consultants, created this
Plan. A timeline for achieving priority strategies has been established, recognizing that this Plan will have life beyond this timeline and will continue to evolve and meet changing community
housing needs over the long term. By including various community members in its
implementation (employers, institutions, community organizations, and stakeholders), the Plan
acknowledges that community involvement is necessary for the Plan’s success.
PROCESS TO DATE: The Community Housing Working Group met with the consultants
to learn about the various tools/strategies used in the inter-mountain west. Tools that might be
used to relieve the stress of increasing home prices and monthly rental rates were explored. The
project began in the spring of this year (2019) and followed the schedule below:
April 30 Outreach to Housing Working Group
May 8 CAHAB Regular Meeting
May 13 City Commission Regular Meeting
May 14 Action Plan Outreach
May 22 Kick-off Meeting – Session 1: Housing Working Group and CAHAB
May 23 Public Workshops – Inform Public and Gather Information
June 11 Housing Working Group - Session 2: Tool Prioritization
June 12 CAHAB Regular Meeting
July 24 Housing Working Group – Session 3: Strategy Refinement of Prioritized Tools
July 25 Housing Working Group - Session 4: Strategy Refinement of Prioritized Tools
Aug 20 Public Open Houses – Community Involvement
Sept 10 Housing Working Group - Session 5: Strategy Refinement; Financing; Timeline; Responsibilities (part 1)
Sept 11 Housing Working Group - Session 6: Strategy Refinement; Financing;
Timeline; Responsibilities (part 2)
Sept 27 Draft Action Plan to City Staff for review
Oct 3 Draft Action Plan to Housing Working Group for review
Oct 10 Meeting/Conference call – Draft Action Plan Review
Oct 14 Final Action Plan (with revisions) to City Staff for review
Oct 18 Final Action Plan Release to public (for 30 day comment period)
Oct 22 Public Open Houses – Community Involvement
Nov 18 City Commission Regular Meeting
DOCUMENT REVIEW: A completed plan was released for public review in October 2019.
The document is available on the City’s website, at City Hall, the Planning office and the
Library. Additionally, staff held two public open houses on October 22nd in an attempt to educate
and inform the public regarding the completed plan. The plan is based on three main objectives
that are outlined in table 1 below. The plan identifies 17 Action Strategies, all with associated
proposed action items. These are shown in table 2. An additional column has been added to this
table in an attempt organize the discussion should the Commission wish to make amendments to
the strategies or action items. It is the opinion of the City Attorney that if significant changes are
made to the plan, a continuation and additional opportunity for public comment would be
necessary. Each of the action strategies have been assigned an organization to take the lead
regarding future efforts. All strategies have also been assigned a difficulty level and have been
prioritized on a general timeline.
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Implementation of each action and strategy will require substantial follow up efforts and may
result in individual actions and strategies being modified. Additional public participation, review,
and comment opportunities will be required as follow up efforts proceed.
Table 1: Plan Objectives
Table 2: Actions and Action Strategies
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
1 General Funds
An annual or occasional
budget allocation primarily
to support staffing, pre-
development and gap
financing for community
housing.
1 Maintain in the short-term
until broad-based, reliable
funding source is secured.
1
2 Establish allocation criteria to
inform use of the City’s
Affordable Housing Fund.
2
2 Tax Increment Financing
(TIF)
Allows a local government
or redevelopment authority
to generate revenues for
properties targeted for
improvement. As
improvements are made
within the district, and as
property values increase,
the incremental increases
in property tax revenue are
earmarked for a fund.
Expenditures of TIF-
generated revenues are
subject to certain
restrictions and must be
spent within the district.
1 Use of TIF to support
community housing needs to
be explored at the local and
state levels.
1
2 Downtown is considering the
use of TIF to incentivize ADUs
and 1-bedroom units and/or
units that have long-term
affordability assurances.
2
Objectives Proposed in The Plan
1 Income Levels. Community housing should serve the full range of incomes without losing sight of safety net
programs. The primary focus should be on:
o Ownership housing from 80% to 120% AMI, while also incentivizing the production of
missing middle housing up to 150% AMI;
o Additional resident and employee rentals up to 80% AMI; and
o Safety net rentals below 30% AMI.
2 Jobs-Housing Relationship. Produce community housing at a rate that exceeds, or at least matches, job
growth at income levels and ratios being earned by Bozeman employees.
3 Community Housing Built and Preserved. Strive to produce community housing at a rate that matches the
spectrum of community housing needs, while also preserving what we have through a target of no net loss
of existing community housing stock.
396
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
3 Community Land Trust
Community nonprofit owns
land, develops housing and
provides long-term
stewardship for permanent
affordability through long-
term ground leases.
Typically, single family or
townhomes for moderate
and middle-income
households.
1 Consider establishing a
Community Land Trust (CLT)
organization that has the
capability to take on
management responsibilities
of permanent restrictions.
1
2 Coordinate with existing
housing providers with CLT
homes to increase efficacy
and avoid redundancy.
2
4 Deed Restricted Housing (Permanent)
Dwelling units permanently
restricted by occupancy
(local employee/resident),
income level, and with
rent/resale restrictions to
retain affordability in rising
and high cost housing
markets.
1 Transition to a permanent
restriction when publicly
subsidized community
housing units are created.
1
2 Align with other policies: fee
waivers and incentives.
2
3 Create a permanent deed
restriction that balances long-
term affordability with wealth
creation.
3
4 Structure the eligibility and
occupancy criteria to ensure
“fairness.”
4
5 Increase management
capacity - begin by evaluating
existing capacity, considering
adjustments, and/or
establishing a new entity, such
as a Housing Authority or
Community Land Trust.
5
6 Emphasize customer service,
such as one point of contact.
6
5 Inclusionary Zoning
Requires that new
residential subdivisions and
PUD’s include/build homes
that are deed restricted for
community housing.
1 Revisit Affordable Housing
Ordinance: evaluate what has
worked and not.
1
2 Apply to multi-family
development, as well as
single-family: ownership and
rental.
2
3 Incorporate incentives along
with housing development
requirement.
3
4 Consider addressing up to
120% AMI for ownership.
4
5 Require deed restrictions to
be permanent.
5
6 Ensure consistency with other
development codes.
6
397
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
6 Public/Private/ Institutional Partnerships
Public/institutional
organizations partnering
with the private sector for
development expertise to
build community housing
on publicly owned site. May
be vacant or under-utilized
land. May also include
institutional properties.
1 Establish criteria to prioritize
site(s).
1
2 Understand partner and site
constraints.
2
3 Facilitate partnerships. 3
4 Issue Request for Proposals
with desired community
housing outcomes.
4
5 Keep prioritized list for future
housing opportunities.
5
7 Homebuyer Assistance
Down payment assistance
of grants or second
mortgages for qualified
buyers. Can be used for
restricted or market units.
1 Build upon existing program
through the City, HRDC,
Habitat for Humanity.
1
2 Seek local funding to serve
households up to 120% AMI.
2
3 Community education
program – financial literacy
and assistance options.
3
4 Work with employers to assist
employees. Technical
assistance, loan/grant options,
administration, etc.
4
8 Permanent Supportive Housing (PSH) and Transitional
PSH pairs housing with
supportive services to
transition chronically
homeless into home
security.
Transitional housing
provides temporary
assistance to bridge the gap
from homelessness to
permanent housing.
1 Inform developers of PSH
incentives/opportunities.
1
2 Identify needs (HRDC). 2
3 Form housing group to
advocate for more state
funds.
3
4 Implement FUSE model to
more efficiently and
effectively provide services
(HRDC).
4
398
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
9 Fee Waivers / Deferral
Water/sewer, building
permit or other fees waived
in part or whole or deferred
until occupancy/sale to
reduce upfront cost to
build.
General funds or other
source need to cover cost if
fees waived or reduced
and/or for the deferral
period.
1 Update Affordable Housing
Ordinance to reflect how fee
waiver is implemented.
1
2 Structure fees to incentivize
desired development (e.g.
lower fees for smaller
ownership and for-rent units,
etc.).
2
3 Explore options to cover the
cost of reduced fees – general
fund, tax increment financing
(TIF), etc.
3
4 Create an upfront schedule of
all fees for developments –
predictability.
4
5 Ensure homes benefit the
community (deed restricted) if
get reduced fees.
5
10 Co-op Housing
Common ownership and
management of purpose-
built communities. As
related to preserving
mobile home parks,
residents form a corporate
entity that purchases the
park, placing the
responsibility of park
maintenance in the hands
of the residents. Residents
can self- organize to
purchase or seek
assistance. NeighborWorks
Montana can provide
assistance in Montana.
1 Explore as a means to
preserve mobile home parks.
1
2 Reach out to NeighborWorks
Montana through HRDC
2
3 Explore how the program
works.
3
4 Verify that it can work in
Bozeman/with Bozeman area
mobile home parks, including
evaluating parks and residents
for interest and feasibility.
4
11 Land Banking
Acquiring land for eventual
community housing
development. Acquisition
may occur through
purchase, trades, life
estates, donation (non-
profits), in-lieu
requirements.
1 Establish criteria to prioritize
sites(s).
1
2 Inventory potential
opportunities.
2
3 Understand constraints. 3
4 Include vacant, underutilized,
redevelopment.
4
399
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
12 Employer Assisted Housing
Employers providing
housing support to
employees. May be direct
employee support (help
with housing search, down
payment, rent/mortgage,
relocation) or master
lease/buy/construct units.
1 Need education of and
outreach to employers –
present options and educate
on tools available.
1
2 Hold symposium/education
session. May be led by
Chamber, Prospera,
employers that currently have
assisted housing programs in
place, or another.
2
3 Gauge interest in options from
employers. Use information
from the employer survey
from the Needs Assessment as
a starting point.
3
4 Find leaders to carry forward 4
13 Removal of Regulatory
Barriers
Updating/modifying code
provisions and procedures
that impair community
housing development. For
example, ensuring codes
are consistent, simplifying
applications. Complete
code review and rewrite
might be required.
1 Implement a biannual code
revision process to make it
easier for boards, committees,
development professionals
and the general public to
suggest revisions to address
current and future community
housing needs.
1
2 Ensure process is predictable,
transparent, useful and that
codes produce what we want.
2
3 Engage third party to edit,
reorganize and reformat the
UDC to be more streamlined,
functional and user friendly.
Remove duplicative language
and inconsistencies.
3
4 Engage third party to review
all city codes, regulations and
policies to identify disconnects
and recommend methods to
resolve.
4
5 Explore revisiting Engineering
Design Standards and
Specifications Policy to allow
more compact development
standards.
5
6 Explore adding code section
for Moveable Tiny Homes.
Coordinate at the state level.
6
400
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
14 Accessory Dwelling Units
(ADU)
An ADU is a second smaller
home sharing a lot with a
single-family or townhome
residence. Some examples
include an apartment over
a garage, a tiny house in
the backyard, or a
basement apartment.
Accessory dwellings that
may be restricted for use by
residents and employees
require compliance
monitoring.
1 Explore removing special use
permit requirement for a
detached ADU in R-1 zone to
allow b-right.
1
2 The city has taken steps to
decrease the cost of ADUs,
educate the community about
these cost reductions and
explore opportunities for
additional reductions (i.e.
permitting, impact fees,
parking regulations).
2
3 Make pre-engineered ADU
designs available for free –
only a building permit needed
to construct.
3
4 Deed-restrict units that
receive an incentive/public
break to build to ensure
community benefit – e.g.,
require long term rental,
resident/employee
occupancy.
4
15 Low Income Housing Tax Credits (LIHTC)
A federal program that
creates an incentive to
finance rental housing for
households below 60%
AMI.
1 Work with the “Complete
Count Committee” to assist
with the 2020 census count.
An “Entitlement Community”,
or city with a population of
50,000, receives increased and
direct tax credit allocations.
1
2 Get Bozeman representation
on the Montana Board of
Housing.
2
3 Align regulations and zoning
with Qualified Census Tracts
to encourage LIHTC
development.
3
401
Action Strategy Actions Proposed In The Plan Actions Amended By
Commission
16 Taxes Dedicated to
Housing
Sales, property, lodging,
short-term rental fee, real
estate transfer, excise tax,
vacancy tax, unit
demolition or conversion
fees. Voter approval
required in most states.
Revenue stream can be
used for most housing-
related activities. Approval
requires extensive public
education.
1 Pursue either a mill levy or
bond issue.
1
2 Coordinate with a
comprehensive education
campaign.
2
3 Consider citywide Special
District.
3
4 Evaluate what entity should
hold funds collected (City,
new Housing Trust fund, etc.).
4
5 Evaluate who should
administer allocation of funds,
taking into consideration
accountability requirements
with the use public funds.
5
6 Establish allocation criteria
that considers: scoring
system, leverages funds,
aligns with income targets,
requires permanent
affordability.
6
17 Commercial Linkage
Requires new commercial
development to provide
housing or pay fees for a
portion of employees
needed to fill the new jobs
generated by the
development.
Nexus study is required to
determine the mitigation
requirement. Fluctuates
with building activity.
1 Conduct Nexus Study to
evaluate the potential impact
of linkage on community
housing and businesses.
1
2 Consider the impact on
business growth and the
impact on the community of
doing nothing (status quo).
2
3 Identify peer communities and
evaluate what has worked and
not worked: learn from
others.
3
4 Make it easy for employers to
build housing today if they
want to: e.g. continue to
encourage residential above
commercial or on same lot.
4
CITIZEN ADVISORY BOARDS: The Community Affordable Housing Advisory Board
(CAHAB) was represented as one member on the Working Group and discussed the action Plan
process from June through October in their monthly meetings. CAHAB intends to discuss the
completed Plan in their meeting on November 13, 2019. The agenda for this meeting lists an
action item regarding a motion to approve the forwarding of a letter of support to the City
Commission. Staff will ensure the Commission receives any such letter.
402
WHAT COMES NEXT: Appendix A, attached, contains commentary from staff related to
the action strategies and efforts currently underway. Additional efforts outlined by the Plan come
with various needed resources. Some actions will need support from community partners while
others will require staff efforts or City funding. Based on direction from the Commission, staff
will build a work plan to categorize and prioritize future efforts.
PUBLIC COMMENT: Staff has received 4 public comments as of November 7, 2019.
Two of the public comments were in general support of the Plan. One comment letter focused on
the aging community and design features aimed at the needs of all ages and abilities. The fourth
letter suggested taxation on second home owners Bozeman. Public comments sent to the
City’s agenda@bozeman.net email have been archived and are available for public review. A
folder with public comments can be accessed via the link below. Any persons wishing to submit
public comment can do so up until 3:00 PM the day of the public city commission meeting, or
done in person at the meeting. All comments received after 3:00 PM will be distributed and
archived, but it may be the following day. Comments submitted at the meeting will be added to
the folders or incorporated into the minutes.
Public Comment Link
UNRESOLVED ISSUES: None
ALTERNATIVES: 1. Approve and adopt the plan as presented;
2. Approve plan as presented with modifications to individual Objectives, Action Strategies
or individual Proposed Actions;
3. As determined by the Commission FISCAL EFFECTS: The Action Plan recommends several strategies that will require
significant expenditures from the Workforce Housing fund for projects, staff time, and ongoing
planning/co-ordination of community housing.
ATTACHMENTS: - Appendix A
- Resolution 5081
- Community Housing Action Plan
403
APPENDIX A:
Many of the actions identified in the Community Housing Action Plan are already being worked
on by City staff and/or community partners. The table below is an attempt to communicate these
efforts. Items left blank are not currently in staffs work plan and, if adopted, would be new or additional efforts moving forward.
I have marked actions that have more than trivial financial ramifications with a dollar sign ($).
One dollar sign would be a minor cost and three dollar signs indicate a fairly expensive
proposition.
I have noted items that require legal review by a simple (Legal) in the comments.
Action Strategy Actions Proposed In The Plan Staff Response
1 General Funds
An annual or occasional
budget allocation primarily
to support staffing, pre-
development and gap
financing for community
housing.
1 Maintain in the short-term until
broad-based, reliable funding
source is secured.
1 3 mil.'s slated for FY21
Budget.
2 Establish allocation criteria to
inform use of the City’s
Affordable Housing Fund.
2 Staff is currently working on
this and will involve CAHAB.
(Legal)
2 Tax Increment Financing
(TIF)
Allows a local government or
redevelopment authority to
generate revenues for
properties targeted for
improvement. As
improvements are made
within the district, and as
property values increase, the
incremental increases in
property tax revenue are
earmarked for a fund.
Expenditures of TIF-
generated revenues are
subject to certain
restrictions and must be
spent within the district.
1 Use of TIF to support
community housing needs to
be explored at the local and
state levels.
1 CD and ED Staff are
discussiong the implications
and perameters of this action.
(Legal)
2 Downtown is considering the
use of TIF to incentivize ADUs
and 1-bedroom units and/or
units that have long-term
affordability assurances.
2 The DBID has released a draft
program. Staff and CAHAB are
commenting.
3 Community Land Trust
Community nonprofit owns
land, develops housing and
provides long-term
stewardship for permanent
affordability through long-
term ground leases.
Typically, single family or
townhomes for moderate
and middle-income
households.
1 Consider establishing a
Community Land Trust (CLT)
organization that has the
capability to take on
management responsibilities of
permanent restrictions.
1 HRDC in cooperation with the
Trust for Public Lands are
currently exploring this
option. Other partners within
the state esist and
conversations are ongoing.
(Legal)
2 Coordinate with existing
housing providers with CLT
homes to increase efficacy and
avoid redundancy.
2 Discussiona with potential
program partners are
ongoing.
404
Action Strategy Actions Proposed In The Plan Staff Response
4 Deed Restricted Housing
(Permanent)
Dwelling units permanently
restricted by occupancy
(local employee/resident),
income level, and with
rent/resale restrictions to
retain affordability in rising
and high cost housing
markets.
1 Transition to a permanent
restriction when publicly
subsidized community housing
units are created.
1 (Legal)
2 Align with other policies: fee
waivers and incentives.
2 (Legal)
3 Create a permanent deed
restriction that balances long-
term affordability with wealth
creation.
3 (Legal)
4 Structure the eligibility and
occupancy criteria to ensure
“fairness.”
4 (Legal)
5 Increase management capacity
- begin by evaluating existing
capacity, considering
adjustments, and/or
establishing a new entity, such
as a Housing Authority or
Community Land Trust.
5 $$$ (Legal)
6 Emphasize customer service,
such as one point of contact.
6
5 Inclusionary Zoning
Requires that new
residential subdivisions and
PUD’s include/build homes
that are deed restricted for
community housing.
1 Revisit Affordable Housing
Ordinance: evaluate what has
worked and not.
1 Evaluation is ongoing. The
current ordinance has a
limited scope and is
producing available units.
2 Apply to multi-family
development, as well as single-
family: ownership and rental.
2 This action is mandated
within the City's Strategic
Plan. (Legal)
3 Incorporate incentives along
with housing development
requirement.
3 (Legal)
4 Consider addressing up to
120% AMI for ownership.
4 $$$
5 Require deed restrictions to be
permanent.
5 (Legal)
6 Ensure consistency with other
development codes.
6 This effort is ongoing. (Legal)
6 Public/Private/ Institutional Partnerships
Public/institutional
organizations partnering
with the private sector for
development expertise to
build community housing on
publicly owned site. May be
vacant or under-utilized
land. May also include
institutional properties.
1 Establish criteria to prioritize
site(s).
1 Efforts are in process.
2 Understand partner and site
constraints.
2 Efforts are in process. (Legal)
3 Facilitate partnerships. 3 Efforts are in process.
4 Issue Request for Proposals
with desired community
housing outcomes.
4 Efforts are in process. (Legal)
5 Keep prioritized list for future
housing opportunities.
5 Efforts are in process.
405
Action Strategy Actions Proposed In The Plan Staff Response
7 Homebuyer Assistance
Down payment assistance of
grants or second mortgages
for qualified buyers. Can be
used for restricted or market
units.
1 Build upon existing program
through the City, HRDC, Habitat
for Humanity.
1 This effort is ongoing.
2 Seek local funding to serve
households up to 120% AMI.
2
3 Community education
program – financial literacy and
assistance options.
3 $
4 Work with employers to assist
employees. Technical
assistance, loan/grant options,
administration, etc.
4 $
8 Permanent Supportive Housing (PSH) and Transitional
PSH pairs housing with
supportive services to
transition chronically
homeless into home
security.
Transitional housing
provides temporary
assistance to bridge the gap
from homelessness to
permanent housing.
1 Inform developers of PSH
incentives/opportunities.
1
2 Identify needs (HRDC). 2
3 Form housing group to
advocate for more state funds.
3
4 Implement FUSE model to
more efficiently and effectively
provide services (HRDC).
4 This effort is ongoing.
9 Fee Waivers / Deferral
Water/sewer, building
permit or other fees waived
in part or whole or deferred
until occupancy/sale to
reduce upfront cost to build.
General funds or other
source need to cover cost if
fees waived or reduced
and/or for the deferral
period.
1 Update Affordable Housing
Ordinance to reflect how fee
waiver is implemented.
1 Efforts are in process. (Legal)
2 Structure fees to incentivize
desired development (e.g.
lower fees for smaller
ownership and for-rent units,
etc.).
2 (Legal)
3 Explore options to cover the
cost of reduced fees – general
fund, tax increment financing
(TIF), etc.
3 $ (Legal)
4 Create an upfront schedule of
all fees for developments –
predictability.
4
5 Ensure homes benefit the
community (deed restricted) if
get reduced fees.
5 (Legal)
406
Action Strategy Actions Proposed In The Plan Staff Response
10 Co-op Housing
Common ownership and
management of purpose-
built communities. As
related to preserving mobile
home parks, residents form
a corporate entity that
purchases the park, placing
the responsibility of park
maintenance in the hands of
the residents. Residents can
self- organize to purchase or
seek assistance.
NeighborWorks Montana
can provide assistance in
Montana.
1 Explore as a means to preserve
mobile home parks.
1 This tool is currently available.
2 Reach out to NeighborWorks
Montana through HRDC
2
3 Explore how the program
works.
3
4 Verify that it can work in
Bozeman/with Bozeman area
mobile home parks, including
evaluating parks and residents
for interest and feasibility.
4 This tool is currently available.
11 Land Banking
Acquiring land for eventual
community housing
development. Acquisition
may occur through
purchase, trades, life
estates, donation (non-
profits), in-lieu
requirements.
1 Establish criteria to prioritize
sites(s).
1
2 Inventory potential
opportunities.
2
3 Understand constraints. 3 (Legal)
4 Include vacant, underutilized,
redevelopment.
4
12 Employer Assisted Housing
Employers providing housing
support to employees. May
be direct employee support
(help with housing search,
down payment,
rent/mortgage, relocation)
or master
lease/buy/construct units.
1 Need education of and
outreach to employers –
present options and educate on
tools available.
1
2 Hold symposium/education
session. May be led by
Chamber, Prospera, employers
that currently have assisted
housing programs in place, or
another.
2
3 Gauge interest in options from
employers. Use information
from the employer survey from
the Needs Assessment as a
starting point.
3
4 Find leaders to carry forward 4
407
Action Strategy Actions Proposed In The Plan Staff Response
13 Removal of Regulatory
Barriers
Updating/modifying code
provisions and procedures
that impair community
housing development. For
example, ensuring codes are
consistent, simplifying
applications. Complete code
review and rewrite might be
required.
1 Implement a biannual code
revision process to make it
easier for boards, committees,
development professionals and
the general public to suggest
revisions to address current
and future community housing
needs.
1 This effort is underway
2 Ensure process is predictable,
transparent, useful and that
codes produce what we want.
2 (Legal)
3 Engage third party to edit,
reorganize and reformat the
UDC to be more streamlined,
functional and user friendly.
Remove duplicative language
and inconsistencies.
3 $$$ (Legal)
4 Engage third party to review all
city codes, regulations and
policies to identify disconnects
and recommend methods to
resolve.
4 $$$ (Legal)
5 Explore revisiting Engineering
Design Standards and
Specifications Policy to allow
more compact development
standards.
5 $$ (Legal)
6 Explore adding code section for
Moveable Tiny Homes.
Coordinate at the state level.
6 (Legal)
14 Accessory Dwelling Units
(ADU)
An ADU is a second smaller
home sharing a lot with a
single-family or townhome
residence. Some examples
include an apartment over a
garage, a tiny house in the
backyard, or a basement
apartment. Accessory
dwellings that may be
restricted for use by
residents and employees
require compliance
monitoring.
1 Explore removing special use
permit requirement for a
detached ADU in R-1 zone to
allow by-right.
1 This effort is underway and
will be in front of the
Commission for the April
2020 UDC change cycle.
2 The city has taken steps to
decrease the cost of ADUs,
educate the community about
these cost reductions and
explore opportunities for
additional reductions (i.e.
permitting, impact fees,
parking regulations).
2
3 Make pre-engineered ADU
designs available for free – only
a building permit needed to
construct.
3 $
4 Deed-restrict units that receive
an incentive/public break to
build to ensure community
benefit – e.g., require long
term rental, resident/employee
occupancy.
4 (Legal)
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Action Strategy Actions Proposed In The Plan Staff Response
15 Low Income Housing Tax Credits (LIHTC)
A federal program that
creates an incentive to
finance rental housing for
households below 60% AMI.
1 Work with the “Complete
Count Committee” to assist
with the 2020 census count. An
“Entitlement Community”, or
city with a population of
50,000, receives increased and
direct tax credit allocations.
1 Efforts are underway.
2 Get Bozeman representation
on the Montana Board of
Housing.
2
3 Align regulations and zoning
with Qualified Census Tracts to
encourage LIHTC development.
3
16 Taxes Dedicated to Housing
Sales, property, lodging,
short-term rental fee, real
estate transfer, excise tax,
vacancy tax, unit demolition
or conversion fees. Voter
approval required in most
states. Revenue stream can
be used for most housing-
related activities. Approval
requires extensive public
education.
1 Pursue either a mill levy or
bond issue.
1 (Legal)
2 Coordinate with a
comprehensive education
campaign.
2
3 Consider citywide Special
District.
3 (Legal)
4 Evaluate what entity should
hold funds collected (City, new
Housing Trust fund, etc.).
4 (Legal)
5 Evaluate who should
administer allocation of funds,
taking into consideration
accountability requirements
with the use public funds.
5 (Legal)
6 Establish allocation criteria that
considers: scoring system,
leverages funds, aligns with
income targets, requires
permanent affordability.
6
17 Commercial Linkage
Requires new commercial
development to provide
housing or pay fees for a
portion of employees
needed to fill the new jobs
generated by the
development.
Nexus study is required to
determine the mitigation
requirement. Fluctuates
with building activity.
1 Conduct Nexus Study to
evaluate the potential impact
of linkage on community
housing and businesses.
1 $$
2 Consider the impact on
business growth and the
impact on the community of
doing nothing (status quo).
2
3 Identify peer communities and
evaluate what has worked and
not worked: learn from others.
3
4 Make it easy for employers to
build housing today if they
want to: e.g. continue to
encourage residential above
commercial or on same lot.
4 All commercial zones
currently allow residential
uses. Inclusion of residential
uses are always encouraged.
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Page 1 of 3
RESOLUTION NO. 5081
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, ACCEPTING THE 2019 COMMUNITY HOUSING ACTION PLAN AND
ESTABLISHING IT AS A BASIS FOR FORMULATION OF HOUSING
IMPLEMENTATION ACTIONS.
WHEREAS, the City of Bozeman has recognized housing, including affordable housing,
as a community need in its growth policy since 1972; and
WHEREAS, the City of Bozeman has adopted a strategic plan that identifies affordable
housing as one area of community priority; and
WHEREAS, the City of Bozeman is committed to data and fact based decision making;
and
WHEREAS, as an aid to, and in preparation for, an updated affordable housing action
plan the City contracted with WSW Consulting and Navigate LLC to conduct a housing needs
assessment to document existing conditions and needs for housing; and
WHEREAS, the City Commission adopted Resolution 5024 on March 11, 2019 accepting
an updated housing needs assessment and directing that it be the basis for the creation of an
affordable housing action plan where housing is addressed as a community priority and in balance
with other established community priorities; and
WHEREAS, the City received a community housing action plan document in October
2019 that identifies 17 potential strategies for creation of additional housing in the community.
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Resolution 5081, Acceptance of the 2019 Community Housing Action Plan
Page 2 of 3
WHEREAS, the City’s implementation of the community housing action plan requires
additional research, evaluation, and funding development for individual strategies.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, that:
Section 1
That the 2019 Community Housing Action Plan is accepted by the City Commission as a
document of the City.
Section 2
The City of Bozeman will begin the implementation process by evaluating, researching, and
determining required actions and consequences of individual strategies for affordable housing where
housing is addressed as a community priority and in balance with other established community
priorities.
Section 3
That the 2019 Community Housing Action Plan is attached to this resolution as Exhibit A.
Section 4
This resolution is effective upon passage.
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Resolution 5081, Acceptance of the 2019 Community Housing Action Plan
Page 3 of 3
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 18th day of November, 2019.
____________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
____________________________________
GREG SULLIVAN
City Attorney
412
Bozeman Community Housing Action Plan
Working together to strengthen community by
increasing the inventory of quality homes
across the spectrum of needs.
October 16, 2019
Prepared by:
Christine Walker, Navigate Consulting | Wendy Sullivan, WSW Consulting | Seana Doherty, Freshtracks Collaboration
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Table of Contents
EXECUTIVE SUMMARY ....................................................................................................................................................................................... 1
BOZEMAN COMMUNITY HOUSING ACTION PLAN .............................................................................................................................................. 3
1. OBJECTIVES ........................................................................................................................................................................................................... 5
2. HOUSING ACTION STRATEGIES .................................................................................................................................................................................. 6
Timeline for Implementation ............................................................................................................................................................................. 7
Roles and Responsibilities .................................................................................................................................................................................. 9
Action Strategy Descriptions ............................................................................................................................................................................ 10
3. CORE COMPONENTS ............................................................................................................................................................................................. 22
APPENDIX A – ACTION PLAN PROCESS, DEFINITIONS AND ACKNOWLEDGEMENTS ........................................................................................ A-1
COMMUNITY HOUSING ACTION PLAN PROCESS .................................................................................................................................................................. 1
DEFINITIONS ................................................................................................................................................................................................................. 3
ACKNOWLEDGEMENTS ................................................................................................................................................................................................... 4
FRONT COVER PHOTO BY ANDY AUSTIN, VIEW OF SPANISH PEAK FROM BOZEMAN
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Executive Summary
The Bozeman Community Housing Action Plan outlines a partnership framework to address community housing in Bozeman over at
least the next five years. Community Housing is defined as:
Homes that those who live and/or work in Bozeman can afford to purchase or rent. This includes
apartments, townhomes, condominiums, emergency shelters, accessory dwelling units, mobile homes
and single-family homes – all dwelling types – serving the entire spectrum of housing needs.
The Plan presents a set of actions that address a range of community housing needs. The 2019 City of Bozeman Community Housing
Needs Assessment study showed that between 5,400 to 6,340 housing units are needed over the next five years to address the
current housing shortfall for residents and the workforce and to keep up with job growth. About 60% of these units need to be
priced below-market to meet the full range of community housing needs. This includes a mix of housing unit types to diversify
options for residents, with prices ranging primarily between $160,000 and $400,000 for ownership and $500 to $1,200 per month
for rent. This plan was developed to begin addressing identified community housing needs and to create a lasting framework for
implementation that will evolve as the community and its housing needs continue to evolve.
The partnership framework for accelerating community housing in Bozeman is based on the recognition that no one entity can solve
the local housing challenges – it takes a community to build a community.
Utilizing the 2019 City of Bozeman Community Housing Needs Assessment as a base to understand the housing needs of residents
and employees in Bozeman, a local Housing Working Group, comprised of Bozeman community stakeholders, with input from the
public and technical assistance from consultants, created this Plan. Strategies to meet housing needs have been identified and
prioritized; roles and responsibilities have been assigned. A timeline for achieving priority strategies has also been established,
recognizing that this Plan will have life beyond this timeline and will continue to evolve and meet changing community housing
needs over the long term. By including various community members in its implementation (employers, institutions, community
organizations, and stakeholders), the Plan acknowledges that community involvement is necessary for the Plan’s success.
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Objectives established in the Plan that will continue to be tracked to ensure progress is made, include:
• Ensuring community housing serves the full range of incomes without losing sight of safety net programs for extremely low
income and homeless families. This includes safety net rentals below 30% AMI (about $20,000 per year), additional resident
and employee rentals up to 80% AMI (about $55,000 per year), and ownership housing up to 150% AMI (about $104,000 per
year).
• Producing community housing at a rate that exceeds, or at least matches, job growth so that new employees can find homes.
• Striving to produce community housing at a rate that matches the spectrum of community housing needs, while also
preserving what we have through a target of no net loss of existing community housing stock below 80% AMI.
The following graphic summarizes the strategies Bozeman will pursue over the next five years. The primary affordability level that
each strategy will address is illustrated below and represents the provision of a diversity of housing for community members across
multiple income levels and in various life stages.
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Bozeman Community Housing Action Plan Bridge
5800 UNITS
NEEDED BY 2025
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Bozeman Community Housing Action Plan
This section presents the Bozeman Community Housing Action Plan. This Plan will focus the community housing partnership
framework and increase the ability to meet community housing needs in Bozeman.
The primary components of the Plan include:
1. Objectives. Plan objectives are established to help monitor progress. Objectives should be revisited as community housing
needs evolve.
2. Action Strategies. The action strategies represent the prioritized strategies that have been developed to meet housing
objectives. The action strategies include defined roles and responsibilities and a timeline for achievement. This is the Action
part of the Plan.
Because not every strategy can be implemented at once, the sequence of strategies were prioritized by evaluating current
partner capacities and resources, understanding that some strategies may need to be implemented before others can be
successful, and recognizing that others may have current political or legal limitations that will take more time. This
prioritization is defined in more detail in the Action Strategy section.
3. Core Components. The core components represent the core operational needs to implement strategies, administer an
inventory of community housing, and track the progress of the Action Plan. This structure is needed for successful
implementation and to ensure continuation of the partnership framework to increase the availability of community housing
in Bozeman.
The Appendix contains a summary of the Action Plan process, defined terms used in this Plan, and acknowledgements of Plan
participants.
This Plan is also accompanied by Technical Documentation, which contains important information for Plan implementation. The
Technical Documentation contains detail on each housing action strategy. The Technical Documentation should be referenced by
implementing parties to understand the detailed background behind the formation of each strategy, best practices for each strategy,
other communities implementing the strategy, and implementation steps and roles specific to Bozeman.
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1. Objectives
The Bozeman Community Housing Action Plan presents a set of actions that address a range of community housing needs. The 2019
City of Bozeman Community Housing Needs Assessment study showed that between 5,400 to 6,340 housing units are needed over
the next five years to address the current housing shortfall for residents and the workforce and to keep up with job growth. About
60% of these units need to be priced below-market to meet the full range of community housing needs. This includes a mix of
housing unit types to diversify options for residents, with prices ranging primarily between $160,000 and $400,000 for ownership
and $500 to $1,200 per month for rent. As community housing needs change, the Housing Action Plan will evolve accordingly.
The actions identified in this Plan are designed to help Bozeman improve the availability of community housing, defined as:
Homes that those who live and/or work in Bozeman can afford to purchase or rent. This includes
apartments, townhomes, condominiums, emergency shelters, accessory dwelling units, mobile homes
and single-family homes – all dwelling types – serving the entire spectrum of housing needs.
The following objectives for meeting community housing needs will be tracked to monitor progress and revisited as community
housing needs evolve:
• Income Levels. Community housing should serve the full range of incomes without losing sight of safety net programs. The
primary focus should be on:
o Ownership housing from 80% to 120% AMI, while also incentivizing the production of missing middle housing up to
150% AMI;
o Additional resident and employee rentals up to 80% AMI; and
o Safety net rentals below 30% AMI.
• Jobs-Housing Relationship. Produce community housing at a rate that exceeds, or at least matches, job growth at income
levels and ratios being earned by Bozeman employees.
• Community Housing Built and Preserved. Strive to produce community housing at a rate that matches the spectrum of
community housing needs, while also preserving what we have through a target of no net loss of existing community housing
stock.
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2. Housing Action Strategies
Recognizing that there is no silver bullet – that no one housing strategy can do it all – the Housing Working Group evaluated about
40 different methods that could be used to address community housing needs in Bozeman. The reviewed options were based on
strategies that have been used in high-amenity communities throughout the nation to address a variety of community housing
needs. This process is described in more detail in the Appendix.
Of the different options reviewed, the Working Group, with input from the public, housing needs assessment and technical
assistance from the consultants, prioritized 17 of the options to implement within the next five years. Prioritization was required
because neither the City nor the implementing partners have the capacity or resources to implement every strategy at once, nor
would every strategy necessarily be effective in Bozeman. The other options are not lost, however. As the City and partners expand
their capacity and successes, more strategies can be brought into the housing program to increase the impact of the actions taken.
The 17 strategies identified for implementation over the next five years cover a range of options and target a variety of incomes and
housing types, ensuring that community housing needs are being addressed from multiple angles. This includes:
Funding: How do we pay for it?
Programs: How do we get people into homes?
Regulations: How do we make it happen?
Incentives: How do we make it easier?
Partnerships: How do we work together?
Preservation: How do we keep what we create?
The graphic on page two of this Plan (Executive Summary – Bozeman Community Housing Action Plan Bridge) summarizes the
housing strategies that Bozeman will implement over the next five years and the primary affordability level that each strategy will
address.
This section provides more detail on the developed strategies, to-date, as follows:
• Timeline for implementation: Shows the anticipated schedule for implementation for each community housing strategy over
the next five years.
• Roles and responsibilities: Identifies the Bozeman entities, organizations or stakeholders that will be responsible for
implementing each strategy. Lead and supporting roles are identified.
• Action strategy descriptions: Provides more detail on each of the 17 housing strategies, presented in the order shown on the
timeline. A definition is provided for each strategy, along with a summary of the proposed action steps. A summary of non-
prioritized strategies is also provided, many of which will be revisited for potential addition to the Action Plan as the housing
program matures, capacity is added, and community needs change.
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Timeline for Implementation
The 17 housing strategies identified for implementation within the next five years are shown on the timeline below. Strategies will
be monitored and modified as needed to ensure effectiveness. The bottom of the timeline shows existing housing strategies that will
continue and that will also be monitored as part of this Plan.
Strategies on the five-year timeline were identified as being “easy,” “medium,” and “hard” to implement, meaning:
• “Easy” strategies utilize existing capacity, organizations and momentum in Bozeman. This includes tweaking what already
exists to focus more specifically on housing and borrowing on current programs that are already under development. These
strategies are also perceived as having good political and community support.
• “Medium” strategies may require additional steps to complete, including more capacity or consultants; additional public
outreach and input; new partnerships and/or more funding to ensure success.
• “Hard” strategies will require a combination of additional capacity, expertise and possibly local financing; may have complex
implementation or approval systems; and may have varied political or public support requiring additional research and
education. State statutory limitations may be in place for some, requiring creative approaches or possibly legislative changes
to implement.
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Timeline of Priority Action Strategies
Abbreviations: HRDC = Human Resources Development Council
Strategies Type
General Funds Funding
Tax Increment Financing (TIF)Funding
Community Land Trust Preservation
Deed Restricted Housing (permanent)Preservation
Inclusionary Zoning Regulation
Public/Private/Institutional Partnerships Partnership/Land
Home Buyer Assistance Program
Program
Removal of Regulatory Barriers Incentive/Regulation
Accessory Dwelling Units (ADU)Incentive
Fee Waiver/Deferral Incentive
Co-op Housing (mobile home parks)Preservation Key:
Employer Assisted Housing Program Action Phase
Land Banking Partnership/Land On-going Phase
Taxes Dedicated to Housing Funding
Low Income Housing Tax Credits (LIHTC)Funding
Flexible Development Standards Incentive City changes in effect; evaluation
Short-Term Rental Regulations Regulation City adopted 2017; monitor
Housing Rehabilitation and Weatherization Preservation Habitat for Humanity; HRDC
Self Help Build Program Habitat for Humanity
Senior Housing Program Various
Funding HRDC, City
Easy- exists; Medium-redirect for housing
1 to 2 years
Short
Easy-current; modify
Mid Long
3 to 5 years 5+ years
Medium
Medium
Hard
Medium
Hard
Hard
Permanent Supportive Housing (PSH) and Transitional
Federal and State Grants/Loans – CDBG. HOME,
USDA/Rural Development, Section 8
Easy-in process
Medium
Medium-modifications
Medium
Hard
Hard
Hard
Hard
On-going programs - to continue
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Roles and Responsibilities
The Housing Working Group recognized that utilizing partners that are already working on or that have expertise with various
identified strategies have a role either leading or supporting identified actions. This includes the City, HRDC, Habitat for Humanity,
primary employers and others working with or alongside each other to further housing goals in the community. Joint
implementation provides the ability to share resources and capacity and leverage successes for a more robust and effective housing
program. More specific involvement for each strategy is summarized in the Technical Documentation for this Plan.
Matrix of Responsibilities: Action Strategies
Strategies are sorted in the same order of the timeline presented above.
Abbreviations: City = elected officials, advisory boards, and staff; HRDC = Human Resources Development Council; FUSE = Frequent Users Systems
Engagement; Habitat = Habitat for Humanity; Chamber = Bozeman Chamber of Commerce; Prospera = Prospera Business Network; MSU = Montana State
University; TBD = To Be Determined
STRATEGIES Type Lead Support
General Funds Funding City TBD
Tax Increment Financing (TIF)Funding City TIF Districts
Community Land Trust Preservation HRDC/Habitat HRDC/Habitat
Deed Restricted Housing (permanent)Preservation City HRDC/Habitat
Inclusionary Zoning Regulation City 3rd party expert
Public/Private/Institutional Partnerships Partnership/Land School district City support/convene potential
partners; County; Habitat
Home Buyer Assistance Program City/HRDC Prospera/Chamber
Permanent Supportive Housing (PSH) and Transitional Program HRDC FUSE Team, hospital
Fee Waiver/Deferral Incentive City TBD
Co-op Housing (mobile home parks)Preservation HRDC Bozeman Cohousing
Land Banking Partnership/Land City TBD
Employer Assisted Housing Program Prospera City, Habitat
Removal of Regulatory Barriers Incentive/Regulation City 3rd party expert
Accessory Dwelling Units (ADU)Incentive City MSU
Low Income Housing Tax Credits (LIHTC)Funding HRDC City
Taxes Dedicated to Housing Funding City Community/philanthropy (non profit)
Commercial Linkage Regulation City TBD
Flexible Development Standards Incentive
Short-Term Rental Regulations Regulation
Housing Rehabilitation and Weatherization Preservation
Self Help Build Program
Senior Housing Program
Federal and State Grants/Loans – CDBG. HOME,
USDA/Rural Development, Section 8 Funding
On-going programs - to continue
HRDC, City
City changes in effect; evaluation
City adopted 2017; monitor
Habitat for Humanity; HRDC
Habitat for Humanity
Various
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Action Strategy Descriptions
This section provides a short summary of the Action Strategies, with more detailed information provided in the Technical
Documentation for this Plan. Strategies are color-coded based on the primary category type shown in the timeline:
Funding: Blue
Partnerships: Purple
Programs: Red
Regulations: Orange
Incentives: Yellow
Preservation: Green
Strategies are summarized as follows:
• Priority Action Strategies: Each priority action strategy is summarized and presented in order of implementation. A definition
is provided for each strategy, along with a summary of the proposed actions.
• On-Going Strategies: Each strategy that is on-going, meaning they are functioning and not currently a priority for additional
changes or action at this time, are summarized. This includes the definition of the strategy, its current status and comments
received.
• Potential Strategies for Future Consideration: Strategies that were evaluated, but not yet prioritized for implementation, are
summarized. This includes the definition of the strategy, along with comments from the public and Housing Working Group.
Note that the strategies with a (*) indicate that the program is already in the place.
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Bozeman Action Plan Strategies
General Funds*An annual or occasional budget
allocation primarily to support
staffing, pre-development and
gap financing for community
housing.
• Maintain in the short-term until broad-based, reliable funding source is
secured.
• Establish allocation criteria to inform use of the City’s Affordable Housing
Fund.
Tax Increment
Financing (TIF)*
Allows a local government or
redevelopment authority to
generate revenues for properties
targeted for improvement. As
improvements are made within
the district, and as property
values increase, the incremental
increases in property tax
revenue are earmarked for a
fund. Expenditures of TIF-
generated revenues are subject
to certain restrictions and must
be spent within the district.
• Use of TIF to support community housing needs to be explored at the local
and state levels.
• Downtown is considering the use of TIF to incentivize ADUs and 1-bedroom
units and/or units that have long-term affordability assurances.
• Considerations:
o More TIF for housing means less money is available for other
community priorities.
o Potential challenges with state regulations and use for housing.
o May be vulnerable at the state – care in crafting.
o The establishment of any new TIF districts should balance competing
community funding priorities.
Community Land
Trust*
Community nonprofit owns land,
develops housing and provides
long-term stewardship for
permanent affordability through
long-term ground leases.
Typically, single family or
townhomes for moderate and
middle-income households.
• Consider establishing a Community Land Trust (CLT) organization that has
the capability to take on management responsibilities of permanent
restrictions.
• Coordinate with existing housing providers with CLT homes to increase
efficacy and avoid redundancy.
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Deed Restricted
Housing
(Permanent)
Dwelling units permanently
restricted by occupancy (local
employee/resident), income
level, and with rent/resale
restrictions to retain affordability
in rising and high cost housing
markets.
• Transition to a permanent restriction when publicly subsidized community
housing units are created.
• Align with other policies: fee waivers and incentives.
• Create a permanent deed restriction that balances long-term affordability
with wealth creation.
• Structure the eligibility and occupancy criteria to ensure “fairness.”
• Increase management capacity - begin by evaluating existing capacity,
considering adjustments, and/or establishing a new entity, such as a
Housing Authority or Community Land Trust.
• Emphasize customer service, such as one point of contact.
Inclusionary
Zoning*
Requires that new residential
subdivisions and PUD’s
include/build homes that are
deed restricted for community
housing.
• Revisit Affordable Housing Ordinance: evaluate what has worked and not.
• Apply to multi-family development, as well as single-family: ownership and
rental.
• Incorporate incentives along with housing development requirement.
• Consider addressing up to 120% AMI for ownership.
• Require deed restrictions to be permanent.
• Ensure consistency with other development codes.
Public/Private/
Institutional
Partnerships
Public/institutional organizations
partnering with the private
sector for development
expertise to build community
housing on publicly owned site.
May be vacant or under-utilized
land. May also include
institutional properties.
• Establish criteria to prioritize site(s).
• Understand partner and site constraints.
• Facilitate partnerships.
• Issue Request for Proposals with desired community housing outcomes.
• Keep prioritized list for future housing opportunities.
Homebuyer
Assistance*
Down payment assistance of
grants or second mortgages for
qualified buyers. Can be used for
restricted or market units.
• Build upon existing program through the City, HRDC, Habitat for Humanity.
• Seek local funding to serve households up to 120% AMI.
• Community education program – financial literacy and assistance options.
• Work with employers to assist employees. Technical assistance, loan/grant
options, administration, etc.
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Permanent
Supportive
Housing (PSH)
and
Transitional*
PSH pairs housing with supportive
services to transition chronically
homeless into home security.
Transitional housing provides
temporary assistance to bridge the
gap from homelessness to
permanent housing.
• Inform developers of PSH incentives/opportunities.
• Identify needs (HRDC).
• Form housing group to advocate for more state funds.
• Implement FUSE model to more efficiently and effectively provide services
(HRDC).
Water/sewer, building permit or
other fees waived in part or whole
or deferred until occupancy/sale
to reduce upfront cost to build.
General funds or other source
need to cover cost if fees waived
or reduced and/or for the deferral
period.
• Update Affordable Housing Ordinance to reflect how fee waiver is
implemented.
• Structure fees to incentivize desired development (e.g. lower fees for
smaller ownership and for-rent units, etc.).
• Explore options to cover the cost of reduced fees – general fund, tax
increment financing (TIF), etc.
• Create an upfront schedule of all fees for developments – predictability.
• Ensure homes benefit the community (deed restricted) if get reduced
fees.
Co-op Housing Common ownership and
management of purpose-built
communities. As related to
preserving mobile home parks,
residents form a corporate entity
that purchases the park, placing
the responsibility of park
maintenance in the hands of the
residents. Residents can self-
organize to purchase or seek
assistance. NeighborWorks
Montana can provide assistance in
Montana.
• Explore as a means to preserve mobile home parks.
• Reach out to NeighborWorks Montana through HRDC
o Explore how the program works.
o Verify that it can work in Bozeman/with Bozeman area mobile home
parks, including evaluating parks and residents for interest and
feasibility.
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Land Banking Acquiring land for eventual
community housing development.
Acquisition may occur through
purchase, trades, life estates,
donation (non-profits), in-lieu
requirements.
• Establish criteria to prioritize sites(s).
• Inventory potential opportunities.
• Understand constraints.
• Include vacant, underutilized, redevelopment.
Employer
Assisted Housing
Employers providing housing support
to employees. May be direct
employee support (help with housing
search, down payment,
rent/mortgage, relocation) or master
lease/buy/construct units.
• Need education of and outreach to employers – present options and
educate on tools available.
• Hold symposium/education session. May be led by Chamber, Prospera,
employers that currently have assisted housing programs in place, or
another.
• Next step:
o Gauge interest in options from employers. Use information from the
employer survey from the Needs Assessment as a starting point.
o Find leaders to carry forward
Updating/modifying code provisions
and procedures that impair
community housing development.
For example, ensuring codes are
consistent, simplifying applications.
Complete code review and rewrite
might be required.
• Implement a biannual code revision process to make it easier for boards,
committees, development professionals and the general public to suggest
revisions to address current and future community housing needs.
• Ensure process is predictable, transparent, useful and that codes produce
what we want.
• Engage third party to edit, reorganize and reformat the UDC to be more
streamlined, functional and user friendly. Remove duplicative language
and inconsistencies.
• Engage third party to review all city codes, regulations and policies to
identify disconnects and recommend methods to resolve.
• Explore revisiting Engineering Design Standards and Specifications Policy
to allow more compact development standards.
• Explore adding code section for Moveable Tiny Homes. Coordinate at the
state level.
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An ADU is a second smaller home
sharing a lot with a single-family or
townhome residence. Some examples
include an apartment over a garage, a
tiny house in the backyard, or a
basement apartment. Accessory
dwellings that may be restricted for
use by residents and employees
require compliance monitoring.
• Explore removing special use permit requirement for a detached ADU in
• R-1 zone to allow by-right.
• The city has taken steps to decrease the cost of ADUs, educate the
community about these cost reductions and explore opportunities for
additional reductions (i.e. permitting, impact fees, parking regulations).
• Make pre-engineered ADU designs available for free – only a building permit
needed to construct.
• Deed-restrict units that receive an incentive/public break to build to ensure
community benefit – e.g., require long term rental, resident/employee
occupancy.
Low Income
Housing Tax
Credits (LIHTC)*
A federal program that creates an
incentive to finance rental housing
for households below 60% AMI.
• Work with the “Complete Count Committee” to assist with the 2020 census
count. An “Entitlement Community”, or city with a population of 50,000,
receives increased and direct tax credit allocations.
• Get Bozeman representation on the Montana Board of Housing.
• Align regulations and zoning with Qualified Census Tracts to encourage
LIHTC development.
Taxes Dedicated
to Housing
Sales, property, lodging, short-term
rental fee, real estate transfer,
excise tax, vacancy tax, unit
demolition or conversion fees. Voter
approval required in most states.
Revenue stream can be used for
most housing-related activities.
Approval requires extensive public
education.
• Pursue either a mill levy or bond issue.
• Coordinate with a comprehensive education campaign.
• Consider citywide Special District.
• Evaluate what entity should hold funds collected (City, new Housing Trust
fund, etc.).
• Evaluate who should administer allocation of funds, taking into
consideration accountability requirements with the use public funds.
• Establish allocation criteria that considers: scoring system, leverages funds,
aligns with income targets, requires permanent affordability.
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Commercial
Linkage
Requires new commercial
development to provide housing or
pay fees for a portion of employees
needed to fill the new jobs
generated by the development.
Nexus study is required to
determine the mitigation
requirement. Fluctuates with
building activity.
• Conduct Nexus Study to evaluate the potential impact of linkage on
community housing and businesses.
• Consider the impact on business growth and the impact on the community
of doing nothing (status quo).
• Identify peer communities and evaluate what has worked and not worked:
learn from others.
• Make it easy for employers to build housing today if they want to: e.g.
continue to encourage residential above commercial or on same lot.
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On-Going Strategies
Modified land use regulations in exchange for community
housing. May include reductions in parking, setbacks, open
space, height limits, road widths, etc. Quality, compatibility,
safety and neighborhood impacts are concerns.
• City changes are in effect – monitor.
• Comments for future consideration:
o Create predictable list of incentives that are by-right
(approved by staff) in exchange for providing
community housing benefit.
o Amend utility and engineering standards to enable
the creation of tiny home villages.
o Evaluate reasons why mobile home parks are not
being built or updated, consider adjustments to the
building codes, engineering standards and UDC to
encourage.
Short Term Rental
(STR) Regulations*
Prohibiting or limited the use of homes for STR in specified
neighborhoods or zones; placing resident-occupancy
requirements on units that are rented short-term (e.g. rent
bedroom only; ADU and primary home cannot both be STR;
etc); require registration and charge fees; or other options.
• City adopted restrictions in 2017; monitor.
Housing Rehabilitation
and Weatherization*
Repairing, updating, enlarging, improving energy efficiency, and
providing handicapped accessibility, typically with Federal or
State grants with strict limitation on who can be served.
Staff/time intensive. Does not increase inventory of Community
Housing; rather improves the quality of the existing housing
inventory.
• Implementing partners: Habitat for Humanity; HRDC
• Comments/benefits:
o Enables people to stay in their homes.
o Weatherization serves households earning <60%
AMI.
o Provides low interest loans to rehab homes.
o Differentiate rehab (e.g. The Boulevards) from
weatherization.
o Keep – it’s a good thing.
Self Help Build* Homebuyers receive low interest loans and technical assistance
for their construction of homes. Requires large time
commitment
• Implementing partner: Habitat for Humanity
• Comments:
o Active in the area; keep doing it.
o Scalability is a problem – modest production.
o Land costs are a challenge in Bozeman.
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Senior Housing* High density, smaller, low maintenance units designed for
retiring residents.
• 260 affordable rentals for seniors and/or persons
with disabilities exist in the City; multiple
managers/providers are involved.
• Comment for future:
o Research full range of senior housing & service
needs
o Understand what is working well and not.
o Expand reach of needs to more than low-
income renters.
• Identify partners – a leader for this program.
Federal and State
Grants/Loans – CDBG,
HOME, USDA/Rural
Development, Section 8*
Federal and State grants/loans for affordable housing, generally
for construction of units. These include CDBG, HOME, and
USDA/Rural Development. Major federal funding cuts proposed.
Can only serve low income households (<50%, 60% or 80% AMI).
Competitive and complicated grant application and
administration process.
• Primary implementing partners: City, HRDC
• Comments:
o Utilized to the max right now.
o Allocation process skewed toward smaller
communities. Takes longer to pull required
information together in larger population
communities such as Bozeman.
o Highly competitive.
o A population >50,000 would push Bozeman to
an “Entitlement Community” status, which
would increase availability and provide direct
access to funding sources.
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Other Strategies Reviewed – For Future Consideration
HOUSING PROGRAMS
• Construction Education
Extension
• Public Sector Development
Work with local education system (high school technical
extension, community colleges, post-secondary education)
to provide training in the construction trades industry.
Initiating, designing, financing and constructing dwelling
units by municipalities, counties and/or housing
authorities. Similar to developing other public
infrastructure.
• Shortage of construction labor – program can
help build local labor/expertise.
• High school and MSU as potential partners.
• Requires public sector capacity and specific
expertise.
• Has financial risk.
FUNDING
• Construction & Debt Financing
with Favorable Terms
• Private Donations/Grants
• Special Improvement District
• Opportunity Zones
Low interest loans, tax exempt bonds, certificates of
participation and other forms of development financing
available to housing authorities, cities, counties and some
non profits to develop housing.
Tax deductible contributions to a non-profit organization,
which purchases or develops housing. Competes with
other charitable causes.
Special Improvement Districts (SIDs) are typically formed
to fund public improvements, typically infrastructure
(roads, sewer, etc.) or maintenance of City facilities or
services. Costs are distributed across the properties within
the SID that benefit from the improvements. Use
specifically for housing is not common.
The Opportunity Zones investment incentive was
established in 2017 to encourage long-term private
investments in low-income communities. Opportunity
Zones are eligible to receive private investments through
opportunity funds in the Bozeman area. The program does
not explicitly address below-market community housing
but may be designed to do so.
• Favorable terms include 90% LTV (loan to
value) and 30-40 year amortization.
• Create a pot of money to use and leverage.
• Interest rates are currently low; more effective
in high-interest rate environment.
• Donations to non-profit builders.
• Philanthropic grants.
• Consider a city-wide special improvement
district.
• Requires approval by 60% of the property
owners in the proposed district.
• System in place.
• State regulations may be a challenge.
• Not recommended for immediate use – new,
untested, and complex.
• Need education.
• Economic Development tool, does not have
any affordability incentives or controls.
• City’s AHO could require some community
housing in opportunity zones
• Tax credit projects get an equity boost in
Opportunity Zones.
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Other Strategies Reviewed – For Future Consideration (Continued)
PRESERVATION
• No Net Loss
• Condominium
Conversion Policy
• Deed Restriction –
Local Preference
• Acquisition of
Market Units
Requires replacement of below-market dwellings occupied by
residents when redevelopment occurs. Similarly-priced units
should be replaced on site or another site, or a fee-in-lieu of
replacement could be allowed. Demolition tax can be used to
fund replacement.
Limiting or prohibiting conversion of apartments to
condominiums to retain rental housing. May require some
portion of converted units to be restricted community housing
or provide first right of refusal of sales to apartment occupants,
among other conditions. Some impose a conversion fee that
goes into a housing fund.
A deed restriction can be structured to give occupancy priority
to certain households, as long as the priority does not
discriminate against protected classes (race, color, religion, sex,
handicap, familial status, national origin and, generally, source
of income) in violation of the Fair Housing Act. Common
preferences include employees that are working a certain
number of hours in the community, employees that have
worked a certain number of years in the community, and critical
employees such as emergency service providers.
Usually involves investing public funds to lower the sales price in
exchange for restricted community housing. Inability to obtain
condo mortgages can result in units being rented. Public sector
purchases can drive up prices for low-end market units.
• A demolition fee was discussed in the ”Funding”
strategy session.
• Homes transition from serving lower incomes to
higher incomes – red to green on the bridge.
• Some demolition and redevelopment is good.
• Provide plan for displaced individuals.
• Disincentivizes rehabilitation and redevelopment.
• Must define substandard/unsafe housing that is
best removed/redeveloped.
• A conversion fee was discussed in the “Funding”
strategy session.
• Converted apartments to condominiums can create
an entry level homeownership opportunity.
• Conversions from apartments to condominiums are
overseen by the state – would need to establish a
city tracking system.
• Big Sky requires 1590 hours of employment in
community.
• Be careful to not discriminate against “new locals.”
• More bang for your buck with other options.
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Other Strategies Reviewed – For Future Consideration (Continued)
REGULATIONS
• Annexation
Policies
• Residential
Linkage
Negotiating restricted community housing as part of annexation
agreements. Policy based. Entities have discretion in
negotiations. This is a widespread practice among communities
with community housing programs.
Requires new residential development to provide housing or
pay fees for a portion of employees needed to fill the new jobs
generated by the development. Nexus Study required.
Mitigation rate often increases with house size. Fluctuates with
building activity.
• Could apply to County “donuts” within the City.
• Consider if commercial linkage is applied. Ensure all type
of development contributes to community housing
impacts, not just one group.
Providing additional density in exchange for community
housing. Must be large enough to entice development yet small
enough for livability and compatibility. Not effective if existing
zoned densities are high (e.g. when zoned at a level where
developers have trouble building to existing densities).
Gives priority to developments that include community housing.
May include expedited approval; help navigating entitlements
(ombudsman approach).
• Parking will be of concern if more density allowed in
some areas.
• May need to modify existing densities for bonuses to be
effective. City currently has density minimums in all
residential districts in place.
• Need more staff capacity in order to fast track
applications.
• Potential for discontent among market rate developers if
other projects move ahead.
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3. Core Components
The Bozeman region has several programs, organizations and structures in place that are addressing community housing needs. This
Action Plan presents the ability to evolve the housing program to better meet the needs of residents and employees by creating,
strengthening and defining a partnership framework to address housing needs. This will allow Bozeman to leverage resources and
capacity throughout the community and region. We recognize that programmatically and administratively, this requires additional
capacity to manage an inventory of permanently restricted housing.
Core components are the tasks and structures needed to ensure that the partners and Plan continue to move forward. To ensure
support and continuation of this partnership, a sound administrative structure needs to be established, along with housing program
support to manage community housing that is produced through this Plan. Most of this structure needs to be in place within the first
two-years of Action Plan implementation, as shown below.
Core Components Timeline
*Darker blue = the action phase for each element; lighter blue = on-going phase.
CORE COMPONENTS LONGER TERM
Quarter 3 4 1 2 3 4 1 2 3 4 2022+
1. Action Plan Administration
2. Action Plan Coordinator/Facilitator - Action Plan to Work Plan
3. Housing Program Management
Housing guidelines
Deed restrictions (permanent)
Unit management/housekeeping
Inventory tracking
2019 2020 2021
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Each item is generally defined below, followed by the recommended implementation for each core component. For more detail,
please reference the Technical Documentation for this Action Plan:
1. Action Plan Administration – includes procuring and managing the budget and staff to implement the Plan.
The first steps of administration will be to:
o Submit the Action Plan for acceptance by the City Commission;
o Present the Plan to Gallatin County for recognition;
o Budget for 3 years of implementation (staff, contractors, etc.); and
o Evaluate existing community housing program management (housing guidelines, deed restrictions-permanent, unit
management, inventory tracking, etc.) and consider adjustment to meet community housing objectives.
2. Identify Action Plan Partner Coordinator—identifying a staff person/contractor who will serve as the convener of the Action
Plan to assist with a regular meeting schedule (quarterly to begin) to track progress, learn of partner successes and
challenges, and gather information for potential Plan modifications.
• Staff for this position could either be: 1) City of Bozeman Affordable Housing Manager, 2) Contractor with City, or 3)
Contractor with another entity, such as the Bozeman Community Foundation.
• Role of coordinator:
o Facilitation of partner meetings (at least quarterly to begin);
o Summarize and advertise the “collective impact” of Action Plan partners (update quarterly and track and advertise
through a published “Placemat” document or website);
o Public outreach/communications tasks;
o Partnership Development to build capacity of existing partners and recommend and bring in new partners;
o Project management: work with partners on teams to implement strategies (research, facilitate teams, data
analysis, outreach, etc.); and
o Work Plan development: Concurrently, the coordinator would work with each Action Plan partner to take steps
to develop a work plan for community housing from identified roles and tasks in the Action Plan.
At the city, this would include, for example, incorporating the Plan into any Memorandums of Understanding
(MOU) or contracts for implementation with supporting partners, as well as prioritizing strategies for which the
City has a role and identifying capacity and next steps for implementation.
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Action Plan to Work Plan Graphic
Bozeman Community
Housing Action Plan
CITY
AH PROGRAM MANAGER
CITY CONTRACT
COMMUNITY
FOUNDATION
ACTION PLAN
WORK PLAN
Community City County HRDC
Habitat for
Humanity
School
District Building
Industry
Chamber of
Commerce
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3. Community Housing Program Management – ensuring clear tracking, monitoring and management of units to retain
community housing goals:
a. Housing guidelines – providing information on community housing development specifications, affordability levels,
ownership and rental qualification procedures, sale/resale and rental standards, compliance and grievance processes,
unit management, etc. The City and HRDC has guidelines in place; ensuring compatibility with new permanent
affordability deed restrictions will be needed.
b. Deed restriction (permanent) – ensuring consistency, clarity, and that community housing goals are met, which means
preserving affordability in perpetuity for community housing produced.
c. Unit management/housekeeping – having a central structure in place to monitor and manage the sales/rental
occupancy, qualifications, maintenance, compliance monitoring, waitlists, etc. of community housing units. This
oversight will require additional capacity as the inventory of homes expands.
d. Inventory tracking – maintaining a database of deed-restricted rental and ownership units to track their effectiveness,
continued affordability, turnover, and occupancy to ensure the housing program and units are meeting goals. HRDC
has acquired HomeKeeper, a deed restricted housing tracking program, that can be very effective for this purpose.
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APPENDIX A – Action Plan Process, Definitions and Acknowledgements
Community Housing Action Plan Process
The Action Plan process began with an update to the “2012 Affordable Housing Needs Assessment for the City of Bozeman,
Montana,” to:
• Identify how much, what type, at which price points, and for whom community housing is needed both currently and
projected over the next five years;
• Inventory existing resources and capacity; and
• Understand current housing achievements.
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Using the 2019 City of Bozeman Community Housing Needs Assessment report and employer survey as the foundation, the Bozeman
Community Housing Action Plan process kicked off in May 2019. The process included six work sessions with the Housing Working
Group over a six-month period, two public open houses and online participation opportunities for public input. The consultant team
provided technical assistance and expertise on housing solutions in the intermountain west and, guided by a professional facilitator,
worked with the over twenty (20) community members comprising the Housing Working Group to decide upon and craft strategies
to make the Plan “Bozeman.” Input from the public helped ground the approach through open house and online opportunities for
participation. Throughout this process, the community drove the Plan’s priorities and development, resulting in the Bozeman
Community Housing Action Plan.
More specifically, the process:
• Began with an overview of key findings from the 2019 City of Bozeman Community Housing Needs Assessment and employer
survey to shape initial goals and priorities for the community housing Action Plan. The public weighed in at the first open
house and online regarding community housing objectives; Housing Working Group members were additionally presented
with information on the necessary components of successful housing programs; core needs for housing plan implementation;
and how other communities have been addressing similar housing challenges.
• At the second session, the Housing Working Group was presented with near 40 tools that other communities have used to
address community housing needs. Through input from the consultants and discussion among the Group, the Housing
Working Group prioritized tools they felt would be most effective for Bozeman.
• The Housing Working Group then spent two technical work sessions on the prioritized tools to develop action strategies.
Through this process, the Housing Working Group learned about best practices in comparable communities, developed
strategies, and discussed roles and responsibilities for implementation. The outcome of these sessions was presented to the
public in a second open house to evaluate priorities and get input on drafted actions.
• The final session modified the actions and priorities pursuant to public input received. Objectives were revaluated; a timeline
for prioritized action strategies was developed; and roles and responsibilities were identified among the various partners to
implement the Plan.
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Definitions
The following definitions are provided and coincide with those used in the City of Bozeman Community Housing Needs Assessment
(February 2019).
Affordable housing – As used in this report, housing is affordable if the monthly rent or mortgage payment is equal to or
less than 30% of gross household income (before taxes).
Area Median Income (AMI) – A term that generally refers to the median incomes published annually for counties by the
US Department of Housing and Urban Development (HUD). AMI varies by household size. AMI is used to set income and
rent limits for housing programs statutorily linked to HUD income limits (e.g. low-income housing tax credit rentals).
Community Housing – Homes that those who live and work in Bozeman can afford to purchase or rent. This includes
apartments, townhomes, condominiums, emergency shelters, accessory dwelling units, mobile homes and single-family
homes – all dwelling types – serving the entire spectrum of housing needs. The report City of Bozeman Community
Housing Needs Assessment (February 2019) identifies community housing needs in Bozeman in 2019 through 2025.
Community Housing Action Plan – A partnership framework with actionable strategies to increase the inventory of
community housing – dwellings that Bozemanites can afford to purchase or rent.
Missing Middle – Generally refers to ownership housing needed for residents and employees earning over 80% AMI, yet
that cannot afford market-rate housing. In Bozeman, this generally refers to households earning between about 80% AMI
up to 150% AMI (an average-sized 2.0-person household earning between $55,700 to $104,400 per year).
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Acknowledgements
We would like to thank everyone who gave their time and assistance to create the Bozeman Community Housing Action Plan. Input
from local employers, Realtors, developers, end-users, lenders, and property managers (through targeted interviews and focus
group meetings) and 491 businesses or about 10% of all businesses in the City of Bozeman (through an employer survey), were
central to identifying the community housing needs and several strategies that are the focus of this Plan. Development of the Plan
relied on funding from the City of Bozeman and philanthropy along with extensive participation from the City of Bozeman staff and
community stakeholders, leaders, and residents that formed the Housing Working Group:
Bozeman Community Housing Action Plan Working Group
*Many working group members are affiliated with multiple organizations in Bozeman. Only the primary affiliation of each member is listed above.
We cannot thank the community enough for the wealth of insight and experience they brought to this process. The Bozeman
Community Housing Action Plan would not exist without this broad and extensive participation.
NAME AFFILIATION
Bill Fiedler & Penny Zacharisen (Alt)Chamber of Commerce
Brian Popiel SWMBIA
Bridget Wilkinson Bozeman Area Community Foundation
Connie Campbell-Pearson Gallatin Valley Interfaith Association
David Magistrelli Habitat for Humanity
Desiree Smith Bank of Bozeman/Residential Lending
Ellen Beck Gallatin Association of Realtors
Erik Nelson ThinkTank/Development
Jason Smith Bozeman Health
Karin Jennings West Paw/Manufacturing
Kathi Thorson Legacy Properties/Property Management
Kevin Thane CAHAB
Lila Fleishman & Brian Guyer (Alt)Missing Middle
Loren Olsen & Marty Madsen City Staff
Mathieu Menard Gallatin County Planner
Pat Strauss Bozeman School District
Paul Reichert Prospera
Rob Pertzborn Intrinsik/Achitect
Scott MacFarlane Gallatin County Commission
Susan Riggs & Chris Naumann (Alt)Downtown Partnership
Terry Cunningham City Commission
Tracy Ellig & Michael Becker (Alt)Montana State University
Tracy Menuez HRDC
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