HomeMy WebLinkAboutBozeman Econ Demog Assessment EPS - Final Draft 1.25.2018
Report
Demographic and Real Estate
Market Assessment
Prepared for:
City of Bozeman, Montana
Prepared by:
Economic & Planning Systems, Inc.
January 25, 2018
EPS #173007
Table of Contents
1. INTRODUCTION AND SUMMARY OF FINDINGS .................................................................. 1
Introduction ............................................................................................................. 1
Socioeconomics ........................................................................................................ 2
Housing Conditions ................................................................................................... 3
Retail Conditions ....................................................................................................... 4
Land Demand and Supply Considerations ..................................................................... 8
2. REGIONAL TRENDS AND CONDITIONS ........................................................................ 12
Demographics ........................................................................................................ 12
Employment ........................................................................................................... 15
Migration ............................................................................................................... 20
3. BOZEMAN SOCIOECONOMICS .................................................................................. 22
Economic Drivers .................................................................................................... 22
Workforce Characteristics ........................................................................................ 29
Community Comparisons ......................................................................................... 33
4. HOUSING MARKET TRENDS .................................................................................... 34
National Housing and Demographic Trends ................................................................ 34
Household Characteristics and Affordability ................................................................ 38
Housing Price Trends ............................................................................................... 40
Rental Market ......................................................................................................... 42
Construction Trends ................................................................................................ 43
5. RETAIL MARKET ................................................................................................. 47
National Retail Market ............................................................................................. 47
Bozeman Retail Development ................................................................................... 49
Retail Demand ........................................................................................................ 52
Commercial Zoning Evaluation .................................................................................. 54
Neighborhood Commercial Development Strategies ..................................................... 63
6. OFFICE AND INDUSTRIAL MARKET ............................................................................ 64
Office Market Trends ............................................................................................... 64
Gallatin Valley Office Market ..................................................................................... 66
Gallatin Valley Industrial Market ............................................................................... 68
Table of Contents (cont.)
7. LAND DEMAND PROJECTIONS .................................................................................. 69
Population and Employment Projection ...................................................................... 69
Housing and Land Demand....................................................................................... 72
Commercial Land Demand ....................................................................................... 75
Land Supply ........................................................................................................... 79
A PPENDIX ......................................................................................................... 82
List of Tables
Table ES-1 Gallatin County Population and Employment Projection ......................................... 6
Table ES-2 Bozeman’s Projected Demand for Housing and Commercial Building Space .............. 7
Table ES-3 Summary of Land Demand Projections ................................................................ 8
Table 1 Population Trends .......................................................................................... 12
Table 2 Gallatin County Demographic Summary ............................................................ 14
Table 3 Gallatin County Employment Trends, 2001-2015 ................................................ 16
Table 4 Gallatin County Net Migration, 2010-2015 ......................................................... 20
Table 5 Largest Private Employers, Gallatin County, 2015 .............................................. 27
Table 6 Share of Job Growth by Sector, 2005-2014 ....................................................... 28
Table 7 Peer Community Demographics and Employment ............................................... 33
Table 8 Income Required to Afford the Median Priced Home ............................................ 41
Table 9 Student vs. Local Housing Payment Example ..................................................... 42
Table 10 Residential Construction Trends, 2005-2016 ...................................................... 43
Table 11 Retail/Commercial and Hotel Construction Trends .............................................. 50
Table 12 Bozeman Retail Inventory ............................................................................... 51
Table 13 Bozeman Supportable Commercial Area: Local Spending..................................... 53
Table 14 B-1 and B-2 Development Capacity .................................................................. 56
Table 15 B-1 District Supportable Square Feet by Number of Households ........................... 58
Table 16 Development Capacity (0.15, 0.5, and 1.0-mile radius) ...................................... 59
Table 17 B-2 District Supportable Square Feet by Household Spending .............................. 61
Table 18 Gallatin Valley Office Construction Trends ......................................................... 66
Table 19 Gallatin Valley Industrial Construction Trends .................................................... 68
Table 20 Gallatin County Employment Projection ............................................................. 70
Table 21 Gallatin County Population and Housing Projection ............................................. 71
Table 22 Bozeman Housing Projection ........................................................................... 72
Table 23 Residential Density Factors .............................................................................. 73
Table 24 Bozeman Residential Land Demand Projection ................................................... 74
Table 25 Commercial Land Demand Assumptions ............................................................ 75
Table 26 Commercial Construction Projection ................................................................. 76
Table 27 Bozeman Commercial Land Demand Projection .................................................. 77
Table 28 Summary of Land Demand Projections .............................................................. 78
Table 29 Comparison of Undeveloped Land and Demand by Major Land Use ....................... 79
Table 30 Undeveloped Land by Zoning ........................................................................... 80
List of Figures
Figure 1 Population Index, 2000-2016 ........................................................................... 13
Figure 2 Gallatin County Employment, 2001-2015 .......................................................... 15
Figure 3 Gallatin County Employment Index, 2008-2016 ................................................. 17
Figure 4 Share of Job Growth by Sector, 2010-2016 ....................................................... 18
Figure 5 Gallatin County Job Distribution, 2014 .............................................................. 19
Figure 6 Share of Job Growth by Area, 2005-2014 .......................................................... 19
Figure 7 Average Firm Size, 2000 and 2016 ................................................................... 20
Figure 8 Gallatin County In-Migration, 2011-2015 .......................................................... 21
Figure 9 MSU Student Enrollment and Total FTE Count, 1990-2016 .................................. 23
Figure 10 YNP Annual Visitation, 2010-2016 .................................................................... 24
Figure 11 Annual Skier Visits, 2010-2016 ........................................................................ 25
Figure 12 Bozeman Educational Attainment, 2015 ............................................................ 29
Figure 13 Bozeman Age Distribution, 2015 ...................................................................... 30
Figure 14 Average Wages, Gallatin County, 2016 ............................................................. 31
Figure 15 Gallatin County Share of Job Growth by Wage Quartile, 2010-2016 ...................... 31
Figure 16 Price per square foot for compact walkable development, 2011 ........................... 36
Figure 17 Bozeman Housing Tenure, 2000, 2010, 2016 ..................................................... 38
Figure 18 Percent of Owner Households Spending Over 30% of Income on Housing, 2015 .... 39
Figure 19 Percent of Renter Households Spending Over 30% of Income on Housing, 2015 .... 39
Figure 20 Median Sale Price by Area, 2003-2017 .............................................................. 40
Figure 21 Units Built by Density Type, 2005-2010 and 2011-2016 ...................................... 44
Figure 22 Average Single household Lot Size by Year Built ................................................ 45
Figure 23 Residential Development by Location and Year Built ........................................... 46
Figure 24 US E-Commerce Sales, 2001-2014 ................................................................... 47
Figure 25 Retail and Commercial Development Areas ........................................................ 49
Figure 26 B-1 and B-2 Commercial Districts ..................................................................... 55
Figure 27 Location Preferences for Bozeman Businesses .................................................... 64
Figure 28 Employment to Labor Force Methodology .......................................................... 70
Figure 29 Conversion of Jobs to Commercial Space and Acreage ........................................ 75
Economic & Planning Systems, Inc. 1 173007-Report 01-25-18.docx
1. INTRODUCTION AND SUMMARY OF FINDINGS
Introduction
This report contains an assessment of economic, demographic, and real estate trends in
Bozeman to inform the Growth Policy update process. It addresses changing real estate market
conditions at the local and national levels, assessments of key economic and demographic
trends, and estimates of future land use needs (land demand) to be considered in the Growth
Policy update process.
This document is organized into seven Chapters outlined below:
• Chapter 1 – Introduction and Summary of Findings.
• Chapter 2 – Regional Trends and Conditions. This chapter presents an analysis of
economic and demographic trends in Greater Bozeman and Gallatin County including the
amount of population and employment growth occurring in each location, and a comparison
of the economic composition of each.
• Chapter 3 – Bozeman Socioeconomics. This chapter focuses on the socioeconomics of the
City of Bozeman including the economic base and MSU enrollment. It also describes the four
economic segments present that make Bozeman unique among small cities: higher
education, tourism and recreation, health care, and technology.
• Chapter 4 – Housing Market Trends. This chapter summarizes housing development
trends, housing demographics, affordability indicators, the impact of MSU student rentals,
and national trends present in Bozeman.
• Chapter 5 – Retail Market. In this chapter, the city’s major retailer inventory and spending
patterns are examined. It also contains an analysis of the amount and type of retail and
commercial space that is supportable in a prototypical B-1 and B-2 zoning area.
• Chapter 6 – Office and Industrial Market. This chapter presents data on office and
industrial building construction in Greater Bozeman, including the market share for each
area. It also includes market indicators such as land costs and rents and qualitative
perspective from area real estate experts.
• Chapter 7 – Land Demand Projections. A 25-year projection of land demand for housing
and commercial development is prepared, including a scenario comparing growth at current
average densities to growth at higher densities.
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Socioeconomics
1. Bozeman has five economic segments that make it unique and create both
opportunities and challenges.
Higher Education - Montana State University (MSU) is the largest employer with
approximately 3,000 full- and part-time employees and stable employment levels. MSU
research partnerships have resulted in new business creation from technology transfer and
spinoffs, a major focus of the Innovation Campus under development.
Technology - Bozeman has long been a highly entrepreneurial place in all sectors of the
economy. Several factors have accelerated the growth of technology firms and workers.
Bozeman has made several “10 Best” places to live lists which is attracting lifestyle seekers,
workers, and entrepreneurs who have the means to choose where they want to live. The
purchase of RightNow Technologies by Oracle produced several spinoff firms. Bozeman also
has a strong photonics cluster originating from technology transfer from MSU.
Tourism and Recreation - Many national and international tourists travel to and through
Bozeman on their way to Yellowstone and Glacier National Parks, Bridger Bowl and Big Sky
ski areas, and the many nearby rivers and mountains. Bozeman has a brand and identity that
is well known throughout the U.S. and internationally. The Bozeman and Montana brand has
also boosted the outdoor products industry, including Simms Fishing, Mystery Ranch (formerly
Dana Design), Oboz footwear, and Sitka hunting apparel. The downside of being a tourism
gateway is that a high proportion of jobs and job growth is in low wage hospitality sectors.
Health Care - The health care industry added nearly 1,400 wage and salary jobs since 2010,
an increase of 34 percent. It is a source of stable employment at a range of wages and skill
levels, as people need health care no matter how the rest of the economy is performing.
Bozeman Health is the largest private employer with over 1,000 employees, and Bozeman is
a major hub for health care in Montana.
Regional Trade Center - Bozeman is a regional trade and service center in Southwest
Montana. Bozeman’s retail, services, and healthcare businesses serve a trade area of
approximately 150 miles. The influx of visitors has helped the community diversify the retail
and food and beverage mix as well as strengthen downtown.
2. Bozeman has a level of economic diversity and strength that exceeds many other
small western cities, especially those that are not part of a larger metropolitan
region.
In many small western cities and rural areas, health care and government are the largest
sectors of the economy unless there is a strong energy or extractive sector. In Bozeman, job
growth has been robust and diverse including the sectors and clusters noted above:
accommodations and food services; construction; health care; retail; manufacturing; and
professional services. Countywide, employment has grown at 4.2 percent per year since
2010 (12,000 jobs), and 80 percent of the job growth occurred in Bozeman. This growth is
attributed to the quality of life; service in and out of the Bozeman Yellowstone International
Airport; spinoffs from local technology and R&D firms; growth of existing firms; and new
businesses and entrepreneurs moving to Bozeman.
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3. Nearly three-quarters of Gallatin County’s population growth is due to in-migration
with most of this occurring in Bozeman.
Of the nearly 15,000 new people in Gallatin County from 2010 through 2015, nearly 11,000
are people who moved to Gallatin County. The remaining 4,000 in population growth is from
natural increase (births minus deaths). The Census does not report these statistics for
geographies smaller than counties, but more than half of the County’s population growth
occurred within city limits indicating that those proportions are also representative of Bozeman’s
growth. Strong migration like this indicates that Bozeman is a highly desirable place to live,
work, own a business, or retire. It is also an indicator of the strength of local economy.
Some new residents have moved from larger metro areas and brought a job and salary with
them. Others, such as retirees or people with investment portfolio income who have other
sources of income, are moving to Bozeman for the lifestyle and quality of life. An effect of
these two trends is that housing prices become decoupled from local economy and local wage
levels. This trend – the influx of outside income and wealth – is occurring in every major
amenity-rich and mountain resort community in the Intermountain West.
4. Most of the job growth in Gallatin County and Bozeman (as well as nationally) is
below $16.00 per hour, which is generally regarded as below a living wage.
Nearly half of all new jobs created from 2010 through 2016 paid less than $16.00 per hour
($34,000 per year). The primary industries in which these wage levels are present include
health care, retail, and accommodations and food services, all of which grew since the
recession. Job growth at these wage levels further increases the demand for income
restricted affordable and market rate attainable housing. This is a national trend that has
been even more pronounced after the Great Recession. Housing affordability is now a
national problem as well due to low rates of wage, income and wealth growth over the past
decade or more.
Housing Conditions
5. Bozeman’s housing market is exhibiting several national trends related to changing
preferences and demographic changes.
National and regional consumer preference research has shown an increase in demand for
housing in communities and neighborhoods close to jobs, services, dining, shopping, and
recreation and leisure activities. Also, the time and money people feel that they have
available to maintain large homes and properties has decreased especially as dual income
families have become the norm or necessity. A portion of the housing market is moving away
from large lot suburban and rural homes to:
• More compact single household development with smaller lot sizes, such as the
Traditional Neighborhood Design (TND) style of development. Neighborhoods such as
Stapleton in Denver, CO; Josephine Crossing in Billings, MT; and Valley West in Bozeman
are examples of TND housing developments.
• Increased demand for rental housing both for affordability and lifestyle preference
reasons, especially among the 18 to 34-year-old population.
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• Increased demand for more affordable and lower maintenance housing by all age groups
including the retiring Baby Boom generation.
• Increased demand for downtown locations and original neighborhoods, as exhibited by
the rise in housing redevelopment and infill in the original Bozeman neighborhoods and
similar neighborhoods in other desirable cities nationwide. Over 100 new homes have
been built in Downtown area neighborhoods since 2010, and at least another 100 in the
downtown core (the B-3 zoning district).
6. Housing affordability is a growing issue in Bozeman and the Gallatin Valley that is
negatively affecting quality of life and may affect employee attraction and retention.
As of August 2017, the median home price in Bozeman was $398,000 up from $245,000 as
the recovery from the Great Recession began with annual appreciation rates over 10 percent
per year over the past five years. To afford the median priced home in Bozeman at the 30
percent of income affordability standard, a household needs to earn at least $68,400 per
year or $32.00 per hour for one earner. The median household income for owner households
is currently about $68,000 indicating that overall home prices are still in line with incomes at
this broad statistical level. These figures however do not account for the quality of the housing
available at this price. In addition, it is the rapid increase in home values that people are
experiencing especially since wages in incomes have not kept pace with housing cost increases.
Home prices in Belgrade, Livingston, and Three Forks have also increased at 10 to 12 percent
per year over the same time period. Living in outlying areas may reduce amounts paid for
housing but increases costs for transportation that may offset much of the perceived cost
savings of locating outside of Bozeman.
7. Bozeman has a tight housing market and should consider strategies to increase the
supply of housing to sustain its workforce.
If housing production does not keep pace with job growth, student growth, second home
demand, and housing occupied by retirees, it will constrain the labor market. While Bozeman
is one of the largest cities in Montana, it is still a small city with a small labor pool compared
to larger metro areas with a larger and deeper talent pool and more career mobility options.
Fortunately, Bozeman has readily developable land to the south, west and northwest and
east that can accommodate significant job and housing growth.
Retail Conditions
8. Bozeman is the primary retail destination in Southwest Montana. Retailers in the
city serve a local trade area of approximately 100,000 people in the Gallatin Valley
plus a 150-mile radius in Southwest Montana. However, large scale retail may not
grow substantially in the next 5 to 10 years.
Retail located in Bozeman serves the City population of 42,000 plus the Gallatin Valley with
another 60,000 people, and outlying areas of Southwest Montana. At least a third of retail
sales in Bozeman are estimated to come from outside this Gallatin Valley local trade area from
Southwest Montana and from visitors/tourists. The city’s trade area has however shrunk since
Walmart, Costco, and Target located in Helena several years ago.
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With the contraction in the retail market due to the growth of e-commerce, there are fewer
opportunities to expand retail. In addition, demographic changes are favoring less retail
consumption and a shift to the food and beverage market. Most of the national ‘big box’
retailers that are still active and expanding are already present in Bozeman—such as Costco,
Walmart, Lowes, Home Depot, Target, and Kohls. Thus, there are few other store chains left
that would expand to Bozeman. Looking further out however, new stores and concepts do
appear in the market from time to time, and Bozeman will be an attractive location for them.
However, we do not expect the demand for these types of sites and properties to increase
substantially over the next 10 years.
It is likely that as Belgrade and other surrounding communities grow, they will reach a large
enough size and support their own retail base at least for community-serving retail (less so
for regional retail). Given that there is no sales tax in Montana and therefore not a large
fiscal benefit to siting new retailers – and that Bozeman already has the largest share of the
regional retail market – retail development and recruitment does not need to be a priority for
the City.
9. There is demand for office space in Bozeman but it is difficult for developers to
build new supply.
Gallatin County added over 1,600 jobs in professional services since 2005, with at least 80
percent of that occurring in Bozeman. Similarly, Bozeman accounted for 80 percent of the
total office construction in Bozeman, Belgrade, and Four Corners combined. There is demand
for office space, but it is difficult for the market to respond. The bulk of the market is small
firms looking for about 1,000 to 5,000 square feet. Building large speculative office buildings
is therefore risky due to the large number of tenants needed to fill a building. Building
smaller buildings is costlier as some costs decrease per square foot with larger buildings.
Land and construction costs in Bozeman require high rents (over $20.00 per square foot) to
make an office building financially feasible, which is high for small local businesses.
Downtown is one of the most desirable office locations in the city because of the proximity of
other firms plus restaurant amenities and the walkable and bikeable environment. The B-1
zoning areas can meet some of the office demand as second floor space. However, the
strength of the residential market may be outcompeting office in these areas.
10. Bozeman has lost significant market share for large industrial buildings and cost-
sensitive users of industrial space.
Over past 16 years, the Greater Bozeman market added 1.9 million square feet of industrial
space. Over half of this was in Belgrade and nearly 40 percent was in the Four Corners area.
Bozeman captured only 10 percent of the industrial market. The land consumptive nature of
many industrial uses coupled with land and development costs dictate that Bozeman is no
longer competitive for many larger heavier industrial uses.
Bozeman should therefore focus on higher value industrial businesses such as light and high
skilled manufacturing, R&D, and producers of high value specialty products. Some industrial
jobs pay living wages, so there is a benefit to attracting them to a community. Also, there is
still demand and interest for industrial development in Bozeman from firms that want to be
closer to the labor pool and be more associated with the Bozeman brand. Growth Projections
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Chapter 7 of this report provides estimates of land that will be needed to support the next 25
to 30 years of growth in and around the City of Bozeman. Forecasts and projections are by
their nature estimates. They are to be used in the process of thinking about the vision for the
future of Bozeman and the Gallatin Valley and how it may evolve and grow over the next 25
years. These projections are not a statement that certain lands will be developed; they are
estimates of the land needed to support continued growth based on population and job
growth trends over the past 15 years. The Growth Policy Update process will gather input
from the public on how, where, and if the City should grow and the goals, objectives, and
policies that will shape and manage future growth.
11. If current trends continue even at a more moderate pace, Gallatin County will grow
by nearly 55,000 people from 2017 through 2045 with about half of the growth
likely to occur in the City of Bozeman.
Job growth will drive most of population growth, and 42,000 new jobs are projected over this
time period (Table ES-1). Projected job growth is 1,500 jobs per year over the roughly 25-
year projection tapering from 1,700 jobs per year in the near term down to 1,300 per year in
the outer years of the projection. To support the projected job growth in all of Gallatin
County, a population increase of nearly 55,000 is required or almost 2,000 people per year at
an annual rate of 1.52 percent. From 2000 through 2016, Gallatin County added an average
of 2,200 people each year.
Table ES-1 Gallatin County Population and Employment Projection
As a municipality, Bozeman has the tools to provide water and sewer service at the City
scale. Smaller districts in the unincorporated County do not have the same financial
resources to provide these services which will limit the amount of growth that occurs in
unincorporated areas.
Gallatin County 2017 2020 2030 2040 2045 Total Annual
Growth
Rate
Population 105,000 111,700 133,100 151,200 159,900 54,900 1,961 1.5%
Employment 80,400 85,600 101,900 115,800 122,500 42,100 1,504 1.5%
Source: Economic & Planning Systems
Change 2017-2045
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12. Bozeman has consistently accounted for about half of the population and housing
growth in Gallatin County, and the projections in this report assume that this trend
continues. Bozeman is also expected to continue to account for a large share of the
retail, office, major employer, and hospitality markets going forward.
With Bozeman capturing approximately half of the countywide housing demand, this projection
estimates demand for 12,700 new housing units in Bozeman over the 2017 through 2045
time period (Table ES-2). On an annual basis, construction is projected at approximately
450 units per year on average compared to 600 units per year over the past 10 years.
Table ES-2 Bozeman’s Projected Demand for Housing and Commercial Building Space
Nonresidential construction demand in Bozeman is projected to be 6.3 million square feet
from 2017 through 2045 (Table ES-2). For office development, Bozeman is projected to
maintain its current market share of 80 percent of the Gallatin County office market totaling
1.7 million square feet from during this time. The estimated share of the industrial and
warehousing market is lower, at 10 percent based on the higher land costs in the city and the
growth in industrial space in Four Corners, Belgrade, and Manhattan. Industrial demand in
Bozeman is estimated at nearly 500,000 square feet for the planning projection period. In
the retail, restaurant, and hotel markets, Bozeman is expected to continue to be a major
regional trade and services hub for Southwest Montana, and capture 70 percent of the retail
market countywide with 1.4 million square feet of retail demand projected. Likewise, for
government, education, and health care, Bozeman is projected to capture 75 percent of the
demand in these sectors.
Bozeman 2017-2020 2021-2030 2031-2040 2041-2045 Total Annual
Housing Units 1,570 4,950 4,210 2,020 12,750 455
Annual 523 495 421 404
Commercial Sq. Ft.
Office 197,000 652,000 570,000 270,000 1,689,000 60,000
Industrial/Wareshouse 60,000 183,000 154,000 75,000 472,000 17,000
Retail 201,000 580,000 438,000 202,000 1,421,000 51,000
Restaurant and Hotel 138,000 421,000 365,000 187,000 1,111,000 40,000
Institutional (Gov't., Medical, Education)163,000 607,000 555,000 253,000 1,578,000 56,000
Total 759,000 2,443,000 2,082,000 987,000 6,271,000 224,000
Source: Economic & Planning Systems
Change 2017-2045New Demand
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Land Demand and Supply Considerations
13. Projected land demand for the 2017 to 2045 time period ranges from 2,600 to
3,900 acres, with housing demand being the primary driver of land demand.
Residential development formats will have the most influence on the form of the
city and the amount of land needed to meet market demand.
The baseline projection of land demand projects residential land demand at 3,100 acres on
current estimated development densities (units per acre) ranging from 3.0 units per acre
(gross density including right of way and public spaces) for single household detached units
to 20 units per acre on average for multifamily development (Table ES-3). Three units per
acre for single household detached homes is an average net lot size of 7,100 square feet
(0.16 ac.). A more compact development scenario was also prepared with higher residential
densities; single household detached homes are assumed to be 5.0 units per acre gross
density which translates to an average lot size of 4,300 square feet. The compact scenario
projects residential land demand at 1,800 acres. In all cases, a 50 percent planning
adjustment is added to allow for healthy market competition and land use planning flexibility.
Residential land demand comprises 70 to 80 percent of total land demand in the higher
density and lower density scenarios, respectively.
Table ES-3 Summary of Land Demand Projections
Land Use Baseline Density
Higher
Density Density
Residential
Single-Family (Detached)1,486 3.0 units/ac.891 5.0 units/ac.
Townhomes (Attached)212 6.0 units/ac.127 10.0 units/ac.
Duplex (2 units)318 4.0 units/ac.159 8.0 units/ac.
Multifamily (Greater than 3 units)64 20.0 units/ac.51 25.0 units/ac.
Subtotal 2,080 1,229
Planning Adjustment (+50%)1,040 614
Total 3,120 1,843
Commercial
Office 130 0.30 FAR 130 0.30 FAR
Industrial/Flex Space 75 0.15 FAR 75 0.15 FAR
Retail 135 0.25 FAR 135 0.25 FAR
Accommodation and Food Services 50 0.50 FAR 50 0.50 FAR
Institutional 115 0.30 FAR 115 0.30 FAR
Subtotal 505 505
Planning Adjustment (+50%)253 253
Total 758 758
Total 3,878 2,601
Square Miles (640 ac. per section)6.1 4.1
Source: Economic & Planning Systems
2017-2045 Land Demand
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Commercial development densities were held constant as they will be dependent on market
preferences for surface parking—which is costly to develop. On average, commercial rents
and values do not make structured parking financially feasible in Bozeman. Some high value
areas such as Downtown and around major employers could support structured parking that
will allow for higher commercial development densities. Additional access using good bicycle
and pedestrian facilities can also reduce parking demand. The 0.30 FAR assumption for office
space is still higher than typical suburban densities and reflects the influence of high land
costs in Bozeman.
14. The City’s zoning is flexible in terms of allowable land uses making it impractical to
predict supply and demand by zoning district. Broad conclusions and considerations
on the City’s land supply are offered below.
Residential Land
Most of the projected market demand will be in the residential market with an estimated
1,800 to 3,100 acres in demand over the 2017 through 2045 time period. The current supply
is approximately 1,300 acres or 40 to 70 percent of the projected demand. The Growth Policy
process will need to look in more detail at the remaining supply of residential land to
determine how much of the existing supply can realistically meet future demand compared to
the need to annex new land for development.
Industrial Land
The North Park properties are an important opportunity for the City to expand the supply of
employment and industrial land. Roughly 150 acres in the North Park area are owned by the
State of Montana in the school land trust. The State has leased its holdings to a master
developer for eventual development, although there are transportation access and utility
infrastructure hurdles that need to be addressed. North Park is well-located for industrial
development, but also for other employment uses including R&D and office. North Park may
be the City’s best current opportunity for expanding employment lands within its current
incorporated boundary.
Another large area of industrial land (at least 150 acres after deducting right-of-way) is the
Idaho Pole property between I-90 and the railroad, northeast of Downtown. There have been
concepts circulated in the community to redevelop the Idaho Pole property as housing and
mixed use. The Growth Policy process should consider if this area should remain industrial or
transition to housing and other types of employment. The Growth Policy process could
consider adding to the supply of industrial land, particularly if the Idaho Pole property is
rezoned. Adding new industrial land that does not involve redevelopment would be absorbed
more easily by the market than a site with redevelopment costs and potential environmental
remediation costs.
Employment Land
Bozeman will benefit from having land for high quality office and R&D development. These
lands need to be well located and close to mixed use and lifestyle amenities such as
restaurants and limited retail and services, and be accessible by car, bicycle, and by foot.
The high cost, and lack of supply, of office and other space for small and new businesses
could constrain the entrepreneurial sector. Supporting incubator space and the MSU
Technology Park will be important considerations.
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Retail Land
While the retail market is in transition, a portion of the retail market will continue to expand
with the growing population. One approach would be to designate the North 19th and Huffine
corridors to continue as the large scale regional retail locations, and to allow for continued
neighborhood and community retail areas in locations where housing development is
expected. Any new B-1 and B-2 areas may need to be scaled down in size from previous land
use and zoning designations as described below.
15. B-1 Neighborhood Business District and B-2 Community Business District zoning
can be adjusted to better align with the real estate market and household density
needs of retail development.
B-1 Neighborhood Business District Zoning
The assumption needs to be reexamined that a B-1 commercial center serves a half-mile
radius trade area. In many areas, housing densities and the resulting household expenditure
potentials are not high enough to generate the demand needed to support these
neighborhood retail centers. B-1 neighborhood centers start to become more viable—
assuming a half-mile trade area—at an estimated net density of 8 dwelling units per acre,
which is significantly denser than the original Bozeman neighborhoods and new development.
If a larger trade area is acceptable, the required household density can be lower.
The success of any individual B-1 area will always depend on the strength and quality of the
business mix, the specific location, and surrounding demographics. Some B-1s have been
successful because of their location on an arterial road (visibility and access) or close to a
major demand driver such as MSU.
B-1 zoning is still important because it can serve a variety of community and neighborhood
needs besides daily shopping and neighborhood dining. There is demand for small office and
studio space, childcare facilities, and health and wellness businesses. Having a diverse
business mix within neighborhoods can enhance quality of life. This flexibility of uses should
be maintained in the B-1 areas.
B-2 Zoning
B-2 Districts are intended to include a mix of larger community oriented retail/commercial
space serving a larger two to three-mile trade area. Traditionally, community shopping
centers are 100,000 to 150,000 square feet in size and are anchored by a grocery store. New
grocery stores begin at about 50,000 to 60,000 square feet.
Some B-2 zoning areas can accommodate 500,000 square feet or more of retail/commercial
development. This was the size of the “power center” development format that emerged in
the early 2000s when retail was expanding rapidly. Given the transition of the retail market
and the growth of e-commerce, it is not realistic to expect some B-2 areas to build out
entirely as retail.
Like B-1 areas, B-2 areas also allow for numerous other commercial uses. This flexibility
should be maintained, as these areas can also support office development that is in demand,
as well as other services.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 11 Report
Also like B-1 areas, adding additional housing density near or even in B-2 zoning areas can
benefit retail development. The City may want to consider more flexibility for high density
residential development in B-2 zoning areas. Currently, it is only allowed as a conditional use
if it is on the ground floor. Some limitations on residential development could include the
following:
— Limited to a percentage of land area; and/or
— May not front the arterial streets or hard corner (the best retail/commercial locations).
16. It is challenging to establish new retail districts, especially at the neighborhood level.
Strategies from other cities identified for strengthening neighborhood retail are
focused more on revitalizing existing retail districts rather than creating new ones.
Many cities work to attract large anchor retailers and to keep their retail tenant inventory and
building stock up to date. These efforts address larger scale retail needs at the city and
regional level to reduce sales and sales tax leakage due to competition with surrounding
communities. The approaches to encouraging neighborhood retail or business growth are
often linked to broader economic development programs and are very different from national
tenant recruitment and incentive-based approaches. In Portland, OR, the City partners with
other economic and community development groups to support existing local business
districts through marketing, grants, technical assistance, and sometimes incentives through
tax increment financing (TIF). The program is focused mainly on existing business districts
especially in areas in need of reinvestment and revitalization.
Like Bozeman, Fort Collins, CO has several neighborhood commercial areas in its land use
plan and zoning. Fort Collins has also struggled to attract commercial development to these
areas. Fort Collins staff has observed that as it is difficult to create new un-anchored retail
locations without significant housing density. In Fort Collins, major retailers look for locations
on two key commercial arterials, and smaller tenants follow the larger anchor businesses. So
far, there has not been any significant smaller-scale retail/commercial development outside
of the historic Downtown or major commercial corridors. Fort Collins has a similar
entrepreneurial climate, and has a revolving loan fund to support new business creation.
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Economic & Planning Systems, Inc. 12 173007-Report 01-25-18.docx
2. REGIONAL TRENDS AND CONDITIONS
This chapter provides an overview of economic and demographic trends and conditions in
Greater Bozeman and Gallatin County. These trends and conditions are also summarized for
major cities and towns in the County and include the following:
• Bozeman
• Belgrade
• Three Forks
• Manhattan
• West Yellowstone
Demographics
Bozeman is one of the fastest growing places in the nation. Between 2000 and 2016, the City
added approximately 17,000 new residents, which translates to a growth rate of nearly 1,100
new residents per year or an annual growth rate of 3.0 percent (Table 1). While regional
population growth slowed during the Great Recession between 2008 and 2010, it has quickly
surpassed pre-recession levels. Growth rates since 2014 have averaged approximately 4.7 per
year or roughly 1,800 new residents per year.
Table 1 Population Trends
Description 2000 2005 2010 2016 Total Ann. #Ann. %
Bozeman 28,171 33,280 37,326 45,250 17,079 1,067 3.0%
Belgrade 5,839 6,728 7,469 8,254 2,415 151 2.2%
Three Forks 1,756 1,840 1,867 1,944 188 12 0.6%
Manhattan 1,443 1,503 1,514 1,691 248 16 1.0%
West Yellowstone 1,170 1,240 1,273 1,353 183 11 0.9%
Rest of County 29,996 35,719 40,182 46,010 16,014 1,001 2.7%
Gallatin County 68,375 80,310 89,631 104,502 36,127 2,258 2.7%
Montana 903,773 940,102 990,641 1,042,520 138,747 8,672 0.9%
Source: U.S. Census Intercensal Population Estimates; Economic & Planning Systems
2000-2016
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 13 Report
The Gallatin Valley is evolving from a rural to a more urban region. The surrounding communities,
such as Belgrade and unincorporated areas in Gallatin County, have also experienced significant
growth (Table 2, Figure 1). The Gallatin Valley (a roughly 10-mile east and south to 15-mile
west distance of Bozeman depending on topography) has a population of approximately 100,000
people. Every 10 years, the U.S. Census updates the urbanized and metropolitan area
designations, defined as areas with more than 50,000 people and a population density in a core
area of at least 1,000 people per square mile. Based on the region’s growth, the Gallatin Valley
may be designated as an urbanized area in 2020. This designation may make the region eligible
to form a metropolitan planning organization (MPO) to carry out regional transportation planning
and to receive federal transportation planning and construction funding.
Figure 1 Population Index, 2000-2016
Bozeman
Belgrade
Manhattan
Three Forks West Yellowstone
90%
100%
110%
120%
130%
140%
150%
160%
170%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Population Index
Source: U.S. Census Intercensal Population Estimates; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 14 Report
Approximately 43 percent of the Gallatin County population resides in Bozeman (Table 2).
Bozeman is also the economic hub of the County and represents approximately 77 percent of
total County employment. The median household income in Bozeman is nearly $46,000 per year,
which is slightly lower than the countywide average of approximately $55,500. Some of the
differences are attributed to the large student population in Bozeman which brings down the
median. When income figures are examined for renters and owners, Bozeman’s household
income is more similar to countywide figures. Owner households in Bozeman have a median
household income of $68,000 compared to the County median of $71,000. Just outside of
Bozeman in the unincorporated area, there are neighborhoods with large high-end homes and
luxury ranches where household incomes are higher.
The presence of Montana State University directly impacts the general demographics of
Bozeman. Incomes, the average age, and average household size in Bozeman are all lower than
the County as a whole. In addition, the proportion of renter households is significantly higher
than in the rest of the County.
Table 2 Gallatin County Demographic Summary
Description Bozeman Belgrade Four Corners Manhattan
Gallatin
County
Population
Total (2016)45,250 8,254 3,406 [1]1,691 104,502
% of County Population 43%8%3%2%100%
% of County Jobs (2014)77%7%7%1%100%
Household Income
Owner Households $68,282 $65,417 $84,881 $59,453 $71,022
Renter Households $33,887 $31,136 $48,250 $40,268 $35,014
All Households $45,729 $47,379 $78,142 $52,135 $55,553
Household Characteristics
Median Age 27.2 29.0 36.0 42.8 33.2
Avg. HH Size 2.22 2.58 2.74 2.18 2.39
Owner HHs (% of Total)44%59%81%73%62%
Renter HHs (% of Total)56%41%19%27%39%
[1] 2011-2015 American Community Survey 5-Year Estimates
Source: U.S. Census Bureau; 2011-2015 American Community Survey 5-Year Estimates; LEHD Origin-
Destination Employment Statistics; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 15 Report
Employment
Employment in Gallatin County has increased by approximately 26,000 jobs since 2001, which
equates to a growth rate of 2.9 percent per year (Figure 2). Between 2001 and 2015, the
largest gains in employment occurred in Real Estate and Rental and Leasing (3,039 job),
Professional, Scientific and Technical Services (2,984 jobs), Accommodation and Food Services
(2,646 jobs), Health Care and Social Assistance (2,412 jobs), Retail Trade (2,349 jobs), and
Construction (2,092 jobs) (Table 3).
These employment statistics include both wage and salary and proprietor jobs. Proprietors
employment (self-employed) comprises roughly 25 to 30 percent of the jobs in Gallatin County.
Proprietors are concentrated mainly in the Construction, Real Estate, and Professional Services
Industries.
Figure 2 Gallatin County Employment, 2001-2015
38,847 39,177 40,690 43,185 45,708 48,503 50,120 50,178 47,006 46,214 47,266 48,334 51,189 53,305 56,126
13,886 14,360 14,814 15,909 16,962 17,784 18,861 18,986 18,952 19,185 19,801 20,253 20,829 21,728 22,378
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
20
0
1
20
0
2
20
0
3
20
0
4
20
0
5
20
0
6
20
0
7
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
20
1
3
20
1
4
20
1
5
Total Employment Wage & Salary Proprietors
Source: BEA; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 16 Report
Table 3 Gallatin County Employment Trends, 2001-2015
Description 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Ann. #Ann. %
Employement (Wage & Salary and Proprietors)
Forestry, fishing, and related activities 420 503 451 479 497 480 520 596 540 527 575 620 (D)679 704 284 20 3.8%
Mining, quarrying, and oil and gas extraction 174 132 139 140 188 354 417 463 393 497 482 688 658 644 598 424 30 9.2%
Utilities (D)72 67 84 96 101 108 112 114 109 108 115 110 108 118 46 [1]4 [1]3.9% [1]
Construction 5,225 5,563 6,286 6,976 8,034 8,991 9,225 7,856 6,181 5,605 5,659 5,740 6,385 6,827 7,317 2,092 149 2.4%
Manufacturing 2,908 2,631 2,508 2,433 2,540 2,857 3,049 3,000 2,757 2,646 2,748 2,829 3,231 3,417 3,621 713 51 1.6%
Wholesale trade 1,359 1,374 1,357 1,494 1,577 1,635 1,715 1,740 1,673 1,700 1,680 1,774 1,941 1,905 2,082 723 52 3.1%
Retail trade 7,067 7,250 7,412 8,020 8,360 8,455 8,986 9,015 8,349 8,121 8,392 8,447 8,682 9,001 9,416 2,349 168 2.1%
Transportation and warehousing (D)1,042 1,046 1,066 1,128 1,385 1,402 1,451 1,303 1,262 1,301 1,427 1,524 1,634 1,696 654 50 3.8%
Information 695 692 695 834 927 903 919 939 876 896 968 966 956 860 998 303 22 2.6%
Finance and insurance 1,449 1,585 1,654 1,731 1,854 1,931 2,086 2,216 2,385 2,378 2,545 2,525 2,499 2,508 2,561 1,112 79 4.2%
Real estate and rental and leasing 2,727 2,843 3,037 3,426 3,958 4,362 4,687 4,749 4,710 4,834 5,007 4,982 5,153 5,496 5,766 3,039 217 5.5%
Professional, scientific, and technical services 3,966 3,917 4,063 4,450 4,800 5,345 5,914 6,058 5,704 5,729 5,826 5,983 6,390 6,614 6,950 2,984 213 4.1%
Management of companies and enterprises 43 45 48 40 62 50 61 101 108 199 211 218 240 280 322 279 20 15.5%
Admin. and support and waste mgmt. and remediation srvcs.1,645 1,707 1,791 2,037 2,140 2,354 2,343 2,456 2,262 2,289 2,299 2,307 2,491 2,671 2,851 1,206 86 4.0%
Educational services 646 656 697 745 830 994 979 1,067 1,090 1,124 1,191 1,252 1,307 1,436 1,494 848 61 6.2%
Health care and social assistance 3,655 3,846 3,905 4,148 4,340 4,609 4,414 4,639 4,872 5,077 5,201 5,520 5,667 5,813 6,067 2,412 172 3.7%
Arts, entertainment, and recreation 1,808 1,916 1,937 2,036 2,134 2,284 2,513 2,647 2,530 2,517 2,651 2,683 2,728 2,871 2,931 1,123 80 3.5%
Accommodation and food services 5,165 5,394 5,587 5,626 5,685 5,841 5,938 6,085 5,907 5,845 6,041 6,316 6,870 7,347 7,811 2,646 189 3.0%
Other services (except public administration)2,652 2,785 2,904 2,979 3,151 3,161 3,189 3,171 3,112 2,993 3,159 3,219 (D)3,584 3,722 1,070 76 2.5%
Government and government enterprises 8,682 8,147 8,592 9,081 9,167 9,051 9,397 9,644 9,917 9,851 9,770 9,660 9,867 10,014 10,144 1,462 104 1.1%
Farm employment 1,405 1,437 1,328 1,269 1,202 1,144 1,119 1,159 1,175 1,200 1,253 1,316 1,331 1,324 1,335 -70 -5 -0.4%
Total 52,733 53,537 55,504 59,094 62,670 66,287 68,981 69,164 65,958 65,399 67,067 68,587 72,018 75,033 78,504 25,771 1,841 2.9%
[Note] The estimates of employment for 2001-2006 are based on the 2002 North American Industry Classification System (NAICS). The estimates for 2007-2010 are based on the 2007 NAICS. The estimates for 2011 forward are based on the 2012 NAICS.
[1] 2002-2015
(D) Not shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals.
Source: Bureau of Economic Analysis; Economic & Planning Systems
2001-2015
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 17 Report
The Great Recession and Recovery
During the Great Recession (2008-2010) there was a reduction in employment in nearly every
sector. The most significant losses occurred in Construction, which saw a decrease of nearly 50
percent during that time period, and in Goods-Producing Industries, such as manufacturing,
natural resources, and mining (Figure 3). Employment in Retail, Accommodation, and
Recreation and Service-Providing Industries saw less significant reductions in total employment
during the Great Recession.
Between 2013 and 2014, employment in Retail, Accommodation, and Recreation, Goods-
Producing Industries, and Service-Providing Industries surpassed pre-recession levels. While the
Construction sector has not yet reached pre-recession levels, employment continues to increase
at a steady pace and based on current growth rates could surpass pre-recession levels by 2018.
Figure 3 Gallatin County Employment Index, 2008-2016
60
70
80
90
100
110
120
130
140
150
160
20
0
5
-
Q
1
20
0
6
-
Q
1
20
0
7
-
Q
1
20
0
8
-
Q
1
20
0
9
-
Q
1
20
1
0
-
Q
1
20
1
1
-
Q
1
20
1
2
-
Q
1
20
1
3
-
Q
1
20
1
4
-
Q
1
20
1
5
-
Q
1
20
1
6
-
Q
1
Employment Index Goods-Producing Industries Service-Providing Industries
Construction Retail, Accomodation, and Recreation
Source: BLS; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 18 Report
Between 2010 and 2015, growth in Accommodation and Food Service and Construction
represented roughly 15 and 13 percent of growth in total employment, respectively, (Figure 4).
These sectors combined with Retail Trade and Professional, Scientific, and Technical Services
represent nearly 50 percent of the new jobs added following the recession.
Figure 4 Share of Job Growth by Sector, 2010-2016
15%
13%
10%
9%
8%
7%
7%
6%
4%
3%
0%2%4%6%8%10%12%14%16%
Accommodation and food services
Construction
Retail trade
Professional, scientific, and technical services
Health care and social assistance
Manufacturing
Real estate and rental and leasing
Other services (except public administration)
Admin. and support and waste mgmt. and remediation srvcs.
Transportation and warehousing
% of Job Growt, 2010-2015
Source: BEA; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 19 Report
Employment by City
Bozeman continues to be the
economic hub of the region
with approximately 77 percent
of total Gallatin County
employment (Figure 5). While
Gallatin County employment
has historically been
concentrated in Bozeman, the
growth in the technology and
outdoor industries in the late
1990s accelerated this trend.
The concentration of high-tech
employment in Bozeman has
also translated to a high
number of startups in the city.
Since 2005, Bozeman has
captured roughly 80 percent of
total employment growth in the
County (Figure 6). This means
that for every 10 jobs created
in Gallatin County, eight were
in Bozeman.
Figure 5
Gallatin County Job Distribution, 2014
Figure 6 Share of Job Growth by Area, 2005-2014
Four Corners and Belgrade
represent nearly 15 percent of all
employment in Gallatin County.
While employment growth in
Belgrade has been consistent
with historical trends, growth in
Four Corners has increased
significantly. Between 2005 and
2014, roughly 15 percent of total
new employment in the County
occurred in Four Corners.
Bozeman
77%
Belgrade
7%
Four Corners
7%
Manhattan
1%
West Yellowstone
2%
Rest of County
6%
Source: U.S. Census Bureau, LEHD Origin-Destination Employment Statistics; Economic& Planning Systems
80%
7%
15%
6%
0%
-9%
-20%0%20%40%60%80%100%
Bozeman
Belgrade
Four Corners
Manhattan
West Yellowstone
Rest of County
% of Growth, 2005-2014
Source: U.S. Census Bureau, LEHD Origin-Destination Employment Statistics; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 20 Report
Average Firm Size
The average firm size in Gallatin County has decreased from 9.2 employees per firm in 2000 to
8.6 employees per firm in 2016. In sectors with the largest increases in total employment the
average firm size is 13.7 employees per firm, which represents an increase of 33 percent when
compared to the average firm size in 2000—indicating that many existing businesses have
expanded and some new larger employers have located in Bozeman. The largest increases were
in Construction, which increased from 4.7 employees per firm in 2000 to 10.0 employees per
firm in 2016, and Health Care and Social Assistance, which increased from 11.8 employees to
19.3 employees per firm during the same time period (Figure 7). Overall, these firm sizes show
that Bozeman’s economy is driven by small businesses.
Figure 7 Average Firm Size, 2000 and 2016
Migration
When a large portion of an area’s
population growth comes from
migration, it is a strong indicator
that the region has a dynamic
economy and is a desirable place
to live. Nearly three-quarters of
Gallatin County’s population
growth is from people moving
there (Table 4). While there
were many residents moving
from other areas in Montana,
such as the greater Missoula
area, there were also many
residents that moved from the
Front Range of Colorado, the
Pacific Northwest, and
California’s Bay Area.
Table 4
Gallatin County Net Migration, 2010-2015
17.2
10.0
19.3
14.1
13.3
8.2
15.7
4.7
11.8
10.9
14.8
3.9
Accom./Food Srvc.
Construction
Health Care and Social Asst.
Retail Trade
Manufacturing
Prof., Scientific, and Tech Srvcs.
2016 2000
Source: Bureau of Labor Statistics; Economic& Planning Systems
Description Total
Share of
Change
Population Change (2010-2015)
Births 7,134 49%
Deaths -3,256 -22%
Net Migration 10,815 74%
Total Population Change 14,693 100%
Source: U.S. Census Bureau; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 21 Report
Figure 8 Gallatin County In-Migration, 2011-2015
Economic & Planning Systems, Inc. 22 173007-Report 01-25-18.docx
3. BOZEMAN SOCIOECONOMICS
The previous chapter covered growth and economic trends in Gallatin County and the Gallatin
Valley. This chapter provides more specific information on the socioeconomic trends and
conditions in the City of Bozeman.
Economic Drivers
The Bozeman economy has five key segments that distinguish it from other midsized cities. This
economic mix also creates many opportunities but also some challenges.
• Higher Education – The presence of a major university affects the housing market, but also
creates opportunities for research and development partnerships, provides skilled labor, and
is a source of stable employment that buffers economic downturns.
• Tourism and Recreation – Bozeman is a “gateway community” that is, the gateway—or
jumping off point—for world class recreation including the Bridger and Bowl Big Sky ski
areas, pristine rivers and streams, and Yellowstone and Glacier National Parks.
• Health Care – Bozeman Health is a regional hub for health care in Southwest Montana,
employing over 1,000 people. There are numerous other clinics and doctors’ offices clustered
around the hospital and located throughout Bozeman.
• Technology – Rare in small cities, Bozeman is a hub for technology and research and
development companies that have both started in or moved into Montana. Major employers
range from companies focusing on software development to photonics R&D and manufacturing.
• Regional Trade Center – Bozeman serves at least a 150-mile trade area, making it the
premier retail, services, and health care hub in Southwest Montana.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 23 Report
This section describes the major economic drivers in Bozeman. This summary is based on the
information and analysis included in the 2017 Economic Profile of Gallatin and Park Counties
published by the Prospera Business Network, supplemented by research and analysis by EPS.
Higher Education
Montana State University is one of the primary
economic anchors in the City of Bozeman. In
2016, the University had a student headcount of
16,440 (Figure 9). Since 2009, the rate of
growth in the number of students grew at just
under 4 percent per year, which is significantly
higher than the historical growth rate since 1990,
which was closer to 1.0 per year. While this rate
of growth may not be maintained over the long-
term, the University will continue to be a major
driver in the local economy. The University also
employs roughly 3,100 employees and has $514
million in annual operations spending. The vast
majority of operations spending is paid to employees and Montana vendors.
Figure 9 MSU Student Enrollment and Total FTE Count, 1990-2016
16,440
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
19
9
0
19
9
1
19
9
2
19
9
3
19
9
4
19
9
5
19
9
6
19
9
7
19
9
8
19
9
9
20
0
0
20
0
1
20
0
2
20
0
3
20
0
4
20
0
5
20
0
6
20
0
7
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
20
1
3
20
1
4
20
1
5
20
1
6
MSU Headcount
Source: MSU; Economic& Planning Systems
1990-2008: 1.0% annual growth
2009-2016: 3.7% annual growth
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 24 Report
Tourism and Recreation
Tourism and recreation continue to be a major
driver in Bozeman and Montana. The Bozeman
area benefits from its proximity to some of the
State’s most beautiful natural amenities, such as
hiking trails and rivers and streams that are often
used for fishing and rafting, as well as its
proximity to Yellowstone National Park and two
popular ski areas: Bridger Bowl and Big Sky.
During the summer months, Yellowstone National
Park is the top destination for nonresident visitors
in Montana, many of whom pass through or spend
time in Bozeman. Since 2000, park visitation has increased at approximately 2.6 percent per
year or by roughly 89,000 visitors per year (Figure 10). Walking around Downtown Bozeman
one often hears foreign, mostly European, languages being spoken indicating the global draw of
the region.
Figure 10
YNP Annual Visitation, 2010-2016
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual Visitation
Source: Yellowstone National Park Reports; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 25 Report
Skier visits to Big Sky and Bridger have also consistently increased since 2000. Between 2000
and 2016, skier visits increased by an average of 2.5 percent per year, which equates to an
additional 14,000 visitors per year (Figure 11). Nationally, skier growth has been flat over the
long-term.
Figure 11 Annual Skier Visits, 2010-2016
0
100,000
200,000
300,000
400,000
500,000
600,000
20
0
0
-
2
0
0
1
20
0
1
-
2
0
0
2
20
0
2
-
2
0
0
3
20
0
3
-
2
0
0
4
20
0
4
-
2
0
0
5
20
0
5
-
2
0
0
6
20
0
6
-
2
0
0
7
20
0
7
-
2
0
0
8
20
0
8
-
2
0
0
9
20
0
9
-
2
0
1
0
20
1
0
-
2
0
1
1
20
1
1
-
2
0
1
2
20
1
2
-
2
0
1
3
20
1
3
-
2
0
1
4
20
1
4
-
2
0
1
5
20
1
5
-
2
0
1
6
20
1
6
-
2
0
1
7
Skier Visits Big Sky and Moonlight Basin Bridger
Source: University of Montana; USDA Forest Service, Northern Region and individual ski areas; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 26 Report
Health Care
The Health Care sector is one of the largest
employers in Bozeman and Gallatin County
and is a significant contributor to the regional
economy. Bozeman Health, which is composed
of two hospitals (one in Bozeman), several
treatment centers and urgent care centers,
and retirement and assisted living facilities, is
one of the primary drivers of the regional
health care sector. In addition, there are many
smaller local technology firms that are part of
the health care field and contribute to
economic growth in the region.
Technology
Bozeman continues to be a hub for
technological companies that are both started
in or moved into Montana. The city includes a
diverse set of technology companies that
range from software and hardware companies
to optics and photonics firms. The presence of
larger and more established firms, such as
Oracle, and the influence of Montana State
University creates a business environment
that is strongly entrepreneurial.
Regional Trade Center
Bozeman is a regional trade and service
center in Southwest Montana. Bozeman’s
retail, services, and healthcare businesses
serve a trade area of approximately 150 miles
or more. Serving this large of a trade area has
increased the amount of retail that Bozeman
can support. The influx of visitors has helped
the community diversify the retail and food
and beverage mix and strengthen downtown
through the additional injection of spending in
addition to the local and regional population.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 27 Report
Major Private Sector Employers
The largest private employers in Gallatin County are listed in Table 5. Bozeman Health
Deaconess Hospital is the largest employer in the County, while Oracle, Town Pump, and
Walmart are in the second tier of largest County employers.
Table 5 Largest Private Employers, Gallatin County, 2015
Employer Name Number of Employees
Bozeman Health Deaconess Hospital 1,000+
Oracle America 250-499
Town Pump 250-499
Wal Mart 250-499
Albertson’s 100-249
Bridger Bowl 100-249
Community Food Co-Op 100-249
Costco 100-249
Federal Premium Ammunition 100-249
First Student 100-249
JC Billion 100-249
Kenyon Noble Lumber & Hardware 100-249
Korman Marketing Group 100-249
Martel Construction 100-249
McDonald’s 100-249
Murdoch’s Ranch & Home Supply 100-249
Ressler Motors 100-249
Rosauer’s Super Markets 100-249
Target 100-249
Town & Country Foods 100-249
Zoot Enterprises 100-249
Source: Prosperra Business Network; Bureau of Labor Statistics Quarterly
Census of Employment and Wages; Montana Department of Labor &
Industry; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 28 Report
Bozeman Job Growth by Industry
From 2005 through 2014, employment growth in Education and Health Services, and Leisure and
Hospitality represented approximately 65 percent of the total job growth that occurred in
Bozeman (Table 6). Employment in Construction and Information both experienced contraction
in total employment. While many service related jobs have surpassed their pre-recession levels
there are others, such as Information, that have experienced a slower recovery and have not
fully recovered to their pre-recession levels.
There has been some redistribution of jobs in the Gallatin Valley. While Bozeman and Belgrade lost
employment in Construction, Manufacturing, and Trade and Transportation related sectors, Four
Corners and Manhattan gained employment in these same sectors. This is an indication of a more
competitive landscape where firms are moving to areas with lower land and development costs.
Table 6 Share of Job Growth by Sector, 2005-2014
Share of Job Growth Bozeman Belgrade Four Corners Manhattan
Natural Resources and Mining 1.2%0.0%-2.7%0.2%
Construction -2.2%-21.0%9.8%8.5%
Manufacturing 1.9%-15.5%3.8%2.5%
Trade, Transportation, and Utilities 0.8%-5.5%19.2%8.3%
Information -2.7%-1.5%3.3%4.2%
Financial Activities 1.9%-5.0%2.5%12.2%
Professional and Business Services 11.2%20.1%17.7%3.7%
Education and Health Services 30.5%44.1%24.1%29.3%
Retail Trade 7.0%26.6%7.6%9.9%
Leisure and Hospitality 35.0%43.2%6.4%13.2%
Other Services 8.5%14.8%8.3%2.3%
Government 6.8%-0.4%0.1%5.5%
Total 100.0%100.0%100.0%100.0%
Source: U.S. Census Bureau, LEHD Origin-Destination Employment Statistics; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 29 Report
Workforce Characteristics
Educational Attainment
Generally, the regional workforce is highly skilled and well educated. Approximately 56.5 percent
of the workforce has a bachelor’s degree or higher (Figure 12). The presence of Montana State
University and the high concentration of professional and high skill jobs—such as technology and
health care—are drivers of the highly educated local workforce. Places with a high quality of life
are also able to attract skilled labor. Highly educated skilled workers have more choices and
flexibility in where they choose to work and live.
Figure 12 Bozeman Educational Attainment, 2015
0.3%1.7%
12.5%
23.2%
5.9%
36.0%
20.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Less than 9th
grade
9th to 12th
grade
High school
graduate
Some
college
Associate's
degree
Bachelor's
degree
Graduate or
prof. degree
% of Total Population
Source: U.S. Census Bureau, Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 30 Report
Age Distribution
The population of Bozeman is younger when compared to the County and State. The median age
in Bozeman is 27.6 compared to a median age of 33.2 in Gallatin County and 39.9 in Montana.
The primary driver of this is the large number of students attending MSU. The proportion of the
total population between the age of 20 and 24 in Bozeman is 21.1 percent compared to 7.2
percent in Montana. Bozeman also has a higher proportion of people between the ages of 25 and
39 compared to Montana, due to the large number of students that remain in the area following
graduation and the appeal of the city to those that are in the early stages of their career.
Figure 13 Bozeman Age Distribution, 2015
Average Wages
Average wages for wage and salary employees in Gallatin County was $40,950 in 2016
(Figure 14). The highest wages were for jobs in Utilities, Mining and Oil and Gas, Finance and
Insurance, and Professional, Scientific, and Technical Services. Annual wages in these sectors
ranged from an average of $69,511 to $77,584. The lowest paying jobs were in Accommodation
and Food Service, Educational Services, and Retail Trade. Annual wages in these sectors ranged
from $19,357 to $30,511.
5.
5
0
%
4.6
0
%
3.2
0
%
9.
5
0
%
21
.
1
0
%
10
.
8
0
%
8.8
0
%
7.
5
0
%
4.
9
0
%
3.6
0
%
3.9
0
%
4.
7
0
%
3.8
0
%
2.
2
0
%
1.
8
0
%
1.0
0
%
1.
4
0
%
1.
6
0
%
6.
0
0
%
6.
4
0
%
6.
0
0
%
6.
4
0
%
7.
2
0
%
6.
2
0
%
6.3
0
%
5.8
0
%
5.
5
0
%
6.1
0
%
7.3
0
%
7.
7
0
%
6.
9
0
%
5.
4
0
%
3.9
0
%
2.
8
0
%
2.
1
0
%
2.
1
0
%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
% of Total Bozeman Montana
Source: U.S. Census Bureau; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 31 Report
Figure 14 Average Wages, Gallatin County, 2016
The distribution of employment growth between 2010 and 2016 is summarized by wage quartile
in Figure 15. Middle income jobs or jobs that pay between $49,000 and $64,000 per year
represent approximately 26 percent of total employment but only represent 6 percent of total job
growth between 2010 and 2016. Nearly half of the jobs created between 2010 and 2016 paid
less than $34,000 per year or less than $16.30 per hour. Nearly a quarter of the jobs created
during this time period paid over $64,000 per year or greater than $30.60 per hour.
Figure 15 Gallatin County Share of Job Growth by Wage Quartile, 2010-2016
$77,584
$74,360
$73,957
$69,511
$66,144
$63,674
$58,786
$57,217
$57,096
$49,797
$49,010
$45,906
$42,120
$40,950
$35,763
$35,672
$33,956
$31,356
$30,511
$26,949
$19,357
$0 $20,000 $40,000 $60,000 $80,000 $100,000
Utilities
Mining, Quarrying, and Oil and Gas Extraction
Finance and Insurance
Professional, Scientific and Technical Services
Health Care and Social Assistance
Management of Companies and Enterprises
Information
Public Administration
Wholesale Trade
Arts, Entertainment, and Recreation
Construction
Transportation and Warehousing
Manufacturing
Average Wage
Agriculture, Forestry, Fishing and Hunting
Real Estate and Rental and Leasing
Admin., Support, Waste Mng., and Rem. Srvcs.
Other Services, except Public Administration
Retail Trade
Educational Services
Accommodation and Food Services
Average Wage
Source: BLS; Economic & Planning Systems
47%
24%
6%
24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Less than $34,000
(Less than $16.30/hr)
$34,000-$49,000
($16.30/hr-$23.60/hr)
$49,000-$64,000
($23.60/hr-$30.60/hr)
Greater than $64,000
(Greater than $30.60/hr)
% of Job Growth
(2010-2016)
Source: Bureau of Labor Statistics; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 32 Report
Jobs in the roughly $20 to $30 per hour range are often “middle skill” jobs. These jobs pay a
living wage but do not require a four-year degree. The growth of low wage jobs and lack of
growth in middle skill and wage jobs is a national trend.
Workforce Shortage
Bozeman has a diverse workforce that is both highly educated and well trained. However, due to
the rapid rate of employment growth over the past decade, there is an imbalance between the
number of jobs available and available workers. The lack of available employees has negatively
impacted the ability of regional employers to find qualified employees. Employers in all sectors
ranging from manufacturing to technology have run into challenges associated with finding
qualified job candidates. Nationally and locally, a shortage of construction and trades workers is
contributing to higher housing costs.
A factor in the workforce supply is the “trailing spouse” challenge typical of smaller cities and
more remote regions that don’t have the agglomeration economies or larger metropolitan areas.
The challenge is that it may be difficult for couples or partners to both find adequate employment
due to the size of the overall economy and diversity of firms and job openings. This can be a
deterrent for firms and skilled labor.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 33 Report
Community Comparisons
For reference, some comparative statistics from communities that have some similar economic
and geographic characteristics to the City of Bozeman are shown below.
Table 7 Peer Community Demographics and Employment
Description Bozeman, MT Billings, MT Missoula, MT Fort Collins, CO Boulder, CO Bend, OR
Demographics
Population (2016)45,250 110,323 72,364 164,207 108,090 91,122
Median Age (2015)27.2 37.6 30.5 29.1 28.8 36.5
% Renters (2015)44.4%62.9%47.9%53.9%47.8%58.2%
Houshold Income
Owner $68,282 $65,965 $67,323 $83,228 $95,274 $71,201
Renter $33,887 $32,223 $26,530 $33,277 $34,036 $36,094
All Households $45,729 $51,012 $41,421 $55,647 $58,484 $52,989
Employment
# of Jobs (2014)37,774 66,886 46,231 74,498 88,963 44,516
Top 3 Sectors
#1 Educational Services Health Care and
Social Assist.
Health Care and
Social Assist.
Health Care and
Social Assist.Educational Services Health Care and
Social Assist.
#2 Retail Trade Retail Trade Retail Trade Educational Services Prof., Scientific, and
Tech Srvcs.Retail Trade
#3 Health Care and
Social Assist.
Accom. and Food
Srvcs
Accom. and Food
Srvcs
Accom. and Food
Srvcs Manufacturing Accom. and Food
Srvcs
Housing Stock
1 Unit (detached)40%61%53%56%41%69%
1 Unit (attached)11%6%4%9%8%4%
2 Units 10%6%6%2%2%5%
3 or 4 Units 15%6%11%5%7%5%
5 to 9 Units 8%5%6%7%8%4%
10 to 19 Units 6%3%6%9%9%2%
20 to 49 Units 4%2%6%5%10%2%
50 or more Units 3%4%4%3%11%4%
Other 3%7%5%3%3%4%
Total 100%100%100%100%100%100%
Higher Education
Major Colleges/Universities Montana State
University
Montana State
University
University of
Montana
Colorado State
University
University of
Colorado
Oregon State
University
Enrollment 16,440 4,429 12,419 33,198 32,775 31,303
% of Total Population 36%4%17%20%30%34%
Source: U.S. Census; Bureau of Labor Statistics; Economic & Planning Systems
Economic & Planning Systems, Inc. 34 173007-Report 01-25-18.docx
4. HOUSING MARKET TRENDS
This chapter provides an overview of major trends in the national housing market and in Bozeman,
organized as follows.
• National Housing and Demographic Trends – An overview of the major demographic
trends (Boomers and Millennials) and economic trends after the Great Recession that are
influencing the housing market.
• Household Characteristics and Affordability – An analysis of trends in renters and
owners, and housing affordability metrics (cost burden).
• Housing Price Trends – A summary of home price trends in the Gallatin Valley.
• Rental Market – A synopsis of the rental market in Bozeman, including an assessment of
the impact of students on the housing market.
• Construction Trends – An analysis of new residential construction data and MT Department
of Revenue tax parcel data to document construction trends by product type, land use
density, and location.
National Housing and Demographic Trends
The U.S. housing market is changing as broad demographic shifts occur and in part due to the
lingering effects of the Great Recession. The Baby Boom and Millennial generations are the two
largest demographic segments now and are influencing the housing market, along with other
consumer segments of the economy. These two generations at their current ages have higher
preferences for walkable, urban locations. After the Great Recession, many households
experienced a loss of net worth due to lost income and unemployment, the crash in housing
prices, and high household debt levels.
Housing Preferences
At least two national housing surveys indicate a likely shift in demand toward denser single
household detached housing types, such as townhomes and row houses in walkable/bikeable or
transit-accessible locations, and a shift away from lower density and single use single household
home neighborhoods. These preferences contrast with the trends in housing development for
much of last half of the 20th Century. The Baby Boom generation shares many of the same
preferences for housing as the millennials – modest cost, low maintenance, and close to
shopping and services and social activities and networks.1 These two groups account for about
41 percent of the U.S. population (52 percent in Bozeman, weighted towards student age
population). If a small percentage of these people migrate towards different housing types or
neighborhood types, it has a large impact on the housing market and on land use policy and it is
currently changing markets in U.S. cities large and small.
1 What Is Livable? Community Preferences of Older Adults. AARP, 2014.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 35 Report
The Urban Land Institute’s (ULI) survey of views on housing, transportation, and community,
“America in 2013,” found that demand will continue to rise for closer in, well located residential
development that is less car-dependent.
Sixty-one percent of respondents to the ULI survey prefer a smaller home with a shorter
commute over a larger home with a longer commute;
• 53 percent want to live close to shopping;
• 52 percent prefer to live in mixed-income housing; and
• 51 percent prefer access to public transportation.
A second national survey by ULI, “America in 2015,” found that just over half of all Americans,
and 63 percent of Millennials, would like to live in a place where they do not need to use a car
very often. Another notable survey by the National Association of Realtors (2011) following the
Great Recession had similar findings.
• Cost Matters: 59 percent of buyers will make trade-offs to stay within their budget,
highlighting a focus on housing affordability.
• Sense of Place: A majority prefer neighborhoods with a mix of houses, shops, and
businesses. Only 12 percent prefer traditional subdivisions with houses only.
• Walkability: 56 percent prefer walkable neighborhoods over conventional suburban
neighborhoods where a car is required for most trips.
• Convenience: 59 percent would downsize their home for a commute time under 20 minutes.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 36 Report
In 2011, EPS and the Sonoran Institute completed a study Reset: Assessing Future Housing
Markets in the Rocky Mountain West. A major finding was that buyers would pay more per
square foot to live in neighborhoods built in a style defined as compact walkable development
(CWD), 18 percent more on average before the recession. These areas also held their value
better than conventional neighborhoods during the recession, with prices per square foot 12.5
percent higher on average (Figure 16). CWD includes existing neighborhoods such as the areas
north and south of Main Street in Bozeman as well as new development built in a Traditional
Neighborhood Design (TND) style such as Valley West on the west side of Bozeman.
The premise of TND is many people do not utilize their whole yard or wish to maintain a large yard.
In a TND project, lot sizes are smaller, but there are parks and common open spaces located
throughout the neighborhood. This is a variation on a previous trend of golf course communities.
Many owners in these communities did not necessarily buy in that community for golf, but for
the experience of living next to a large open space. TNDs also focus heavily on walkability and
bicycle access through sidewalks, paths, and street design. Essentially, TND neighborhoods are
modelled after pre-war neighborhoods such as the original Bozeman neighborhoods north and
south of Main Street.
Figure 16 Price per square foot for compact walkable development, 2011
$289
$231
$110
$139
$175
$111
$267
$243
$144
$166
$210
$157
$50
$100
$150
$200
$250
$300
$350
Carbondale Eagle Buena Vista Bozeman Teton Valley Boise
$ per
Square Foot
Overall Market CWD
Source: LocalMLS; Economic & Planning SystemsSource: LocalMLS; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 37 Report
Household Income and Assets
During the Great Recession, seven years ago now, household net worth declined by over 40
percent due mainly to the crash in home prices, but also due to declines in other asset values
(e.g. stocks), and a high level of household indebtedness.2 In aggregate, household net worth
has recovered although other trends run counter to this aspect of the recovery.
The share of American adults living in middle-income households has fallen from 61 percent in
1971 to 50 percent in 2015 according to the Pew Research Center.3 Pew defines “middle-income”
households as those with an income that is 67 percent to 200 percent (two-thirds to double) the
overall median household income after incomes have been adjusted for household size. Upper
income households received 49 percent of U.S. aggregate household income went to upper-
income households in 2014, up from 29 percent in 1970. Middle-income households accounted
for 43 percent of total household income in 2014, down substantially from 62 percent in 1970.
The implications are that more households have less savings or assets available to make a down
payment on a home and lower income to be able to afford rent or mortgage payments. There
has been a recent resurgence in low-down payment mortgages in response.
In some parts of the U.S., the housing market became more focused on the move-up and luxury
market segments as the pool of first time buyers and middle-income buyers shrank. These
trends have contributed to the affordability challenges in cities nationwide.
Other notable statistics and considerations related to the Millennial generation are noted below.
• Diverse – Millennials are more racially and ethnically diverse than the U.S. population.
• Wealth and Income – Millennials, like Boomers, are also diverse in wealth and income.
Many graduated college during the Great Recession and had to take lower paying jobs than
they would have preferred, and many have large amounts of student loan debt. The National
Association of Realtors found that for the last four years buyers 36 years and younger
(Millennials/Gen Y) were the largest share of home buyers at 34 percent. Forty-six percent of
buyers 36 years and younger reported having student loan debt with a median loan balance
of $25,000.
• Highly mobile – Many Millennials, especially the well-educated, will look for a place to live
and then look for a job, and many work remotely. They are attracted to places with a high
quality of life, both in cities and mountain towns based on interviews conducted by EPS in
other Intermountain West cities and mountain areas.
• The Oldest Millennials are 36 – As Millennials age their housing preferences are likely to
change as their incomes rise and they start families. They may still prefer walkable
neighborhoods and access to mixed use areas, but may look for larger homes. Recent reports
from the National Association of Realtors note that Millennials are now the largest group of
homebuyers.
2 Household Wealth Trends in the United States, 1962-2013: What Happened over the Great Recession? Edward N. Wolff NBER
Working Paper No. 20733.
3 http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 38 Report
Household Characteristics and Affordability
In Bozeman, the most recent American Community Survey figures estimate that 56 percent of
households are renters and 44 percent are owners (Figure 17). The 16,440 MSU students are a
major influence on this figure. The distribution of renters and owners has not changed
significantly over the 16 years shown here.
Figure 17
Bozeman Housing Tenure, 2000, 2010, 2016
43%45%44%
57%55%56%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2010 2015
% of Total
Households Owner Renter
Source: U.S. Census Bureau; Economic& Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 39 Report
The U.S. Department of Housing and Urban Development (HUD) defines a household as being
“cost burdened” when it is paying 30 percent or more of its income to rent or mortgage
payments. In Bozeman, 22 percent of owner households are paying more than 35 percent of
their income in rent and 9 percent are paying between 30 and 35 percent (Figure 18). For
renters, 44 percent are paying more than 35 percent of their income to rent (Figure 19).
Another 8.0 percent pay between 30 and 35 percent of their income in rent. Unfortunately, the
Census does not allow us to differentiate between students and the resident employee
population. Nevertheless, this is a large proportion of cost burdened households.
Figure 18
Percent of Owner Households Spending Over 30% of Income on Housing, 2015
Figure 19 Percent of Renter Households Spending Over 30% of Income on Housing, 2015
30%
14%
22%
27%
7%
34%
25%
19%
16%
7%
27%
23%
17%
17%
15%
0%10%20%30%40%50%60%70%
Less than $20,000
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 or more
Bozeman Montana United States
Source: U.S.Census Bureau; Economic& Planning Systems
47%
34%
15%
4%
1%
59%
29%
9%
3%
0%
49%
30%
13%
6%
2%
0%10%20%30%40%50%60%70%
Less than $20,000
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 or more
Bozeman Montana United States
Source: U.S.Census Bureau; Economic & Planning Systems
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 40 Report
Housing Price Trends
As of August 2017, the median home price in Bozeman was $398,000 up from $245,000 as the
recovery from the Great Recession began (Figure 20). The annual appreciation rates over the past
five years have been in the 10 to 12 percent per year ranges in and around Bozeman, Belgrade,
Livingston, and Three Forks. Home prices are highest just outside Bozeman city limits for homes
with large acreage. Home prices in Downtown Bozeman begin at approximately $500,000 to
$600,000 for a home that has not been updated and needs major maintenance and upkeep. New
construction, often redevelopment, in the Downtown area can be priced over $1.0 million.
Figure 20 Median Sale Price by Area, 2003-2017
To afford the median priced home in Bozeman at the 30 percent of income affordability standard, a
household needs to earn at least $68,400 per year or $32.00 per hour for one earner (Table 8).
The median household income for owner households is currently about $68,000 indicating that
overall home prices are still in line with incomes at this broad statistical level. These figures
however do not account for the quality of the housing available at this price. In addition, it is the
rapid increase in home values that people are experiencing especially since wages in incomes
have not kept pace with housing cost increases. While homes are more affordable in the
surrounding communities, there are additional transportation costs for people who work in
Bozeman but commute from surrounding areas.
Demographic and Real Estate Market Assessment
January 25, 2018
Economic & Planning Systems, Inc. 41 Report
Table 8 Income Required to Afford the Median Priced Home
Factors Bozeman Belgrade
Bozeman Outside
City Limits Manhattan
Median Single Family Home $398,000 $308,000 $492,000 $260,000
Down Payment 10%-$39,800 -$30,800 -$49,200 -$26,000
Mortgage Amount $358,200 $277,200 $442,800 $234,000
Monthly Payment - 30-Yr. Fixed 4.0%$1,710 $1,323 $2,114 $1,117
Annual Payment 12 $20,521 $15,881 $25,368 $13,406
Required Household Income 30% of income $68,404 $52,936 $84,560 $44,686
Median Owner Household Income $68,282 $65,417 $84,881 $59,453
Required Income as % of Median Household Income 100%81%100%75%
Source: Gallatin Assocation of Realtors; US Census; Economic & Planning Systems
\\EPSDC02\Proj\173007-Bozeman Land Use Forecasts\Data\[173007-Affordability Calcs.xlsx]Afford
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Economic & Planning Systems, Inc. 42 Report
Rental Market
Rental market information comes from the 2014 Bozeman Rental Housing Survey, EPS research
of rental listings, and interviews with local realtors. There are no published statistics on the
Bozeman apartment market.
• Vacancy Rates – As noted in the 2014 Housing Survey, the rental market is very tight with
vacancy at less than 5.0 percent which accounts only for unit turnovers between tenants.
Approximately 600 multifamily units were built since this survey which has helped to ease
the supply constraints somewhat.
• Planned Development - There is new development under construction and under review
that will help expand the rental housing supply. The Icon Apartments are in zoning review
(Ferguson Farm, 348 units), as are Sundance II (188 units) and the Bozeman West
Apartments (216 units). There are also 268 units of student housing (887 beds) under
construction now. In 2016, MSU opened a new approximately 400 bed dorm and recently
announced plans for another 400-bed dorm.
• MSU Enrollment – Enrollment at MSU increased by 2,900 students from 2010 through 2016
(21 percent), and MSU is expected to continue to grow over the next 5 to 10 years. Student
growth combined with the strong job growth in the region has created even more demand for
rental housing. MSU students live in nearly all neighborhoods in Bozeman.
• Rental Rates – Two-bedroom rental rates average approximately $1,200 per month. The
student market drives a large portion of rental rates. Student housing is typically priced at
$500 to $600 or more per bedroom per month. This equates to over $1,000 per month for
two-bedroom unit, and $1,500 or more per month for a single household home rental.
Impact of Students on Rental Rates
As shown in the example below, three students paying $550 per month equate to a monthly
housing payment of $1,650. This is roughly equivalent to the mortgage payment on a $345,000
home, 5 percent less than the median priced home of $360,000 (Table 9).
Table 9 Student vs. Local Housing Payment Example
3 Students
One Full Time
Resident Household
Student 1 $550
Student 2 $550
Student 3 $550
Total Rent $1,650 $1,650
Annual Housing Cost $19,800 $19,800
Percent of Median Household Income ---43%
Median Household Income ---$45,729
Rent in Equivalent Home Value [1]$345,611
[1] 10% down payment; 30 year fixed rate mortgage; 4.0% interest.
Source: Economic & Planning Systems
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Construction Trends
In Bozeman, approximately 7,200 housing units were constructed from 2005 through 2016, an
average pace of 600 units per year (Table 10). The two most common types of housing built
were single household detached homes (2,681 units) and multifamily buildings (mostly
apartments) with five or more units. While classified as “5+plexes”, these are typically apartment
buildings with 50 or more units per building.
Table 10 Residential Construction Trends, 2005-2016
Description 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total Average
Single Family 266 244 214 99 74 143 161 247 388 283 266 296 2,681 223
ADU 3 2 9 8 10 2 10 11 6 13 14 9 97 8
Townhouse 62 62 71 43 19 21 4 38 74 77 24 72 567 47
Duplex 130 62 82 26 8 8 8 28 14 40 35 74 515 43
Triplex/Fourplex 199 123 60 42 38 17 10 9 24 42 44 63 671 56
5+ Units 406 210 332 143 62 51 23 102 308 453 399 219 2,708 226
Total 1,066 703 768 361 211 242 216 435 814 908 782 733 7,239 603
Source: City of Bozeman; Economic & Planning Systems
2005-2016
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As a percentage, single household homes increased from 31 percent of construction during the
2005 to 2010 time period to 43 percent in the 2011 to 2016 time period. “Middle density” units
including duplexes, townhomes, and triplex/fourplexes declined from 32 percent of the market to
18 percent of the market. Higher density construction stayed about the same at 36 percent over
the 2005 to 2010 time period and 39 percent of the more recent five-year period.
Figure 21 Units Built by Density Type, 2005-2010 and 2011-2016
These middle density unit types provide additional choices for housing types—small and lower
maintenance—and can sometimes be built more affordably than larger single household homes.
When priced attainably, they also provide another option for first time buyers, or people who
want a lower cost home, to build equity. There is therefore a policy interest in seeing more
construction of middle density unit types to increase affordability opportunities and to expand
housing choices.
31%
43%
8%
8%
10%
5%
14%
5%
36%
39%
0%10%20%30%40%50%60%70%80%90%100%
2005-2010
2011-2016
% of Total UnitsSingle Family Townhouse Duplex Triplex/Fourplex 5+plex
Source: Cityof Bozeman; Economic& Planning Systems
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The average single household lot size has dropped about 20 percent from the early 2000s
through the late 2000s (Figure 22). For example, in the Valley West subdivision, built in a
Traditional Neighborhood Design (TND) style, approximately 40 percent of the lots are between
5,000 and 7,500 square feet and a quarter are smaller than 5,000 square feet. Laurel Glen, built
in the late 2000s has most lots in the 6,500 to 8,500 square foot size range. Most of the lots in
the Valley Subdivision (between Babcock and Durston) are between about 9,000 and 10,000
square feet, built in the late 1980s through the 1990s. Lot sizes reflect ‘net densities’. When the
park/open space and amenity features of TND are included, the overall density may not be
significantly higher (i.e. more units per acre) than a conventional subdivision.
Figure 22 Average Single household Lot Size by Year Built
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Like many cities surrounded by undeveloped and/or agricultural land, Bozeman is growing
outward, primarily to the west but also to the south (Figure 23). There have also been
approximately 100 homes built in Downtown area neighborhoods since 2012. These are
comprised of the redevelopment of existing single household homes with new single household
homes, and townhome and condominium infill and redevelopment projects. These data do not
include ADUs.
Figure 23 Residential Development by Location and Year Built
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Economic & Planning Systems, Inc. 47 173007-Report 01-25-18.docx
5. RETAIL MARKET
This chapter begins with an overview of the changes in the national retail market and its
potential impact on Bozeman. Next, it presents an analysis of citywide spending potential
compared to the current major retailer inventory, followed by an evaluation of B-1 and B-2
commercial zone areas.
National Retail Market
The retail industry has shifted greatly over the last 10 to 15 years, impacted by the growth of
internet sales, declining brick and mortar store sales, retail chain consolidations, and
demographic shifts and preferences. Collectively, these trends are impacting store sizes and
reducing the overall demand for new retail space locally and nationally.
The Rise of E-Commerce
Between 2001 and 2015, total online retail purchases (excluding auto related) grew from
approximately $29 billion to $310 billion, a 21.8 percent annual growth rate. Online sales
accounted for 22 percent of total retail sales growth (Figure 24). During the same period, brick
and mortar stores grew at a 3.7 percent annual growth rate, decreasing their share of the total
retail market from 98 percent to 89 percent. Despite still accounting for only 11 percent of
overall spending, the growth in online shopping is impacting the demand for traditional brick and
mortar stores. This also affects the way retailers are doing business, pushing them to alter store
formats and incorporate online sales and marketing into their business concepts. The list of top
online retailers reinforces this point as many have a significant brick and mortar presence as
well. This group includes such major retailers as Walmart, Target, Home Depot, Best Buy, and
Bed Bath & Beyond.
Figure 24 US E-Commerce Sales, 2001-2014
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Several national trends impacting the existing inventory of retail stores as well as new
development are highlighted below:
• Social Media and “Showrooming”- According to the National Retail Federation, 86 percent
of American consumers at least occasionally research items online before buying in a store;
of this, 22 percent conduct this research primarily on blogs and 32 percent primarily on
Facebook. Electronics is most researched, followed by apparel, appliances, and then shoes.
Many consumers will also look at or try on an item in a store and then price shop and
purchase it online.
• Spending Patterns - Changes in spending patterns are also affecting the amount and mix
of retail space. Millennials, who are highly mobile, are less likely to accumulate furniture and
home furnishings and other large, high cost items. They are also more interested in
experiences, emphasizing travel and entertainment over material goods. Their spending
patterns are similar to the boomer generation who has already purchased much of the goods
they need and are downsizing their homes and accumulated items. Boomers are also
spending more of their income on travel, leisure, entertainment, and dining out.
• Changing Retail Mix - These changes in spending patterns are impacting the mix of retail
space in aggregate and in downtowns in particular. The restaurant, bar, and microbrewery
segment has grown rapidly and new food and beverage formats have been introduced (e.g.
food halls and market halls, farm to table restaurants, and food trucks). The growth of
shoppers goods store space (general merchandise, apparel, furniture, and other shopper’s
goods) is flat or declining in contrast as exhibited by numerous closures by Macy’s,
JCPenney, Sears, and Kmart.
• Store and Chain Closures - Over the past five years, there have been nearly 200 retail
chain bankruptcies. In 2017, CNN Money reported that there were 5,300 store closing
announcements through June 20 compared to 6,200 in 2008 during the Great Recession—the
worst year so far for store closings. There are fewer stores in the market now, making it
more difficult to find tenants for new retail developments. Vacancies are increasing nationally
as large blocks of space are vacated by store brands that no longer exist.
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Bozeman Retail Development
Retail development in Bozeman is concentrated along two major arterials that include U.S.
Highway 191 (W. Main Street and Huffine Lane) and North 19th Avenue (Figure 25). U.S.
Highway 191, including Bozeman’s historic downtown along Main Street, is a vibrant corridor of
retail and restaurant spaces that is frequented by locals and tourists throughout the year. Retail
development to the west of downtown Bozeman along Hwy 191 includes smaller strip malls and
commercial nodes as well as Bozeman’s regional mall, the Gallatin Valley Mall.
Historically, N. 19th Avenue was defined by low density retail uses, such as car washes and auto
dealerships. However, with the addition of several big box retailers that include Home Depot,
Target, and Costco, the N. 19th Avenue corridor is now a regional node for big box retailers and a
destination for those living in and outside of Bozeman. Development along this corridor is
anticipated to continue to be defined by large format users that draw demand at the regional level.
Figure 25
Retail and Commercial Development Areas
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Retail and Commercial Construction Trends
Since 2000, Bozeman added at least 1.0 million square feet of retail and commercial buildings
(Table 11). The data shown include mostly retail uses as classified by the State Department of
Revenue tax parcel data. It does not include other types of miscellaneous commercial and
automotive buildings. Bozeman captured approximately 70 percent of the market for retail
construction and over 90 percent of the market for new accommodations construction.
Table 11
Retail/Commercial and Hotel Construction Trends
Retail Inventory
From a planning level inventory of commercial retailers in Bozeman, there are a wide variety of
national grocery chains, big box retailers, and smaller local stores. There are seven full service
supermarkets (including the Walmart Supercenter) in Bozeman plus several smaller specialty
food stores and independent grocers such as the Community Food Co-op (Table 12).
Bozeman also has most of the national anchor retailers that are still active in the market,
including Costco, Target, Home Depot, Lowes, Kohls, and Macy’s. While a number of these stores
are located within the Gallatin Valley Mall, an increasing number have located along the N. 19th
Avenue corridor.
2000-2006 2007-2011 2012-2016 Total Sq. Ft.Ann. Sq. Ft.Market Share
Belgrade Area
Hotel/Motel 36,456 0 0 36,456 2,144 5.5%
Retail/Commercial 76,442 71,523 25,258 173,223 10,190 11.8%
Bozeman
Hotel/Motel 81,729 249,109 287,698 618,536 36,384 93.1%
Retail/Commercial 323,096 475,784 223,684 1,022,564 60,151 69.5%
Four Corners Area
Hotel/Motel 0 0 9,150 9,150 538 1.4%
Retail/Commercial 138,990 84,784 52,236 276,010 16,236 18.8%
Greater Bozeman Area
Hotel/Motel 118,185 249,109 296,848 664,142 39,067 100.0%
Retail/Commercial 538,528 632,091 301,178 1,471,797 86,576 100.0%
Source: Gallatin County GIS; City of Bozeman GIS; Economic & Planning Systems' Analysis
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Table 12 Bozeman Retail Inventory
Store Type
Description Avg. Sq. Ft.
Supermarkets and Grocery Stores
Walmart Supercenter 220,000
Town & Country Foods (2 stores)70,000
Safeway 65,000
Albertsons 65,000
Smith's 50,000
Rosauers 50,000
Huckleberry's Natural Market 20,000
Heebs East Main Grocery 10,000
Community Food Co-op 10,000
Shopper's Goods
Costco Wholsale 120,000
Target 120,000
Kohls 60,000
Macy's 50,000
Sportsman's Warehouse 50,000
Wholesale Sports 50,000
Dollar Spree 50,000
Dollar Tree 50,000
REI 25,000
T.J. Maxx 20,000
Ross 20,000
Sears 20,000
JCPenney 20,000
Play it Again Sports 20,000
Gap Outlet 10,000
Joann 10,000
White House Black Market 10,000
Other Shopper's Goods
Gallatin Valley Furniture 35,000
Barnes and Noble 20,000
Office Depot 20,000
Staples 20,000
Petco Animal Supplies 20,000
PetSmart 20,000
Mattress King 10,000
Building Material & Garden
The Home Depot 150,000
Lowe's Home Improvement 150,000
Kenyon Noble Lumber and Hardware 100,000
Murdoch's Ranch & Home Supply 50,000
Source: Economic & Planning Systems
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Retail Demand
This section compares household spending patterns to Bozeman’s retail inventory. It shows that
Bozeman has a sufficient supply of retail to serve residents as well as a larger regional trade
area. Commercial businesses in the city rely on spending from local households, households
living in the Gallatin Valley area and travelling to the city for their retail needs, and tourists.
While the ratio between local spending and inflow ranges by store type, comparing local
spending potential to the existing inventory of stores provides an indication of the amount of
inflow supporting commercial development in the city.
A local trade area for Bozeman was defined as an approximately 15 to 20-mile (depending on
topography) trade area around the city. Spending from this trade area is estimated to support
approximately 1.71 million square feet of retail development (Table 13). This is based on an
estimated 42,000 households in and around the city, an average household income of nearly
$46,000, and retail spending equating to 35 percent of total household income.
Supermarkets and Grocery Stores
Local spending is estimated to generate enough demand for approximately five full service
supermarkets at an average size of 55,000 square feet. As noted earlier, Bozeman currently has
seven full service supermarkets plus other smaller independent and specialty food stores. This
indicates that approximately two-thirds of the total space is supported by spending from the local
trade area. The remaining one-third is supported by inflow from more outlying areas and visitors.
General Merchandise
Local spending also generates enough demand for roughly three general merchandise stores
(e.g. Walmart, Target, Kohls, and Costco). There are currently four major general merchandise
stores in the city, indicating that additional spending flows into Bozeman from the larger
Southwest Montana regional trade area.
Building Material and Garden
Local households generate enough demand to support roughly two building material and garden
centers. There are now two major home improvement centers (Lowes and Home Depot) plus
several other hardware and building supply businesses such as Ace Hardware, Murdoch’s,
Kenyon Noble, and Empire Building Materials in the city. Like supermarkets and general
merchandise stores, slightly more than half of the existing building material and garden space is
supported by local spending. The rest of the demand comes from the construction industry and
the larger Southwest Montana regional trade area.
Market Potentials
Bozeman is more than adequately supplied with regional and community level retail
development. Any additional development will need to result from two sources. First is the
continued growth of Bozeman and the Gallatin Valley. Additional household and business growth
generates demand for retail space, and substantial growth may be needed to support more
retail—especially community shopping center formats anchored by a supermarket. Second, while
unpredictable, new brands or store formats do emerge and look for new markets to enter and
compete with the existing store offerings. Bozeman is likely a good ‘test market’ in Montana for
new retail concepts.
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Table 13 Bozeman Supportable Commercial Area: Local Spending
Retail Sales Expenditure Avg. Sales Capture Supportable Average Est. Stores Existing
Store Type % of Total (2012)Potential Per Sq. Ft.Rate Square Feet Store Size Supported Stores
($000s)
Spending Potential
Housholds (Greater Bozeman Area) [1]41,621
Average Household Income $45,729
Total Personal Income (TPI) ($000's)100%$1,903,287
Convenience Goods
Supermarkets and Other Grocery Stores 6.9%$131,692 $450 100%293,000 55,000 5.3 6+
Convenience Stores (incl. Gas Stations)2.0%$37,671 $300 100%126,000 5,000 25.2 N/A
Beer, Wine, & Liquor Stores 1.1%$20,493 $300 100%68,000 5,000 13.6 N/A
Health and Personal Care 1.7%$31,701 $400 100%79,000 20,000 3.9 N/A
Total Convenience Goods 11.6%$221,558 $403 100%566,000
Shopper's Goods
General Merchandise 7.2%$136,827 $455 100%315,000 100,000 3.1 4
Other Shopper's Goods 6.9%$132,253 $337 75%311,250 N/A N/A N/A
Total Shopper's Goods 14.1%$269,080 $397 93%626,250
Eating and Drinking 6.1%$115,904 $350 95%314,450 N/A N/A N/A
Building Material & Garden 3.3%$62,149 $300 100%207,000 100,000 2.0 3
Total Retail Goods 35.1%$668,690 $382 94%1,713,700
[1] Roughly includes the 20 mile area around Bozeman
Source: 2012 Census of Retail Trade; Economic & Planning Systems
Local Spending
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Commercial Zoning Evaluation
This section evaluates some of the issues with supporting and growing retail and commercial
services and businesses closer to housing and well-located community serving commercial and
retail areas. The Community Plan promotes neighborhood oriented commercial space located
close to and integrated with residential neighborhoods, accessible by walking, bicycling, or a
short car trip. To allow and support community and neighborhood commercial development, the
City created two zoning districts, B-1 and B-2.
• B-1 Neighborhood Business Districts – “The intent of the B-1 neighborhood business
district is to provide for smaller scale retail and service activities frequently required by
neighborhood residents on a day to day basis, as well as residential development as a
secondary purpose, while still maintaining compatibility with adjacent residential land uses.
Development scale and pedestrian orientation are important elements of this district.”
• B-2 Community Business Districts – “The intent of the B-2 community business district is
to provide for a broad range of mutually supportive retail and service functions located in
clustered areas bordered on one or more sides by limited access arterial streets. The intent
of the B-2M community business district—mixed is to function as a vibrant mixed-use district
that accommodates substantial growth and enhances the character of the city. This district
provides for a range of commercial uses that serve both the immediate area and the broader
trade area and encourages the integration of multifamily residential uses as a secondary use.”
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The locations of the B-1 and B-2 areas are shown in Figure 26. It is notable that the half mile
trade areas around many B-1 zones overlap meaning that B-1 districts are located too close to
each other and therefore are competing with each other. There are some B-1 zoning areas that
may have antiquated zoning that assumed a past development plan that is no longer viable.
Others have poor access and no utilities. Going forward, these types of areas should be
considered for rezoning.
The issue is that many B-1 and B-2 areas have been slow to develop, which has resulted in a few
concerns. First, residents have supported the idea of having these services and businesses close
by; the goals of the Community Plan are therefore not being realized. Second, land owners have
requested rezonings and other variances to allow them to develop their properties sooner.
Figure 26 B-1 and B-2 Commercial Districts
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B-1 and B-2 Development Prototypes
To address concerns about how much B-1 and B-2 land is needed, the size of the B-1 neighborhood
centers, and development timing, we have developed prototypical development scenarios.
For the purposes of this analysis, a prototypical B-1 district is assumed to be 10 acres. The current
average size of a B-2 district (not including the Huffine/Main Corridor) is 75 acres (Table 14).
• To account for the undevelopable area of each district that will be dedicated to set-backs,
rights-of-ways, streets and sidewalks, an efficiency factor of 75 percent is applied to the
gross acreage to calculate the net developable area.
• To calculate the building area that can be developed on the net developable acreage a floor
area ratio (FAR) of 0.30 is applied in B-1 districts and a slightly lower density of 0.25 is
applied in B-2 districts.
• Finally, this analysis accounts for a typical business mix. In B-1 districts, 60 percent of the
building area is assumed to be developed as office or non-retail uses, 20 percent is assumed
to be developed as restaurant and/or bars, and 20 percent is assumed to be developed as
retail space. In B-2 districts, 25 percent of the area is assumed to be developed as non-retail
uses, 25 percent as restaurant and/or bar space, and 50 percent as retail.
Based on these assumptions, a 10-acre B-1 district can accommodate nearly 40,000 square feet
of retail, food and beverage, and office/service development. A larger B-2 district can
accommodate approximately 460,000 square feet of retail, food, and beverage development.
Table 14 B-1 and B-2 Development Capacity
Description B-1 District B-2 District
Prototype Land Area (Acres)10.00 75.00
Developable Area (% of Total)75%75%
Developable Area (Acres)7.50 56.25
Developable Land Area (Sq. Ft.)326,700 2,450,250
Development Density (FAR)0.30 0.25
Development Potential (Sq. Ft.)98,010 612,563
Office/Service/Non-Retail (% of Total)60%25%
Restaurant and Bar (% of Total)20%25%
Retail (% of Total)20%50%
Retail & Food & Beverage Development Capacity (Sq. Ft.)39,204 459,422
Source: Economic & Planning Systems
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Retail demand in B-1 zones is evaluated in the context of the amount of space supportable by
households living within a 0.5 to 1.0-mile radius. While B-2 districts are anticipated to include
some amount of neighborhood oriented commercial space, they were primarily envisioned as
locations for community shopping centers. Traditionally, community shopping centers are
anchored by grocery stores that help attract other ancillary retail and service businesses. Their
trade areas are typically at least two miles at suburban and small city housing densities.
B-1 Neighborhood Business District Analysis
Generally, neighborhood oriented commercial space is frequented by households residing within
a radius of 0.5 to 1.0 miles. Throughout Bozeman, the number of households living with this
radius of existing B-1 districts varies greatly. In order to provide an estimate of supportable
retail, food, and beverage space, this analysis estimates the number of households needed to
create the demand to support the amount of space that can be developed in a B-1 area.
A likely tenant mix for a B-1 district is proposed as follows:
• Convenience Goods – A small market or specialty foods store.
• General Merchandise – None. In the current retail market, this store category is dominated by
national discount retailers that look for regionally accessible locations (e.g. N. 19th Avenue)
and large building footprints not compatible with the intent of B-1 zoning.
• Other Shopper’s Goods/Misc. Retail – A modest amount of miscellaneous retail (e.g.
children’s clothing, florist, arts and crafts, stationary).
• Eating and Drinking – A neighborhood café, coffee shop, restaurant, or bar.
The retail spending factors used in the B-1 prototype are explained below:
• Households spend approximately 35.1 percent of their total household income on retail goods.
• While required average sales per square foot vary by retail categories, we have estimated
that average sales of just under $300 per square foot per year on average are needed for a
business to be viable.
• Neighborhood resident spending capture rates vary by commercial type, location, and
development scale. For the purposes of this analysis, a weighted capture rate of 11.0 percent
is estimated for B-1 districts. This capture rate reflects a 15 percent capture of spending on
convenience goods, 5 percent on shoppers goods, and a 10 percent capture of spending on
eating and drinking.
It is estimated that a B-1 district with 500 residents within 0.5 to 1.0 miles can support
approximately 2,000 square feet of retail, food, and beverage space. However, a vibrant
neighborhood commercial center needs a larger ‘critical mass’ of space to be viable, judged to be
in the 20,000 to 30,000 square foot range. Therefore, a B-1 district requires approximately
3,500 to 5,500 households within a 0.5 to 1.0-mile radius (Table 15).
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Table 15 B-1 District Supportable Square Feet by Number of Households
% of Total Avg. Sales Spending
Store Type Spending Per Sq. Ft.Capt. Rate
Households (Surrounding Area)500 1,500 2,500 3,500 4,500 5,500 6,500
Retail Spending
Convenience Goods 11.6%$300 15.0%1,800 5,400 9,150 12,750 16,350 19,950 23,700
General Merchandise N/A N/A N/A 0 0 0 0 0 0 0
Other Shopper's Goods 6.9%$275 5.0%400 1,200 1,950 2,750 3,550 4,350 5,150
Eating and Drinking 6.1%$275 10.0%700 2,100 3,500 4,800 6,200 7,600 9,000
Building Material & Garden N/A N/A N/A 0 0 0 0 0 0 0
Total Retail Sq. Ft.24.7%$287 11.0%2,900 8,700 14,600 20,300 26,100 31,900 37,850
[1] 2010-2014 ACS Estimate
Source: 2012 Census of Retail Trade; Economic & Planning Systems
Supportable Square Feet
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New residential development in the city is currently being developed at a density of 4.0 to 7.0
dwelling units per net developable acre (DU/acre) with most occurring at the lower density
range. Residential development with a net density of 6.0 DU/acre results in approximately 2,300
households within a 0.5-mile radius and can support roughly 11,000 square feet of commercial
development (Table 16).
Net density of approximately 4.5 units per acre
Net density of approximately 7.0 units per acre.
Table 16 Development Capacity (0.15, 0.5, and 1.0-mile radius)
Description 0.25 mi 0.50 mi 1.00 mi
Developable Area
Gross Developable Area (Acres)125.6 502.4 2,009.6
ROW (25% of gross)31.4 125.6 502.4
Net Developable Area (75% of gross)94.2 376.8 1,507.2
Housing Units and Net Density
5.0 DU/Acre 471 1,884 7,536
6.0 DU/Acre 565 2,261 9,043
7.0 DU/Acre 659 2,638 10,550
8.0 DU/Acre 754 3,014 12,058
9.0 DU/Acre 848 3,391 13,565
10.0 DU/Acre 942 3,768 15,072
11.0 DU/Acre 1,036 4,145 16,579
12.0 DU/Acre 1,130 4,522 18,086
Source: Economic & Planning Systems
Surrounding Radius
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B-1 Zoning Conclusions
• At current household densities, B-1 commercial centers must rely on spending from
households outside of a 0.5-mile radius they were envisioned to serve. Some B-1s meet this
criterion as they are located on arterial streets, or are on or near the N. 19th Avenue corridor
and therefore benefit from additional traffic and visibility. In other words, current densities—
especially on the periphery of Bozeman—are not high enough to support significant retail
demand in a B-1 without being able to draw from a larger area.
• If the density of surrounding development is increased, B-1 commercial centers can be made
more viable and development may accelerate in them. Retail and restaurant businesses in
B-1 neighborhood centers start to become more viable, assuming a half mile trade area, at
an estimated net density of 8 dwelling units per acre.
• The success of any individual B-1 area will depend on the strength and quality of the
business mix, the specific location, and surrounding demographics.
• B-1 zoning can serve a variety of community and neighborhood needs besides daily shopping
and neighborhood dining. There is demand for small office and studio space, childcare facilities,
and health and wellness businesses. Having a diverse business mix within neighborhoods can
enhance quality of life. This flexibility of uses should be maintained in the B-1 areas.
B-2 Community Business Districts Analysis
B-2 Districts are intended to include a mix of larger community oriented retail/commercial space.
As a result, the estimated household spending capture rates of B-2 districts are higher than B-1
districts (25.9 percent in B-2 districts compared to 6.7 percent in B-1 districts). Traditionally,
community shopping centers are 100,000 to 150,000 square feet in size and are anchored by a
grocery store. New grocery stores begin at about 50,000 square feet, but have been growing to
60,000 to 70,000 square feet as they offer more prepared foods and general merchandise.
As shown, at least 6,500 households more are needed to support a grocery store (Table 17). At
the current rate of housing development, averaging 600 units per year over the past 10 years in
the city, and 800 to 1,000 per year in the Gallatin Valley, a new grocery store could be supported
in the market in about the next five years. The likely location would be on the west side of
Bozeman, the direction in which Bozeman is growing. A site here could also capture drive in
demand from Belgrade and the unincorporated areas just outside the city including Four Corners.
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Table 17 B-2 District Supportable Square Feet by Household Spending
% of Total Avg. Sales Spending
Store Type Spending Per Sq. Ft.Capt. Rate
Household Growth (Community-wide)500 1,500 2,500 3,500 4,500 5,500 6,500
Retail Spending
Supermarket 6.9%$450 75.0%3,750 10,500 18,000 25,500 32,250 39,750 46,500
Other Convenience Goods 4.7%$300 65.0%3,250 9,750 16,250 22,100 28,600 35,100 41,600
General Merchandise N/A N/A N/A 0 0 0 0 0 0 0
Other Shopper's Goods 6.9%$350 25.0%1,500 4,750 7,750 10,750 14,000 17,000 20,250
Eating and Drinking 6.1%$300 25.0%1,500 4,750 8,000 11,000 14,250 17,500 20,500
Building Material & Garden N/A N/A N/A 0 0 0 0 0 0 0
Total Retail Sq. Ft.24.7%$356 46.7%10,000 29,750 50,000 69,350 89,100 109,350 128,850
[1] 2010-2014 ACS Estimate
Source: 2012 Census of Retail Trade; Economic & Planning Systems
Supportable Square Feet
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B-2 Zoning Conclusions
• A 75-acre B-2 district can accommodate over 400,000 square feet of retail/ commercial
development. This was the size of the “power center” development format that emerged in
Bozeman in the early 2000s when retail was expanding rapidly. Given market conditions in
the national retail landscape, and the typical 100,000 to 150,000 square foot community
shopping center size, it is not realistic to expect that an entire B-2 will build out as retail.
• The B-2 areas do allow for numerous other commercial service and employment uses. This
flexibility should be maintained, as these areas can also support office development that is in
demand, as well as other services.
• Adding additional housing density near or even in B-2 zoning areas can benefit retail
development. Bozeman can also consider more flexibility for high density residential
development in B-2 zoning areas. Currently, it is only allowed as a conditional use if it is on
the ground floor. Some limitations on residential development could include the following:
— Limited to a percentage of land area; and/or
— May not front the arterial streets or hard corner (the best retail/commercial locations).
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Neighborhood Commercial Development Strategies
Many cities work to attract large anchor retailers and to keep their retail tenant inventory and
building stock up to date. These efforts address larger scale retail needs at the city and regional
level to reduce sales and sales tax leakage due to competition with surrounding communities.
Since there is no local (or state) sales tax in Montana, there is little fiscal motivation for these
types of retail recruitment and marketing programs.
The approaches to encouraging neighborhood retail or business growth are often linked to
broader economic development programs and are very different from national tenant recruitment
and incentive-based approaches. A key difference is that many of the programs for encouraging
neighborhood commercial development are used to revitalize or support existing commercial
districts, not newly developing areas. Neighborhood retail approaches tend to follow the
‘economic gardening’ model—growing local businesses and capacity—through low interest loans;
technical assistance; best practices tool kits; and main street, merchant, and district
associations. Two examples are provided below.
Portland, OR
Portland’s Neighborhood Economic Development Strategy is executed through a combination of
three programs: the Neighborhood Prosperity Initiative (NPI), Venture Portland, and the Portland
Main Street Program. The objectives of the Neighborhood Economic Development Strategy are to
build local capacity, drive neighborhood business growth, and align and coordinate resources to
support neighborhood economic development. Specific NPI objectives include increasing the
visibility of the business district, growing jobs, strengthening existing businesses, and filling
vacant spaces. Venture Portland supports local business districts through marketing, district
grants, and technical assistance. The Portland Main Street Program follows the National Main
Street Program and works to revitalize commercial districts and support small businesses,
following the National Trust for Historic Preservation’s Main Street Program structure of
activities: Organization, Promotion, Design, and Economic Restructuring. In addition to grants
and revolving loan funds, tax increment financing (TIF) is sometimes used to incentivize
neighborhood commercial revitalization.
Fort Collins, CO
Fort Collins shares many characteristics with Bozeman including a large student population,
growing technology and advanced manufacturing sectors, and a high quality of life. Like
Bozeman, Fort Collins has several neighborhood commercial areas in its land use plan and
zoning. Fort Collins has also struggled to attract commercial development to these areas. Staff
have observed that as it is difficult to create new un-anchored retail locations without significant
housing density. In Fort Collins, the major retailers look for locations on two key commercial
arterials, and smaller tenants follow the larger anchor businesses. So far, there has not been any
significant smaller scale retail/commercial development outside of the historic Downtown or the
major commercial corridors. The City’s incentive approaches are structured to address retail
leakage by returning a portion of ‘net new’ sales tax revenue to new retailers, and offering TIF
for major projects. Fort Collins has a similar entrepreneurial climate, and has a revolving loan
fund to support new business creation.
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6. OFFICE AND INDUSTRIAL MARKET
This chapter summarizes national and local trends in the office and industrial markets, followed
by a review of trends in office and industrial construction and market share within the Gallatin
Valley. Other market indicators such as rent levels, development and land costs, and qualitative
information gathered from interviews conducted by EPS is also included.
Office Market Trends
There are numerous trends, workforce, and demographic factors affecting the national office
market. This section discusses the four major trends with the most potential to influence the
local market in Bozeman.
Location Preferences
Nationally, there are trends in office development moving away from the suburban office park or
corporate campus to more mixed use, centrally located, and often transit-accessible locations (in
major urban areas). Much of this trend relates to the housing and neighborhood preferences of
Generation X and Millennial-aged workers who wish to have more access to amenities near work
such as shopping, services, and dining. This mix of land uses allows workers to combine errand
and work trips to save time. It also provides a more interesting and pleasant environment—
especially for people who wish to spend less time in their cars. Some firms also see value in
being close (walking, bicycling, or a short car or transit trip) to customers and other business
partners as it allows for convenient frequent contact as well as spontaneous interactions on the
street or in restaurants or coffee shops. There is evidence of these trends in interviews with
economic developers conducted by EPS in major western cities, economic development and real
estate literature, and data in the City’s Economic Development Strategy.
Figure 27 Location Preferences for Bozeman Businesses
In the Bozeman Economic
Development Strategy,
firms were surveyed on
their ideal location. Nearly
35 percent of all
businesses indicated a
desire to be Downtown
(Figure 27). Among
professional services
businesses, Downtown was
the most desired location
(approximately 20
percent) followed by the
MSU Tech Park (10
percent). All other
locations made up the
balance of preferences for
professional services.
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More Efficient Office Space
Businesses are leasing less office space per
person than in past years. Technology has
reduced the need for paper records storage
space, and new workplace designs are more
efficient. Open floor plans and shared spaces
are becoming more common. In these settings,
workers are freer to move around an office
with a laptop and mobile phone. The National
Association for Industrial and Office Parks
(NAIOP) reported in 2015 that the average
office lease size had dropped by approximately
10 percent from 2004 through 2014. Some of
the trend in efficiency (more workers per
square foot of building area) is driven by cost. Fast growing industries like technology are not
necessarily cutting space requirements as they desire spacious and luxurious offices to attract
the highest skilled talent. Slower growth industries such as law and accounting are reducing their
space requirements to cut costs.
Co-Working Space
Co-working space is a new type of office space in which tenants rent desk(s) space in a space
shared with other workers and firms. They are popular with small new firms, which can be in any
field including professional services, creative industries, and technology. Tenants have access to
conference rooms and shared office equipment (e.g. printers). The benefits of co-working space
are that they typically have lower tenant finish levels and lower cost than traditional office space
and are flexible in that they give a firm a low-cost way to grow from one to a few employees.
They also offer, and are marketed for, opportunities for collaboration and knowledge sharing with
likeminded people and potential business partners. Some also offer events including networking,
speakers, and skill development workshops.
Co-working space is popular with entrepreneurs and remote workers. It is becoming more common
in major and mid-sized cities but is still a small portion of the total office market. Co-working
spaces in Bozeman include Blue Ocean Innovation Center (19th and West Lincoln), CoWork
Bozeman (East Main between Black and Tracy), and Regus a worldwide leader in co-work space
that recently opened 15,000 square feet on the second floor of the 5 West building Downtown.
Innovation Districts
“Innovation districts” can be defined as economic development tools that utilize partnerships
with higher education institutions, businesses, and government to fuel job growth and
redevelopment in targeted locations. Innovation districts are based on the premise that
collaboration and productivity result from proximity; therefore, job creation and innovation can
be fostered through the intentional clustering of businesses, institutions, ideas, and people.
One model for innovation districts is to anchor the district at a major research institution. These
are typically in downtown or mid-town settings. Examples include the Kendall Square/MID cluster
in Cambridge; the University City/University of Pennsylvania cluster in Philadelphia; and the
Saint Louis/Washington University and Saint Louis University cluster in Saint Louis.
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The MSU Technology Park, which MSU is working to develop, is an example of an innovation
district. This planned project is located along the south frontage of West College just west of 23rd
Avenue. MSU is proposing approximately 263,000 square feet of R&D space on a 40-acre
campus just west of the Advanced Technology Park.
Gallatin Valley Office Market
The demand for office development and construction is driven by job growth in industries and
occupations that use office space. In the Gallatin Valley, those sectors are primarily professional
services and health care, and financial services (banking and insurance). The City of Bozeman
has been the location of most office development, with nearly 862,000 square feet constructed
over the last 16 years, capturing 80 percent of the regional office market (Table 18). Some of
the largest buildings constructed during this time period include:
• A 37,500-square foot office building for a construction company;
• An 18,000-square foot medical office building at the hospital;
• A 25,000-square foot office and retail building in the Gateway development (West College
and West Main);
• At Huffine and Cottonwood, an 18,000-square foot office building and 11,000 square foot
building for a sports medicine clinic;
• The 17,200-square foot Crowley Fleck law offices; and
• The Mountain View professional building on the north side of Main at Cypress.
There were also several other buildings in the 4,000 to 8,000 square foot range.
Table 18 Gallatin Valley Office Construction Trends
• Tenant Characteristics - Interviews conducted by EPS indicate that most office tenants
look for spaces in the 1,000 to 4,000 square foot range. The few larger buildings noted above
were medical-related and a law firm making a major expansion in Bozeman.
• Rents and Construction Costs – Office rents are approximately $18 to $20 per square foot
(plus operating expenses) and $25 for new construction (plus operating expenses). Rents are
reported to be expensive for small professional firms. Rents are a function of construction
costs, which are approximately $250 per square foot including land and $180 to $210
without land. These figures result in a 10 percent return on cost or less, which is a small
margin given the risks in real estate development and construction.
2000-2016
Area 2000-2006 2007-2011 2012-2016 Total Sq. Ft.Ann. Sq. Ft.Market Share
Belgrade Area 88,000 31,000 9,000 128,000 7,529 11.9%
Bozeman 404,000 101,000 357,000 862,000 50,706 80.1%
Four Corners Area 36,000 25,000 25,000 86,000 5,059 8.0%
Total 528,000 157,000 391,000 1,076,000 63,294 100.0%
Source: MT Dept. of Revenue GIS; Economic & Planning Systems' Analysis
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• Land Costs – Land costs are relatively high in Bozeman compared to the regional market.
Well located finished pad sites that are shovel ready sell for $65 to $75 per square foot of
land. Raw land that needs to be planned, developed, and taken through the City process
costs roughly $12 to $14 per square foot.
• Supply - There is very little available office space in Bozeman. It is challenging for
developers to expand the supply for several reasons. First, most tenants are looking for small
blocks of space meaning that a speculative building will need to find numerous tenants,
which may result in a long lease up period. Second, it is reported to be difficult to make
office development financially feasible with the rents the market can bear and the
construction and land costs.
The office market in other areas is comprised of local small businesses and professionals. There
is far less demand for office space outside of Bozeman currently. Bozeman has a larger labor
pool and the other services and amenities such as restaurants, shopping, and other services,
which make it more appealing as an office location. Developers also report that the Bozeman
identity is important to some businesses.
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Gallatin Valley Industrial Market
The trends in industrial construction are the inverse of the office market. Over past 16 years, the
Gallatin Valley market added 1.9 million square feet of industrial space. Over half of this was in
Belgrade and nearly 40 percent was in the Four Corners area. Bozeman captured only 10 percent
of the industrial market (Table 19). Not included in these figures is an 80,000-square foot
facility occupied by Vista (outdoor brand wholesaler) and Blackhawk manufacturing, which
makes injection molded firearm accessories. Simms Fishing Products built a 61,000-square
expansion in 2016 in Four Corners. In 2012, FedEx built a 35,000-square foot distribution
building at Jackrabbit and Baxter also in Four Corners. Smith Equipment, a manufacturer of high
capacity off road (mining) trailers, built a 30,000-square foot building in Belgrade in 2010. Frito
Lay also constructed a small 10,000 square foot warehouse in Belgrade in 2010.
Table 19 Gallatin Valley Industrial Construction Trends
• Tenant Characteristics - The buildings noted above were among the largest new facilities. Of
the approximately 100 buildings developed over this time period, approximately half were 6,000
to 7,000 square feet or smaller. These smaller buildings are used by maintenance and repair
businesses, some of which are automotive; construction and trades firms; small wholesalers/
distributors. Small manufacturing firms, which are an important component of Bozeman’s
economic development strategy, also occupy smaller industrial and flex-space buildings.
• Land Costs – Land costs are considerably lower outside Bozeman. In Four Corners, land
with highway frontage ranges from $8.00 to $10.00 per square foot. These sites are more
attractive to businesses that need showroom space and visibility. Interior sites are in the
$5.00 to $6.00 per square foot range.
• Construction Costs – Development fees in Belgrade are reported to be similar to Bozeman.
The design standards in Belgrade are less prescriptive which results in modest construction
cost savings. In Four Corners, which is in the unincorporated County, development fees are
substantially lower and there are minimal design standards. This has created for the time
being a cost advantage in Four Corners. Water supply constraints will eventually temper the
growth of Four Corners.
2000-2016
Area 2000-2006 2007-2011 2012-2016 Total Sq. Ft.Ann. Sq. Ft.Market Share
Belgrade Area 479,000 268,000 238,000 985,000 57,941 51.4%
Bozeman 128,000 34,000 28,000 190,000 11,176 9.9%
Four Corners Area 378,000 160,000 204,000 742,000 43,647 38.7%
Total 985,000 462,000 470,000 1,917,000 112,765 100.0%
Source: MT Dept. of Revenue GIS; Economic & Planning Systems' Analysis
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7. LAND DEMAND PROJECTIONS
This chapter provides estimates of land that will be needed to support the next approximately 25
years of growth in and around the City of Bozeman. The chapter begins with a population and
employment projection that forms the basis of the demand estimates by major land use type.
Next, these projections are converted to new housing and new commercial space (dwelling units
and square feet). The land requirements from the projected amount of growth are then
estimated and compared to the amount of land available in the City, estimated by major zoning
type. Summary tables and calculations are presented in this chapter, with more detailed
supporting data provided in the Appendix.
Forecasts and projections are by their nature estimates. They are to be used in the process of
thinking about the vision for the future of Bozeman and the Gallatin Valley and how it may
evolve and grow over the next 25 years. These projections are not a statement that certain lands
will be developed; they are estimates of the land needed to support continued growth based on
population and job growth trends over the past 15 years, and an expectation of continued
economic growth albeit at a more moderate pace. The Growth Policy Update process will gather
input from the public on how, where, and if the City should grow and the goals, objectives, and
policies that will govern and manage future growth.
Population and Employment Projection
The methodology used to estimate future land demand begins with an employment projection.
Future employment is converted to the estimated labor force and population needed to support
the growth of employment (Figure 28). EPS’ employment projection estimates 1.5 percent
annual job growth in Gallatin County over the next roughly 25 years (Table 20). EPS considered
historic employment data presented in Chapters 1 and 2 as well as forecasts commissioned by
the Montana Department of Commerce in developing this projection.
Job growth has been robust in Gallatin County since 2001 with 3.1 percent annual growth (1,920
jobs per year) and 3.7 percent annual growth since the recession (2010-2015; 2,600 jobs per
year). In contrast, the Montana Department of Commerce forecasts prepared by a private firm
(REMI Economic Models, Inc.) estimates a 0.9 percent annual growth rate for Gallatin County
and most other Counties in western Montana, well below the past 15 years of observed data.
REMI’s forecasts use a methodology that is more weighted to State level economic activity; local
variations are sometimes blended into broader statewide or regional averages.
EPS evaluated growth rates by industry and in total and arrived at an overall job growth rate of
1.5 percent from 2017 through 2045. A tapering growth rate is used to moderate the pace of
growth over this long of a planning period. On an annual basis, job growth is 1,500 jobs per year
over the roughly 25-year forecast period, tapering down from 1,700 jobs per year in the near
term to 1,300 per year in the last five years of the projection. This is equivalent to 1,500 jobs
per year countywide and a total increase of 42,000 jobs. For comparison, the past 15-year
average was an increase of 1,900 jobs per year.
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Table 20 Gallatin County Employment Projection
Figure 28 Employment to Labor Force Methodology
1. Gallatin County Labor Force
Total Wage & Salary Employment
Less: W&S Multiple Job Holders
Subtotal: W&S Employees in Gallatin County
Less: In-Commuters
Plus: Out-Commuters
Subtotal: W&S Labor Force
Plus: Unemployed
Plus: Proprietors (adjusted for BEA overcount)
Subtotal: Gallatin County Labor Force
Plus: Population not in the Labor Force
Total Population
2. Gallatin County Housing Units
Total Population
Less: Group Quarters
Total Population in Households
Plus: Vacant Housing
Total Housing Demand
Description 2017 2020 2030 2040 2045 Total Ann. #Ann. %
Forestry, fishing, and related activities 741 801 951 1,046 1,090 349 12 1.4%
Mining, quarrying, and oil and gas extraction 621 656 773 877 928 307 11 1.4%
Utilities 121 125 143 162 171 51 2 1.3%
Construction 7,650 8,178 10,216 12,210 13,154 5,504 197 2.0%
Manufacturing 3,842 4,198 5,166 5,864 6,201 2,360 84 1.7%
Wholesale trade 2,177 2,327 2,781 3,157 3,339 1,162 41 1.5%
Retail trade 9,772 10,332 11,902 13,018 13,513 3,741 134 1.2%
Transportation and warehousing 1,799 1,966 2,529 3,090 3,391 1,592 57 2.3%
Information 1,036 1,095 1,290 1,497 1,613 577 21 1.6%
Finance and insurance 2,678 2,862 3,421 3,883 4,107 1,429 51 1.5%
Real estate and rental and leasing 5,984 6,327 7,452 8,459 8,945 2,961 106 1.4%
Professional, scientific, and technical services 7,266 7,768 9,284 10,538 11,144 3,878 139 1.5%
Management of companies and enterprises 347 387 501 591 636 290 10 2.2%
Admin, Support, Waste Mgmt, and Remediation Srvcs 3,003 3,245 3,936 4,468 4,725 1,722 62 1.6%
Educational services 1,608 1,796 2,326 2,740 2,952 1,343 48 2.2%
Health care and social assistance 6,343 6,781 8,286 9,545 10,094 3,751 134 1.7%
Arts, entertainment, and recreation 3,064 3,276 3,915 4,444 4,700 1,636 58 1.5%
Accommodation and food services 8,287 9,055 11,393 13,419 14,456 6,169 220 2.0%
Other services (except public administration)3,863 4,084 4,705 5,146 5,342 1,479 53 1.2%
Government and government enterprises 10,220 10,336 10,973 11,692 12,025 1,805 64 0.6%
Unclassified 0 0 0 0 0 0 0 ---
Total 80,421 85,597 101,944 115,845 122,525 42,104 1,504 1.5%
Annual Increase 1,725 1,635 1,390 1,336
Annual Rate 2.1%1.8%1.3%1.1%
Source: BEA; Economic & Planning Systems
2017-2045
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Several steps are required to convert employment to labor force and population, illustrated
above in Figure 28. The summary of the population forecast is shown below in Table 21. To
support the projected job growth in all of Gallatin County, a population increase of nearly 55,000
is required or almost 2,000 people per year at an annual rate of 1.52 percent. From 2000
through 2016, Gallatin County added an average of 2,200 people each year.
Table 21 Gallatin County Population and Housing Projection
After accounting for the group quarters population (students in dorms, people in other group
housing) and an allowance for vacant housing units, the projected population growth equates to
demand for 25,470 new housing units. Over the 2017 through 2045 time period, this is
equivalent to 910 housing units per year, compared to actual construction trends of
approximately 1,100 per year countywide from 2005 through 2016. These figures represent
demand in all of Gallatin County. The next step is to estimate housing demand and construction
in Bozeman.
Description Factors 2017 2020 2030 2040 2045 Total Annual
Growth
Rate
Labor Force to Population
Total Employment 80,421 85,597 101,944 115,845 122,525 42,104 1,504 1.52%
Gallatin County Labor Force 97,424 103,693 123,497 140,337 148,429 51,005 1,822 1.52%
Plus: Population not in the Labor Force 7,561 8,047 9,584 10,891 11,519 3,958 141 1.52%
Population 104,984 111,741 133,081 151,228 159,948 54,964 1,963 1.52%
Population to Housing Units
Less: Group Quarters 4.04%4,242 4,514 5,377 6,110 6,462 2,221 79 1.52%
Household Population 100,743 107,226 127,704 145,118 153,486 52,743 1,884 1.52%
Households 2.38 42,329 45,053 53,657 60,974 64,490 22,161 791 1.52%
Plus: Vacant Housing 13.00%6,325 6,732 8,018 9,111 9,636 3,311 118 1.52%
Total Housing Units 48,654 51,785 61,675 70,085 74,126 25,472 910 1.52%
Gallatin County Housing Demand 2017-2020 2021-2030 2031-2040 2041-2045
New Units 3,130 9,890 8,410 4,040 25,470 910
Annual 1,043 989 841 808
Source: Economic & Planning Systems
Change 2017-2045
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Housing and Land Demand
Bozeman has consistently accounted for about half of the population and housing growth in
Gallatin County, and this projection assumes that this trend continues. Therefore, the projection
estimates demand for 12,700 new housing units in Bozeman over the 2017 through 2045 time
period (Table 22). On an annual basis, construction is projected at approximately 500 units per
year on average for the next 10 to 13 years, and slowing to 400 to 420 units per year after 2030.
The distribution of units is held constant from the last 10 years of building permit data from
the City:
• 35 percent single household detached
• 30 percent attached single household units (townhomes, duplexes, fourplexes)
• 35 percent multifamily housing (condominiums and apartments)
These percentages may shift over time, and shifts in the types of units being constructed will
have an impact on land consumption, but it is highly speculative to try to estimate these shifts at
the local level. In the next step, we estimate a range of housing densities (dwelling units per acre
and residential lot sizes) to evaluate how changes in the market and in development practices
(and City policies and regulations) will affect the land demand associated with these projections.
Table 22 Bozeman Housing Projection
Description Factors 2017-2020 2021-2030 2031-2040 2041-2045 Total Annual
Gallatin County Housing Demand 3,130 9,890 8,410 4,040 25,470 910
Bozeman Market Share 50.0%1,565 4,945 4,205 2,020 12,735 455
Bozeman Construction Projection
Single-Family (Detached)35.0%548 1,731 1,472 707 4,457 159
Townhomes (Attached)10.0%157 495 421 202 1,274 45
Duplex (2 units)10.0%157 495 421 202 1,274 45
Triplex/Fourplex 10.0%157 495 421 202 1,274 45
Multifamily 35.0%548 1,731 1,472 707 4,457 159
Total 100.0%1,565 4,945 4,205 2,020 12,735 455
Annual 522 495 421 404
[1] Mobile homes and other miscellaneous housing types are not included.
Source: Economic & Planning Systems
Change 2017-2045
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Two scenarios for residential land demand were prepared: a baseline scenario that continues the
approximate development densities from the last decade, and a more compact development
scenario. For example, in the baseline scenario, single household detached homes are modeled
at 3 units per acre gross density, which translates to a lot size of 7,100 square feet (4.3 units
per acre net density) as shown in Table 23. The compact development scenario increases gross
densities to 5 units per acre for single household detached homes which is an average lot size of
4,300 square feet (roughly 40 to 45 feet wide by 90 to 100 feet deep).
Multifamily densities are increased from 20 units per acre to 25 units per acre on average. These
could potentially be increased further (above 30 to 35 units per acre) if accompanied by a
reduction in parking requirements, and there is a trend in reducing parking in multifamily
development following a decrease in vehicle ownership per capita.
Table 23 Residential Density Factors
Unit Type
Gross
Density
Net to
Gross Factor
Net
Density
Typical
Lot Size
Units/Acre Units/Acre Sq. Ft.
Baseline Scenario
Single-Family (Detached)3.0 70%4.3 7,100
Townhomes/Triplex/Fourplex (Attached)6.0 70%8.6 3,600
Duplex (2 units)4.0 70%5.7 5,300
Multifamily 20.0 70%28.6 N/A
Compact Development Scenario
Single-Family (Detached)5.0 70%7.1 4,300
Townhomes/Triplex/Fourplex (Attached)10.0 70%14.3 2,100
Duplex (2 units)8.0 70%11.4 2,700
Multifamily 25.0 70%35.7 N/A
Source: Economic & Planning Systems
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At these densities, the baseline scenario requires 3,100 acres of residential land over the next 25
to 30 years (Table 24). The more compact scenario requires an estimated 1,800 acres of
residential land (40 percent less). Single household home lot sizes and densities have the largest
impact on land demand, comprising 70 percent of the residential acreage in each scenario.
Table 24 Bozeman Residential Land Demand Projection
Units per
Description Acre (Gross)2017-2020 2021-2030 2031-2040 2041-2045 Total Annual
Baseline Land Demand
Single-Family (Detached)3.0 183 577 491 236 1,486 53
Townhomes (Attached)6.0 26 82 70 34 212 8
Duplex (2 units)4.0 39 124 105 51 318 11
Multifamily 20.0 8 25 21 10 64 2
Total Acres 256 808 687 330 2,080 74
Higher Density Scenario
Single-Family (Detached)5.0 110 346 294 141 891 32
Townhomes (Attached)10.0 16 49 42 20 127 5
Duplex (2 units)8.0 20 62 53 25 159 6
Multifamily 25.0 6 20 17 8 51 2
Total Acres 151 477 406 195 1,229 44
[1] Mobile homes and other miscellaneous housing types are not included.
Source: Economic & Planning Systems
Land Demand (Acres)
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Commercial Land Demand
The demand for commercial construction and land is estimated from the same employment
projection presented above. The process for converting jobs to commercial space is illustrated
below in Figure 29. The process requires several informed estimates and assumptions documented
in the Appendix, highlighting the fact that these are projections for planning purposes not
precise estimates or statements about the amount of development that will occur in Bozeman.
Figure 29 Conversion of Jobs to Commercial Space and Acreage
The key factors used to convert jobs to commercial space (square feet of building) are
summarized in Table 25. The square feet of building area per employee ranges from 250 for
office to 750 square feet per employee for industrial/flex/R&D buildings and institutional
buildings. Floor area ratios (FAR) are the ratio of gross building area to site size. FARs are
estimated at 0.30 for office to 0.5 for accommodations and food services.
Table 25 Commercial Land Demand Assumptions
Land Use/Industry
Sq. Ft. per
Employee
Floor Area
Ratio
Bozeman
Market Share
Office 250 0.30 80%
Industrial/Flex Space 750 0.15 10%
Retail 350 0.25 70%
Accommodation and Food Services 300 0.50 75%
Institutional 750 0.30 75%
Source: Economic & Planning Systems
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Bozeman’s market share of Gallatin County commercial construction was estimated from past
employment trends by community and data on commercial construction presented in Chapters 2,
5, and 6. Using the factors above and in Appendix Tables 1 through 3, the projected employment
growth is converted to square feet of commercial buildings. From 2017 through 2045, the
projections imply demand for 12.4 million square feet of commercial construction in Gallatin
County and 6.3 million square feet in Bozeman. As shown, Bozeman is assumed to capture 80
percent of the office market, 70 percent of the retail market, 75 percent of the hospitality
market, and 75 percent of institutional demand (e.g. government, MSU, major hospitals).
Table 26
Commercial Construction Projection
These high projected market shares contrast with an estimated 10 percent of the industrial
distribution and flex space market. Flex space is industrial like space with showroom or office
space in the front of the building. In some markets, R&D and lab space is a component of the
industrial market, and Bozeman would be more competitive for this type of higher value space
with skilled labor occupying it.
By market segment or land use type, these figures equate to about 60,000 square feet of annual
construction in the office market, 17,000 square feet of industrial/warehouse construction,
51,000 square feet of retail per year, 40,000 square feet of restaurant and hotel space, and
56,000 square feet per year of institutional space.
Market
Land Use Share 2017-2020 2021-2030 2031-2040 2041-2045 Total Annual
Gallatin County
Office 246,000 815,000 712,000 337,000 2,110,000 75,000
Industrial/Flex Space 596,000 1,833,000 1,536,000 746,000 4,711,000 168,000
Retail 287,000 828,000 626,000 288,000 2,029,000 72,000
Accommodation and Food Services 184,000 561,000 486,000 249,000 1,480,000 53,000
Institutional 217,000 810,000 741,000 337,000 2,105,000 75,000
Total Sq. Ft.1,530,000 4,847,000 4,101,000 1,957,000 12,435,000 443,000
Bozeman
Office 80.0%197,000 652,000 570,000 270,000 1,689,000 60,000
Industrial/Flex Space 10.0%60,000 183,000 154,000 75,000 472,000 17,000
Retail 70.0%201,000 580,000 438,000 202,000 1,421,000 51,000
Accommodation and Food Services 75.0%138,000 421,000 365,000 187,000 1,111,000 40,000
Institutional 75.0%163,000 607,000 555,000 253,000 1,578,000 56,000
Total Sq. Ft.759,000 2,443,000 2,082,000 987,000 6,271,000 224,000
Source: Economic & Planning Systems
New Construction
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Building square footage is converted to gross land area by applying a floor area ratio (FAR)
factor. Over the projection period, non-residential land demand is estimated at approximately
500 acres, or 18 acres per year (Table 27). The last step is to make an upward adjustment for
planning flexibility and market competition, and to compare the resulting numbers to the supply
of undeveloped land in the City.
Table 27 Bozeman Commercial Land Demand Projection
In long range land use planning it is common practice to add an upward adjustment to land
demand estimates for two primary reasons. First, flexibility is needed to identify the area’s most
appropriate for the types of land uses that will be in demand. There will always be site
configuration, roadway access, topography, and drainage considerations that will affect what
areas are most suitable. Also, a range of site and area types are needed. In commercial
development there are usually prime sites with the highest visibility and best configurations, and
other sites where businesses may not need to pay the premium for the best site. Perhaps the
most important reason for the adjustment is to allow for competition in the market among
landowners. If a small area has most of the zoned land for a particular land use, those land
owners will have a monopoly on that type of land and be able to charge higher prices than if
there was more competition.
Land Use FAR 2017-2020 2021-2030 2031-2040 2041-2045 Total Annual
Bozeman
Office 0.30 15 50 45 20 130 4.6
Industrial/Flex Space 0.15 10 30 25 10 75 2.7
Retail 0.25 20 55 40 20 135 4.8
Accommodation and Food Services 0.50 5 20 15 10 50 1.8
Institutional 0.30 10 45 40 20 115 4.1
Total Acres 60 200 165 80 505 18.0
Source: Economic & Planning Systems
New Acreage
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After adjusting for planning flexibility and market competition, the baseline scenario totals to
3,900 acres of land and the higher density scenario totals to 2,600 acres (Table 28). In both
cases, residential land demand comprises 70 to 80 percent of the total land demand, highlighting
the importance of housing on the physical form of a community.
Table 28 Summary of Land Demand Projections
Very roughly, these acreages translate to about 4 to 6 sections of land area (4 to 6 square miles)
assuming that all development was on undeveloped land. There are however many opportunities
in Bozeman to fill in existing enclaves (land surrounded or nearly surrounded by incorporated
Bozeman that has not been annexed). Infill and redevelopment will reduce the amount of new
land that is consumed by growth. In particular, The Midtown (North 7th corridor) has several
large properties that can support a large amount of additional housing and employment. Infill
and redevelopment in that type of setting has the most potential to affect net land demand. In
other cases where, for example, one housing unit is replaced by only one or two units, there is
much less of an impact on net land consumption.
The amount of land available for infill development can be estimated, but it is uncertain as to
how much land will actually be redeveloped as it varies widely according to the economic
conditions (e.g. existing profitable businesses) of each individual property and the desires of
individual property owners.
Land Use Baseline Density
Higher
Density Density
Residential
Single-Family (Detached)1,486 3.0 units/ac.891 5.0 units/ac.
Townhomes (Attached)212 6.0 units/ac.127 10.0 units/ac.
Duplex (2 units)318 4.0 units/ac.159 8.0 units/ac.
Multifamily (Greater than 3 units)64 20.0 units/ac.51 25.0 units/ac.
Subtotal 2,080 1,229
Planning Adjustment (+50%)1,040 614
Total 3,120 1,843
Commercial
Office 130 0.30 FAR 130 0.30 FAR
Industrial/Flex Space 75 0.15 FAR 75 0.15 FAR
Retail 135 0.25 FAR 135 0.25 FAR
Accommodation and Food Services 50 0.50 FAR 50 0.50 FAR
Institutional 115 0.30 FAR 115 0.30 FAR
Subtotal 505 505
Planning Adjustment (+50%)253 253
Total 758 758
Total 3,878 2,601
Square Miles (640 ac. per section)6.1 4.1
Source: Economic & Planning Systems
2017-2045 Land Demand
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Land Supply
Each year the City prepares estimates of unbuilt land in each zoning district, with estimates of
land in two categories: land that has infrastructure (streets and major utilities) at its boundary or
within it, and land where extensive infrastructure extensions may be needed. The readiness of
land for development is highly site specific and there will always be some exceptions in each
general category, but the City’s inventory provides a useful gauge of the land supply.
EPS and Sanderson Stewart further categorized the land supply by status and tabulated acreage
by broad zoning category to compare to the land demand estimates above. Right of way and
public open space were removed from this land inventory. This comparison comes with a major
caveat: the City’s zoning code allows a lot of flexibility in the types of land uses that are allowed
in each zoning district, so a simple comparison along the lines of “all retail demand will be
allocated to the B2 and B1 districts” is not practical or possible. Instead, we have tabulated the
acreages in three very broad categories:
• Commercial: Includes all B zones and historic mixed use. These districts allow a wide range
of retail, office, and other employment and commercial uses.
• Industrial: Includes the M-1 and M-2 industrial zoning districts which also allow a range of
other commercial and office uses.
• Residential: Includes all primarily residential zones, residential mixed-use, and university
mixed use zones.
The City estimates that there are approximately 500 acres of undeveloped commercial land, 140
acres of industrial land, and 1,900 acres of residential land (Table 29 and Table 30). In the
residential zones, most of the remaining vacant land is not well served with infrastructure.
Residential land that has infrastructure is comprised of scattered unbuilt lots and remaining lots
in newer subdivisions and master planned developments. Scattered lots are not as efficiently
absorbed by the market as lots in larger subdivisions and master planned developments and
therefore take longer to meet housing demand.
Table 29 Comparison of Undeveloped Land and Demand by Major Land Use
Description
Commercial
and Mixed Use Industrial Residential Total
Total Undeveloped Land 505 141 1,890 2,537
Under Development -64 0 -131 -195
Subtotal 441 141 1,759 2,342
Constraint Adjustment 0 0 -461 -461
Estimated Vacant Land 441 141 1,298 1,881
2017-2040 Demand
Baseline 645 113 3,120 3,878
Higher Density 645 113 1,843 2,601
Source: City of Bozeman, Sanderson Stewart, Economic & Planning Systems
Major Zoning Type
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Table 30 Undeveloped Land by Zoning
Description B-1 B-2 B-2M B-3 BP HMU M-1 M-2 R-1 R-2 R-3 R-4 R-5 REMU R-MH R-O R-S UMU Total
Commercial Industrial Residential
Undeveloped Land
Little/No infrastructure 5 196 0 0 90 0 36 65 235 86 240 152 6 109 34 98 374 0 1,724
With Some Infrastructure 15 182 4 0 11 2 39 1 6 56 22 258 130 9 6 0 39 33 813
Total Undeveloped 20 378 4 0 101 2 75 66 241 142 262 410 136 117 40 98 413 33 2,537
Under Development 0 -64 0 0 0 0 0 0 -41 0 -50 -20 0 0 0 -20 0 0 -195
Subtotal 20 314 4 0 101 2 75 66 200 142 212 390 136 117 40 78 413 33 2,342
Constraint Adjustment 0%0%0%0%0%0%0%0%-15%-5%-75%-15%0%0%0%0%-50%0%
Estimated Vacant Land 20 314 4 0 101 2 75 66 170 135 53 332 136 117 40 78 207 33 1,881
Estimated
Under Review or Development 0 64 0 0 0 0 0 0 41 0 50 20 0 0 0 20 0 0 195
Source: City of Bozeman, Sanderson Stewart, Economic & Planning Systems
Zoning District
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Land Supply Conclusions
Residential Land
Much of the projected market demand will be in the residential market with an estimated 1,800
to 3,100 acres in demand over the 2017 through 2045 time period. The current supply is
approximately 1,300 acres or 40 to 70 percent of the projected demand. The Growth Policy
process will need to look in more detail at the remaining supply of residential land to determine
how much of the existing supply can realistically meet future demand.
Industrial Land
The North Park properties are an important opportunity for the City to expand the supply of
employment and industrial land. Roughly 150 acres in the North Park area are owned by the
State of Montana in the school land trust. The State has leased its holdings to a master developer
for eventual development, although there are transportation access and utility infrastructure
hurdles that need to be addressed. North Park is well-located for industrial development, but also
for other employment uses including R&D and office. North Park may be the City’s best current
opportunity for expanding employment lands within its current incorporated boundary.
Another large area of industrial land (at least 150 acres after deducting right-of-way) is the
Idaho Pole property between I-90 and the railroad, northeast of Downtown. There have been
concepts circulated in the community to redevelop the Idaho Pole property as housing and mixed
use. The Growth Policy process should consider if this area should remain industrial or transition
to housing and other types of employment. The Growth Policy process could consider adding to
the supply of industrial land, particularly if the Idaho Pole property is rezoned. Adding new
industrial land that does not involve redevelopment would be absorbed more easily by the
market than a site with redevelopment costs and potential environmental remediation costs.
Commercial Land
Chapter 5 contains an analysis of B-1 Neighborhood Business and B-2 Community Business zoning
districts. To recap, Chapter 5 suggests a reduction and or re-allocation of some of the B-1 and B-2
zoned land. Some B-2 areas on the edge of the developed areas are likely to create an oversupply
of commercial land. Some B-1 districts are too close together and may be too large as well.
It will be challenging to balance the supply of commercially zoned land in Bozeman. While there
is a fairly large supply of undeveloped land, many of the best located sites have been developed
leaving less desirable sites as remnants of larger developments and business parks. To support
economic development, we recommend that the Growth Policy update address these additional
issue areas:
• Employment Land – Bozeman will benefit from additional land for high quality office and
R&D development. These lands need to be well located and close to mixed use and lifestyle
amenities such as restaurants and limited retail and services, and be accessible by car,
bicycle, and by foot.
• Retail Land – While the retail market is in transition, a portion of the retail market will
continue to expand with the growing population. One approach would be to designate the
North 19th and Huffine corridors as the large scale regional retail locations, and to allow for
continued neighborhood and community retail areas in locations where housing development
is expected. Again, any new B-1 and B-2 areas may need to be scaled down in size from
previous land use and zoning designations.
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Appendix
Table A-1: Employment, Labor Force, Population, and Housing Forecast,
Gallatin County
Table A-2: Employment Forecast by Industry
Table A-3: Employment by NAICS to Land Use Conversion
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Table A-1 Employment, Labor Force, Population, and Housing Forecast, Gallatin County
2017-2045 Ann.Growth
Description Factor Description 2015 2016 2017 2020 2030 2040 2045 Change Change Rate
EMPLOYMENT FORECAST
Gallatin County Labor Force
Total Wage & Salary Employment 1.55%77,169 78,776 80,421 85,597 101,944 115,845 122,525 42,104 1,504 1.5%
Less: W&S Multiple Job Holders 7.80%Bureau of Econ. Analysis (BEA)-6,019 -6,145 -6,273 -6,677 -7,952 -9,036 -9,557
Subtotal: W&S Employees in Gallatin County 71,150 72,631 74,148 78,920 93,992 106,809 112,968
Less: In-Commuters 21.2%LEHD On the Map 2015 -15,084 -15,398 -15,719 -16,731 -19,926 -22,644 -23,949
Plus: Out-Commuters 16.2%LEHD On the Map 2015 13,785 14,072 14,366 15,290 18,211 20,694 21,887
Subtotal: W&S Labor Force 69,851 71,305 72,795 77,479 92,276 104,859 110,906
Plus: Unemployed 3.00%Bureau of Labor Statistics 2,096 2,139 2,184 2,324 2,768 3,146 3,327
Plus: Proprietors 28.51%BEA 30,768 31,409 32,065 34,128 40,646 46,188 48,852
Less: Proprietor Overcount Adjustment 30.00%BEA; Census Non-Proprietor Statistics -9,230 -9,423 -9,619 -10,238 -12,194 -13,857 -14,656
Subtotal: Gallatin County Labor Force 93,484 95,431 97,424 103,693 123,497 140,337 148,429
POPULATION FORECAST
Gallatin County Population
Gallatin County Labor Force 93,484 95,431 97,424 103,693 123,497 140,337 148,429 51,005 1,822 1.5%
Plus: Population not in the Labor Force 7.20%calculated: NEEDS TO BE OVER 30% 7,255 7,406 7,561 8,047 9,584 10,891 11,519
Total Population 100,739 102,837 104,984 111,741 133,081 151,228 159,948 54,964 1,963 1.5%
Ann. % Change 2.1%2%2.1%1.5%1.1%1.1%
Gallatin County Housing Units
Total Households 2.38 2015 1-Year ACS 40,617 41,463 42,329 45,053 53,657 60,974 64,490 22,161 791 1.5%
Plus: Vacant Housing 13.00%2015 1-Year ACS 6,069 6,196 6,325 6,732 8,018 9,111 9,636
Total Housing Units 46,686 47,659 48,654 51,785 61,675 70,085 74,126 25,472 910 1.5%
Source: Economic & Planning Systems
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Table A-2 Employment Forecast by Industry
Description 2017 2020 2030 2040 2045 Total Ann. #Ann. %
Forestry, fishing, and related activities 741 801 951 1,046 1,090 349 12 1.4%
Mining, quarrying, and oil and gas extraction 621 656 773 877 928 307 11 1.4%
Utilities 121 125 143 162 171 51 2 1.3%
Construction 7,650 8,178 10,216 12,210 13,154 5,504 197 2.0%
Manufacturing 3,842 4,198 5,166 5,864 6,201 2,360 84 1.7%
Wholesale trade 2,177 2,327 2,781 3,157 3,339 1,162 41 1.5%
Retail trade 9,772 10,332 11,902 13,018 13,513 3,741 134 1.2%
Transportation and warehousing 1,799 1,966 2,529 3,090 3,391 1,592 57 2.3%
Information 1,036 1,095 1,290 1,497 1,613 577 21 1.6%
Finance and insurance 2,678 2,862 3,421 3,883 4,107 1,429 51 1.5%
Real estate and rental and leasing 5,984 6,327 7,452 8,459 8,945 2,961 106 1.4%
Professional, scientific, and technical services 7,266 7,768 9,284 10,538 11,144 3,878 139 1.5%
Management of companies and enterprises 347 387 501 591 636 290 10 2.2%
Admin, Support, Waste Mgmt, and Remediation Srvcs 3,003 3,245 3,936 4,468 4,725 1,722 62 1.6%
Educational services 1,608 1,796 2,326 2,740 2,952 1,343 48 2.2%
Health care and social assistance 6,343 6,781 8,286 9,545 10,094 3,751 134 1.7%
Arts, entertainment, and recreation 3,064 3,276 3,915 4,444 4,700 1,636 58 1.5%
Accommodation and food services 8,287 9,055 11,393 13,419 14,456 6,169 220 2.0%
Other services (except public administration)3,863 4,084 4,705 5,146 5,342 1,479 53 1.2%
Government and government enterprises 10,220 10,336 10,973 11,692 12,025 1,805 64 0.6%
Unclassified 0 0 0 0 0 0 0 ---
Total 80,421 85,597 101,944 115,845 122,525 42,104 1,504 1.5%
Annual Increase 1,725 1,635 1,390 1,336
Annual Rate 2.1%1.8%1.3%1.1%
Source: BEA; Economic & Planning Systems
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2017-2045
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Table A-3 Employment by NAICS to Land Use Conversion
Description Office Industrial
Retail Trade /
Commercial
Accom. and
Food Services Institutional Total
Employees with
No Space Demand
Forestry, fishing, and related activities 0.0%25.0%0.0%0.0%0.0%25.0%75.0%
Mining, quarrying, and oil and gas extraction 0.0%25.0%0.0%0.0%0.0%25.0%75.0%
Utilities 10.0%50.0%0.0%0.0%0.0%60.0%40.0%
Construction 10.0%25.0%0.0%0.0%0.0%35.0%65.0%
Manufacturing 0.0%75.0%0.0%0.0%0.0%75.0%25.0%
Wholesale trade 0.0%75.0%0.0%0.0%0.0%75.0%25.0%
Retail trade 0.0%0.0%90.0%0.0%0.0%90.0%10.0%
Transportation and warehousing 0.0%50.0%0.0%0.0%0.0%50.0%50.0%
Information 60.0%0.0%0.0%0.0%0.0%60.0%40.0%
Finance and insurance 70.0%0.0%10.0%0.0%0.0%80.0%20.0%
Real estate and rental and leasing 25.0%0.0%25.0%0.0%0.0%50.0%50.0%
Professional, scientific, and technical services 50.0%15.0%15.0%0.0%0.0%80.0%20.0%
Management of companies and enterprises 50.0%0.0%0.0%0.0%0.0%50.0%50.0%
Admin, Support, Waste Mgmt, and Remediation Srvcs 50.0%20.0%10.0%0.0%0.0%80.0%20.0%
Educational services 30.0%0.0%20.0%0.0%30.0%80.0%20.0%
Health care and social assistance 50.0%0.0%0.0%0.0%40.0%90.0%10.0%
Arts, entertainment, and recreation 10.0%20.0%20.0%0.0%0.0%50.0%50.0%
Accommodation and food services 0.0%0.0%0.0%80.0%0.0%80.0%20.0%
Other services (except public administration)25.0%25.0%25.0%0.0%0.0%75.0%25.0%
Government and government enterprises 50.0%0.0%0.0%0.0%50.0%100.0%0.0%
Unclassified 0.0%0.0%0.0%0.0%0.0%0.0%100.0%
Weighted Average 25%14%17%8%10%74%
Source: Economic & Planning Systems
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