HomeMy WebLinkAbout05-04-22 EVB Agenda & Packet MaterialsA.Call to Order - 6:00 PM
Via Webex:
https://cityofbozeman.webex.com/cityofbozeman/onstage/g.php?
MTID=e7f4fa88d03b0853496dbd092ca70c37f
Click the Register link, enter the required information, and click submit.
Click Join Now to enter the meeting
Via Phone:
This is for listening only if you cannot watch the stream or channel 190
• Call-in toll number (US/Canada): 1-650-479-3208
• Access code: 2556 457 8615
Public Comment:
If you are interested in commenting in writing on items on the agenda, please send an email to
agenda@bozeman.net prior to 4:00pm on the Monday before the meeting. You may also
comment by visiting the City's public comment page.
You can also comment by joining the WebEx meeting. If you do join the WebEx meeting, we ask
you please be patient in helping us work through this online meeting. If you are not able to join
the Webex meeting and would like to provide oral comment you may send a request to
agenda@bozeman.net with your phone number, the item(s) you wish to comment on, and
someone will call you during the meeting to provide an opportunity to comment. You may also
send the above information via text to 406-224-3967.
As always, the meeting will be streamed through the City's video page (click the Streaming Live in
the drop down menu), and available in the City on cable channel 190.
B.Disclosures
C.Changes to the Agenda
D.Approval of Minutes
D.1 Approval of Minutes from April 6, 2022 (DiTommaso)
E.Public Comments
This is the time to comment on any matter falling within the scope of the Economic Vitality Board.
There will also be time in conjunction with each agenda item for public comment relating to that
item but you may only speak once. Please note, the Board cannot take action on any item which
THE ECONOMIC VITALITY BOARD OF BOZEMAN, MONTANA
EV AGENDA
Wednesday, May 4, 2022
1
does not appear on the agenda. All persons addressing the Board shall speak in a civil and
courteous manner and members of the audience shall be respectful of others. Please state your
name and place of residence in an audible tone of voice for the record and limit your comments to
three minutes.
General public comments to the Board can be found in their Laserfiche repository folder.
F.Special Presentations
F.1 Bozeman Economic & Market Update Presentation(Duffany )
F.2 Seat at the Table Presentation(Andreasen)
G.Action Items
G.1 Provide recommendation to the City Commission regarding Ordinance 2111, Administrative
Departures for Housing Creation and to Define Infill and Missing Middle Housing(Fine)
H.FYI/Discussion
I.Adjournment
J.For more information please contact Brit Fontenot, bfontenot@bozeman.net
General information about the Economic Vitality Board is available in our Laserfiche repository.
This board generally meets the first Wednesday of the month from 6:00 pm to 8:00 pm.
Citizen Advisory Board meetings are open to all members of the public. If you have a disability and
require assistance, please contact our ADA coordinator, Mike Gray at 406-582-3232 (TDD 406-
582-2301).
2
Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:Approval of Minutes from April 6, 2022
MEETING DATE:May 4, 2022
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Approve minutes from April 6, 2022
STRATEGIC PLAN:1.2 Community Engagement: Broaden and deepen engagement of the
community in city government, innovating methods for inviting input from
the community and stakeholders.
BACKGROUND:In accordance with Commission Resolution 5323 and the City of Bozeman's
Citizen Advisory Board Manual, all boards must have minutes taken and
approved. Prepared minutes will be provided for approval by the board at
the next regularly scheduled meeting. Staff will make any corrections
identified to the minutes before submitting to the City Clerk's Office.
UNRESOLVED ISSUES:None
ALTERNATIVES:As recommended by the Board.
FISCAL EFFECTS:None.
Attachments:
040622 Economic Vitality Board Meeting Minutes.pdf
Report compiled on: April 20, 2022
3
Bozeman Economic Vitality Board Meeting Minutes, April 6, 2022
Page 1 of 3
THE ECONOMIC VITALITY BOARD MEETING OF BOZEMAN, MONTANA
MINUTES
April 6, 2022
Present: Joseph Morrison, Sara Savage, Craig Ogilvie, Danielle Rogers, John Carey, Katharine
Osterloth, Christopher Coburn
Absent: None
A) 00:17:52 Call to Order - 6:00 PM
B) 00:19:40 Disclosures
• There were no disclosures.
C) 00:19:54 Changes to the Agenda
• There were no changes to the agenda.
D) 00:20:07 Approval of Minutes
D.1 00:20:21 Approval of Minutes February 2, 2022 and March 2, 2022
020222 Draft EV Board Minutes.pdf
030222 Draft Economic Vitaility Board Minutes.pdf
00:20:33 Motion Approve minutes as submitted.
Sara Savage: Motion
Craig Ogilvie: 2nd 00:21:04 Vote on the Motion to free form Approve minutes as submitted. The Motion carried 6 - 0
Approve:
Joseph Morrison
Sara Savage
Craig Ogilvie
Danielle Rogers
John Carey
Katharine Osterloth
4
Bozeman Economic Vitality Board Meeting Minutes, April 6, 2022
Page 2 of 3
Disapprove:
None
E) 00:22:28 Public Comments
• There were no public comments.
F) 00:23:07 Action Items
F.1 00:23:18 Bozeman Code Audit to Create and Preserve Housing
2022 Commission Memo for Work Session.pdf
2021 AHO Root Policy Memo.pdf
Bozeman UDC Affordable Housing Assessment.pdf
00:23:20 Staff Presentation
Economic Development Program Manager David Fine presented community housing unified
development code incentives for affordability. He asked for board feedback on how the City should offer
shallow density bonuses.
00:47:28 Questions of Staff
01:17:30 public comment
01:17:47 Mary Wictor, Public Comment
Mary Wictor commented on ADUs, R3 Apartment Buildings Limited zoning designation, and restricted
size lots.
01:21:27 Discussion
01:40:16 Motion Recommend shallow incentives into the base code without affordability
requirements to the City Commission.
Sara Savage: Motion
Craig Ogilvie: 2nd 01:41:06 Vote on the Motion to free form Recommend shallow incentives into the base code
without affordability requirements to the City Commission.The Motion carried 6 - 0
Approve:
Joseph Morrison
Sara Savage
Craig Ogilvie
Danielle Rogers
John Carey
Katharine Osterloth
Disapprove:
None
5
Bozeman Economic Vitality Board Meeting Minutes, April 6, 2022
Page 3 of 3
G) 01:41:57 FYI/Discussion
G.1 01:42:05 Progress Report on the Economic Development Strategy Update
EV Board EDSU Update 04-05-22.pdf
01:42:10 Economic Development Specialist Jesse DiTommaso provided an update on the
Economic Development Strategy.
02:09:18 Danielle Rogers provided an update on the adopted CEDAW Resolution.
H) 02:14:36 Adjournment
For more information please contact Brit Fontenot, bfontenot@bozeman.net
General information about the Economic Vitality Board is available in our Laserfiche repository.
6
Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:Bozeman Economic & Market Update Presentation
MEETING DATE:May 4, 2022
AGENDA ITEM TYPE:Plan/Report/Study
RECOMMENDATION:Listen & ask questions regarding the Bozeman Economic & Market Update
STRATEGIC PLAN:1.2 Community Engagement: Broaden and deepen engagement of the
community in city government, innovating methods for inviting input from
the community and stakeholders.
BACKGROUND:Economic and Planning Systems, Inc. (EPS) recently completed an Economic
and Market Update for the City of Bozeman. This report provides an
overview of the City of Bozeman and Gallatin County, Montana economy,
key growth trends, commercial real estate trends, and the housing market
and housing demand. Brian Duffany, a principle at EPS will provide an
overview of the report.
Attached is the draft economic and market report from EPS. The final
version will be provided to the board upon receipt.
UNRESOLVED ISSUES:None.
ALTERNATIVES:None.
FISCAL EFFECTS:None.
Attachments:
213051-Draft Report_12-14-21.pdf
Report compiled on: April 29, 2022
7
Draft Report
Bozeman Economic and Market
Update
Prepared for:
City of Bozeman, MT
Economic Development Department
Prepared by:
Economic & Planning Systems, Inc.
EPS #213051
December 14, 2021
8
Table of Contents
1. City Snapshot and Summary ................................................................................ 1
City Snapshot...................................................................................................... 1
2. Economy ........................................................................................................... 6
Economic Trends ................................................................................................. 6
Wages ............................................................................................................... 9
Economic Drivers ............................................................................................... 10
3. Commercial Real Estate ..................................................................................... 11
Office Market Trends .......................................................................................... 11
Industrial/Flex Market ......................................................................................... 13
Retail Market .................................................................................................... 15
4. Housing ........................................................................................................... 18
Construction ..................................................................................................... 18
Housing Prices ................................................................................................... 19
Apartment Market .............................................................................................. 20
Affordability ...................................................................................................... 22
Housing Demand ............................................................................................... 24
9
List of Tables
Table 1. Population and Housing Units, 2010-2020 ......................................................... 2
Table 2. MSU Enrollment, 2001-2020........................................................................... 3
Table 3. Peer City Summary....................................................................................... 5
Table 4. Job and Wage Growth, Top Sectors, Gallatin County ........................................... 9
Table 5. Educational Attainment, Bozeman, 2021 ......................................................... 10
Table 6. Office Summary ......................................................................................... 11
Table 7. Industrial Summary, Gallatin County, 2010-2021 ............................................. 13
Table 8. Retail Summary, Gallatin County, 2010-2021 .................................................. 15
Table 9. Bozeman Building Permit Unit Trends ............................................................. 18
Table 10. Home Price Trends, 2016-2021 ..................................................................... 19
Table 11. Multifamily Summary, Gallatin County ............................................................ 20
Table 12. Recent Multifamily Development Summary, Bozeman ....................................... 21
Table 13. Required Annual Income to Afford Median Home Price, 2016-2021 ...................... 22
Table 14. Bozeman Housing Demand Projection ............................................................ 24
Table 15. Bozeman Housing Demand Projection ............................................................ 25
10
List of Figures
Figure 1. Gallatin Valley Region ................................................................................... 2
Figure 2. Private Wage and Salary Employment, Bozeman and Gallatin County, 2020 ............ 6
Figure 3. Employment Growth, Bozeman and Gallatin County, 2015-2020 ........................... 7
Figure 4. Unemployment Rate, 2010-2021 YTD .............................................................. 7
Figure 5. Change in Employment by wage quartile, Gallatin County, 2015-2020 .................... 9
Figure 6. Income Gap to Afford Median Priced Home, Bozeman, 2016 ............................... 23
Figure 7. Income Gap to Afford Median Priced Home, Bozeman, 2021 ............................... 23
11
Economic & Planning Systems, Inc.
213051-Draft Report_12-14-21 1
1. City Snapshot and Summary
This report provides an overview of the City of Bozeman and Gallatin County,
Montana economy, key growth trends, commercial real estate trends, and the
housing market and housing demand. The intended audiences are economic
developers, real estate developers and investors, lenders, and policymakers. The
purpose is to provide useful information on growth trends by area, economic
growth by industry, wages, and housing demand and affordability to help the
community track trends, progress, and potential threats.
This report is a follow up to the Demographic and Real Estate Market Assessment
completed by EPS for the Growth Policy Update in 2018.
City Snapshot
Bozeman has a 2021 population of approximately 53,000 within Gallatin County
(pop. 118,960) with a diverse economy, an educated labor force, and high quality
of life not often found in this combination in small cities. Montana State University
(MSU) is an anchor in the community and a strong research institution with about
16,000 enrolled students and 4,200 faculty and staff. The area has excellent
access to year round outdoor recreation activities and uncrowded spaces. The
combination of these factors has supported strong job and wage growth and
demand for housing. One of the most pressing issues for the City and greater
Bozeman is increasing the housing supply as the average home price is now
$779,000 ($700,000 median).
Bozeman is one of the fastest growing cities in the U.S. Between 2010 and 2020,
the City added nearly 17,000 residents, which translates to a growth rate of
nearly 1,700 new residents per year or an annual growth rate of 3.9 percent
(Table 1). The City has also added about 700 housing units annually since 2010,
which is just under 60 percent of all housing development in Gallatin County.
Most of the County’s population is within the Gallatin Valley, which is the area
comprised of Manhattan, Belgrade, Bozeman (I-90 Corridor), and Four Corners
and Gallatin Gateway (both unincorporated). The most urbanized area of the
County is the “Triangle” area that includes Belgrade, Bozeman, and Four Corners
(Figure 1).
12
Bozeman Economic and Market Update
2
Table 1. Population and Housing Units, 2010-2020
Figure 1. Gallatin Valley Region
Description 2010 2015 2020 Total Ann. #Ann. %
Population
Bozeman 36,440 40,319 53,293 16,853 1,685 3.9%
Belgrade 7,281 7,738 10,460 3,179 318 3.7%
Manhattan 1,396 1,191 2,086 690 69 4.1%Other/Uninc.44,541 51,491 53,121 8,580 858 1.8%
Gallatin County 89,658 100,739 118,960 29,302 2,930 2.9%
Bozeman % of County Pop.41%40%45%58%
Housing Units
Bozeman 16,761 18,293 23,535 6,774 677 3.5%
Belgrade 3,154 3,308 4,339 1,185 119 3.2%
Manhattan 574 653 872 298 30 4.3%
Other/Uninc.20,841 23,715 24,089 3,248 325 1.5%
Gallatin County 41,330 45,969 52,835 11,505 1,151 2.5%
Bozeman % of County Units 41%40%45%59%
Source: US Census; ESRI; Economic & Planning Systems
2010-2020
13
Economic & Planning Systems, Inc.
3
The Bozeman economy has six key segments that distinguish it from other
midsized cities and recreation or resort oriented mountain communities.
• Higher Education – Montana State University (MSU) has approximately
16,000 students enrolled and 4,200 faculty and staff. MSU is one of 131 R1
research institutions with “very high research activity” within the Carnegie
Classification of Institutions of Higher Education (Indiana University).
Table 2. MSU Enrollment, 2001-2020
• Tourism and Recreation – Bozeman is a “gateway community” for world
class recreation including the Bridger Bowl and Big Sky ski areas, pristine rivers
and streams, and Yellowstone and Glacier National Parks. Thousands of visitors
pass through or stay over in Bozeman during their trips to these destinations
that draw international visitors. During the busy seasons, one can hear several
foreign languages spoken on the streets and in restaurants in Bozeman.
• Technology – 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. MSU has received numerous grants,
including a $20 million grant from the National Science Foundation to accelerate
the development of quantum materials and devices. Photonics and optical
technology are an important technological cluster, as are technology firms such
as Oracle, Workiva, Zoot Enterprises, and numerous startups.
• Manufacturing – There are numerous manufacturing firms in Greater Bozeman
ranging from outdoor companies (Simms Fishing, Mystery Ranch) to optical
technology, materials science, electronics, and aerospace, and even a Gibson
Guitar factory.
• Retail and Hospitality – Bozeman retailers serve at least a 50-mile radius
trade area, making it the premier retail, services, and health care hub in
Southwest Montana. Downtown Bozeman is a vibrant main street with
independent shops, restaurants, and breweries serving locals and visitors.
Enrollment Trends 2001 2010 2015 2020 Total Ann. %
Undergraduate 10,538 11,579 13,707 14,240 3,702 1.6%
Graduate 1,208 1,986 1,981 2,009 801 2.7%
Total 11,746 13,565 15,688 16,249 4,503 1.7%
Source: Montana State University; Economic & Planning Systems
2001-2020
14
Bozeman Economic and Market Update
4
BZN Airport
Bozeman Yellowstone International Airport (BZN) moves about 700,000
passengers per year through Greater Bozeman. the airport is critical to the
region’s economic development by making the city accessible to larger markets
and investor capital. BZN also supports the tourism and recreation economy of
the region, supporting numerous guide services and Big Sky and Bridger Bowl ski
areas. BZN has direct flights to numerous metropolitan areas.
Comparison Cities
Table 3). Bozeman is a young city
with a median age of 27.8. Like Boulder and Fort Collins, Colorado the age is
influenced by the presence of a large university. Bozeman is one of the highest
income cities in Montana, with an average household income among homeowners
of just under $89,000 compared to $73,100 in Billings and $73,400 in Missoula
(host of University of Montana). The average household income in communities
with a large college or university is often skewed lower by the large student
population (often renters).
The mix of jobs in each community is similar with retail trade and health care
being among the largest sectors in each community. In addition, sectors that
experienced the largest growth since 2015 among the peer communities included
health care, professional and technical services, and construction.
15
Economic & Planning Systems, Inc.
5
In each community, the number of students as a percentage of population is
significant. In Bozeman, students equate to almost 35 percent of the population
similar to Boulder and Bend. In Fort Collins, the largest of the comparison cities,
the student population equates to about 20 percent of the population. The large
student population has an impact on the rental housing supply and the City is
interested in additional multifamily and student housing.
Table 3. Peer City Summary
Description Bozeman, MT Billings, MT Missoula, MT Fort Collins, CO Boulder, CO Bend, OR
Demographics
Population (2020)53,293 117,116 73,489 169,810 108,250 99,178
Median Age (2019)27.8 37.6 34.6 30.6 28.9 39.8
% Renters (2019)57%37%53%47%52%40%
Household Income
Owner $88,983 $73,100 $73,396 $95,423 $117,808 $80,785
Renter $39,516 $37,956 $32,640 $41,632 $41,876 $47,962
All Households $55,569 $59,656 $47,426 $65,866 $69,520 $65,662
Employment
# of Jobs (2020)29,035 53,519 38,938 94,563 59,744 50,225
Top 3 Sectors
#1 Retail Health Care Health Care Health Care Prof. & Tech Svcs.Health Care
#2 Health Care Retail Trade Retail Trade Education Education Retail Trade
#3 Hotel/Restaurant Accom. & Food Svcs.Accom. & Food Svcs.Accom. & Food Svcs.Manufacturing Accom. & Food Svcs.
Top 3 Growth Sectors ('15-'20)
#1 Health Care Health Care Construction Health Care Prof. & Tech Svcs.Health Care
#2 Prof. & Tech Svcs.Finance & Insurance Prof. & Tech Svcs.Information Manufacturing Construction
#3 Construction Transp. & Ware.Health Care Construction Health Care Accom. & Food Svcs.
Higher Education
Major Colleges/Universities Montana State
University
Montana State
University
University of
Montana
Colorado State
University
University of
Colorado
Oregon State
University
Enrollment (Fall 2020)16,249 4,000 10,015 32,646 34,975 33,359
% of Total Population 30.5%3.4%13.6%19.2%32.3%33.6%
Source: U.S. Census; BLS; ESRI; LEHD; Economic & Planning Systems
16
Economic & Planning Systems, Inc.
213051-Draft Report_12-14-21 6
2. Economy
Economic Trends
The City of Bozeman has a diverse economy driven by key segments that
distinguish it from other midsize cities. While retail trade and hotels and
restaurant are large sectors, Bozeman and Gallatin County also have significant
numbers of jobs in health care, manufacturing, professional and technical
services, finance and insurance, and business services (admin./waste mgt.
services) (Figure 2). The largest employers in the City, each with over 1,000
employees, include Montana State University and Deaconess Hospital. As of 2020,
there were approximately 59,071 private wage and salary jobs in the County and
at least 90,000 total jobs including proprietors and government (including MSU).
About half of the jobs in the County are within the City of Bozeman.
Figure 2. Private Wage and Salary Employment, Bozeman and Gallatin County, 2020
Between 2015 and 2020, Gallatin County added 7,012 private wage and salary
jobs (2.8 percent per year), with Bozeman capturing approximately 40 percent of
the growth. Employment growth was driven by Construction, Professional and
Technical Services, and Health Care (Figure 3). Construction jobs, which are
largely cyclical, experienced the third-highest amount of job growth in the
County, and were driven by large-scale projects in Big Sky.
5,592
4,220
1,983
5,061
2,772
1,570
1,449
887
754
1,139
511
520
508
514
62
461
8,197
6,920
6,413
5,994
4,829
3,599
2,323
2,260
1,819
1,619
1,463
1,302
1,197
834
701
698
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Retail Trade
Hotel/Restaurant
Construction
Health Care
Prof. & Tech Services
Manufacturing
Other
Admin/Waste Mgmt
Wholesale Trade
Finance/Insurance
Arts/Rec
Transport./Warehousing
Real Estate
Education
Ag./Forest/Hunting
Information
Total Jobs
Bozeman Gallatin
Source: Bureau of Labor Statistics; Economic& Planning Systems
17
Economic & Planning Systems, Inc.
7
Figure 3. Employment Growth, Bozeman and Gallatin County, 2015-2020
Apart from the spike in unemployment due to COVID-19, Bozeman and Gallatin
County have seen a steady decline in the unemployment rate mirroring trends
seen across Montana (Figure 4). In September 2021, Bozeman and Gallatin
County both had unemployment rates of 1.3 to 1.9 percent, historic lows.
Figure 4. Unemployment Rate, 2010-2021 YTD
539
671
715
168
364
112
251
87
35
151
88
-44
92
1,659
934
881
613
562
530
329
317
237
177
172
147
120
-200 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
Construction
Prof. & Tech Services
Health Care
Retail Trade
Manufacturing
Admin/Waste Mgmt
Other
Real Estate
Wholesale Trade
Education
Finance/Insurance
Ag./Forest/Hunting
Information
Job Growth
Bozeman Gallatin
Source: Bureau of Labor Statistics; Economic& Planning Systems
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Unemployment Rate
Bozeman Gallatin County Montana
Source: BLSLAUS; Economic& Planning Systems
18
Bozeman Economic and Market Update
8
MAJOR EMPLOYERS
EMPLOYER NAME
INDUSTRY/
EMPLOYMENT
TYPE
NUMBER OF
EMPLOYEES
Bozeman Deaconess Hospital Health Care 1,000+
Montana State University Education 1,000+
Belgrade School District Education 500-999
Bozeman School District Education 500-999
Gallatin County Government 500-999
Oracle Prof. and Tech Svcs. 500-999
City Of Bozeman Government 250-499
Kenyon Noble Lumber & Hardware Retail Trade 250-499
Town Pump Convenience Stores Retail Trade 250-499
Wal Mart Retail Trade 250-499
Zoot Enterprises Prof. and Tech Svcs. 250-499
Albertson's Retail Trade 100-249
Target Retail Trade 100-249
Bridger Bowl Ski Resort 100-249
Community Food Co-Op Retail Trade 100-249
Costco Retail Trade 100-249
First Security Bank Finance/Insurance 100-249
First Student Education 100-249
Reach Inc. Health Care 100-249
McDonald’s Acc. and Food Svcs. 100-249
Murdoch's Ranch & Home Supply Retail Trade 100-249
Ressler Motor Retail Trade 100-249
Simms Fishing Products Retail Trade 100-249
Town & Country Foods Retail Trade 100-249
Williams Plumbing & Heating Construction 100-249
19
Economic & Planning Systems, Inc.
9
Wages
Between 2015 and 2020 Gallatin County had robust wage growth averaging 5.4
percent per year (Table 4). Average wages in professional and technical service
jobs grew at 5.6 percent per year, increasing from $67,000 to $87,000 per year.
Growth in technology and professional jobs has been a major factor in the
evolution of Bozeman and the surrounding area.
Table 4. Job and Wage Growth, Top Sectors, Gallatin County
An analysis of job growth by wage quartile from 2015 through 2020 shows that
47 percent of new jobs in Gallatin County were in the 50 to 75th percentile of
wages, at $52,208 to $66,066 per year (Figure 5). These are good paying jobs at
hourly rates of $25 to $32 per hour. In addition, 22 percent of jobs added
between 2015 and 2020 were between the 75 and 100th percentile of wages, at
$66,066 to $89,804 per year. Large wage drivers include jobs in construction,
health care, and professional/technical services.
Figure 5. Change in Employment by wage quartile, Gallatin County, 2015-2020
`
Description
All Jobs/Sectors 6,568 $38,748 $50,313 5.4%
Construction 1,659 $46,904 $59,904 5.0%
Prof. & Tech Services 934 $66,664 $87,464 5.6%
Health Care 881 $44,876 $56,056 4.5%
Retail 613 $29,328 $37,960 5.3%
Manufacturing 562 $41,496 $53,508 5.2%
Admin/Waste Mgmt.530 $32,396 $39,000 3.8%
Source: Bureau of Labor Statistics QCEW; Economic & Planning Systems
2015-2020
Job Growth
2015 Avg.
Wage
Annual Wage
Growth 2020 Avg.
Wage
689, 10%
1,024, 16%
3,656, 56%
1,199, 18%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0-25% ($0-$39,104)25-50% ($39,104-$52,208)50-75% ($52,208-$66,066)75-100% ($66,066-$89,804)
Source: Economic& Planning Systems
20
Bozeman Economic and Market Update
10
Economic Drivers
The regional workforce is highly skilled and well educated. Approximately 59.8
percent of Bozeman’s workforce has a bachelor’s degree or higher (Table 5). The
presence of MSU 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.
Table 5. Educational Attainment, Bozeman, 2021
When compared to select peer cities, Bozeman has the highest percentage of its
population that has a bachelor’s degree, and the second highest percentage of its
population that has a bachelor’s degree or higher, second only Boulder, Colorado.
Description Bozeman Billings Missoula Fort Collins Boulder Bend
High School or Less, No Diploma 1.9%4.7%3.2%3.2%2.6%4.0%
High School Grad or Equivalent 12.4%28.3%17.9%15.0%5.9%17.0%
Some College, No Degree 19.9%21.6%20.1%16.6%10.0%22.9%
Associate's Degree 6.0%8.4%8.4%8.2%3.7%10.2%
Bachelor's Degree 38.8%26.2%32.0%32.8%36.9%28.0%
Grad/Prof. Degree 21.0%10.7%18.4%24.1%40.9%17.8%
Total 100.0%100.0%100.0%100.0%100.0%100.0%
Bachelor's Degree or Higher 59.8%36.9%50.4%57.0%77.8%45.8%
Source: U.S. Census; ESRI Business Analyst; Economic & Planning Systems
Percent of Total Population
21
Economic & Planning Systems, Inc.
11
3. Commercial Real Estate
This chapter provides an overview of the commercial real estate trends and
conditions in Bozeman and Gallatin County. This analysis includes a summary of
the total inventory, rental rates, and vacancy rates. Commercial real estate data
comes from CoStar which, in Bozeman, does not include a complete inventory but
is useful for general trends and information on market conditions.
Office Market Trends
From 2010 to the fourth quarter of 2021, total office space in Gallatin County grew
by 657,484 square feet, or an annual average of 59,771 square feet (Table 6).
The City of Bozeman is the office space center in the County, with over 90 percent
of office inventory in 2021. In addition, Bozeman captured nearly 88 percent of
new office development since 2010.
Rental rates in Bozeman increased steadily over the past decade by a total of
$9.59 per square foot, and as of the fourth quarter of 2021, reached an average
of $20.94 per square foot. Average vacancy rates for office space in Gallatin
County and Bozeman have remained under 4.2 percent over the past decade, as
a majority of properties in Bozeman have reached stabilization. As of the fourth
quarter of 2021, average vacancy in the County averaged 3.8 percent, while
vacancy in the City was slightly higher, at 4.2 percent.
Table 6. Office Summary
Description 2010 2015 2020 2021 Total Ann. #Ann. %
Inventory
Bozeman 2,490,762 2,561,763 3,046,337 3,067,513 576,751 52,432 1.9%
Gallatin County 2,720,990 2,871,924 3,357,298 3,378,474 657,484 59,771 2.0%
Pct. Of County 91.5%89.2%90.7%90.8%87.7%
Avg. Rent
Bozeman $11.35 $15.29 $21.09 $20.94 $9.59 $0.87 5.7%
Gallatin County $11.39 $15.00 $21.06 $20.90 $9.51 $0.86 5.7%
Avg. Vacancy
Bozeman 3.0%3.7%3.6%4.2%1.2%0.1%3.1%
Gallatin County 3.0%3.3%3.4%3.8%0.8%0.1%2.2%
Source: CoStar; Economic & Planning Systems
2010-2021
22
Bozeman Economic and Market Update
12
Recent office construction in Bozeman has generally been concentrated to the west of the
city along Hwy. 191, and to the northeast, along I-90. Notable deliveries since 2018
include the 26,300 square foot AED building (software development) that came online in
early 2020 along Hwy. 191. In addition, a 17,305 square foot office building in northeast
Bozeman delivered along Hwy. 191 in 2019. The building has strong access to I-90 and is
occupied by Payne West Insurance. Other notable projects are detailed below.
Industry – Industry is an 87,000
square foot collaborative workspace
and incubator building proposed by
the developer of Industry in the
River North neighborhood in
Denver, CO. This is one of the
largest proposed office buildings in
Bozeman. The project will bolster
MSU’s 42-acre Innovation Campus,
with goals of providing workplace
innovation and creating open
collaboration between local and
national enterprise in conjunction
with MSU.
Cannery District – In addition, the
Cannery District project is
underway with approximately
111,000 square feet of office and
retail space available to rent along
Oak and Rouse Avenue. The project
includes the 52-unit Cannery Flats
multifamily project, which delivered
in 2020.
23
Economic & Planning Systems, Inc.
13
Industrial/Flex Market
From 2010 to the fourth quarter of 2021, industrial space in Gallatin County grew
by 437,046 square feet, or an average of 39,731 square feet (Table 7). Over the
past decade, Bozeman captured just 37.2 percent of industrial growth in the
county, as lower land costs outside the city are attractive to some types of
heavier industrial uses. There is still a market in Bozeman however for higher
value industrial uses and flex/R&D space, especially for companies that want the
Bozeman location and City’s robust municipal infrastructure and amenities.
Table 7. Industrial Summary, Gallatin County, 2010-2021
Over the past decade, rents grew by 4.5 percent annually in Gallatin County,
while Bozeman experienced modest rental growth of 1.0 percent. As of the fourth
quarter of 2021, industrial rents in Bozeman averaged $10.43 per square foot and
$11.29 in Gallatin County. Vacancy for both the City and County has generally
decreased since 2012 and remained under 4.0 percent since 2015.
Description 2010 2015 2020 2021 Total Ann. #Ann. %
Inventory
Bozeman 1,509,654 1,521,993 1,672,228 1,672,228 162,574 14,779 0.9%
Gallatin County 2,589,125 2,603,264 2,975,171 3,026,171 437,046 39,731 1.4%
Pct. Of County 58.3%58.5%56.2%55.3%37.2%
Avg. Rent
Bozeman $9.35 $6.12 $10.64 $10.43 $1.08 $0.10 1.0%
Gallatin County $6.96 $5.70 $10.98 $11.29 $4.33 $0.39 4.5%
Avg. Vacancy
Bozeman 3.6%2.5%0.8%0.6%-3.0%-0.3%-15.0%
Gallatin County 3.6%3.7%0.5%1.7%-1.9%-0.2%-6.6%
Source: CoStar; Economic & Planning Systems
2010-2021
24
Bozeman Economic and Market Update
14
Notable sites that could drive industrial development include Pole Yard, North
Park, and Nelson Meadows, as detailed below:
Pole Yard Urban Renewal District – An 87-acre
site located between Interstate 90 corridor and
Montana Rail Link right-of-way. Portions of the site
include a partially delisted Superfund site owned
by the Idaho Pole Company. There are
environmental restrictions that limit residential
development at the property, and any restrictions
must be approved by the EPA and Montana
Department of Environmental Quality (DEQ).
Nevertheless, the site could still foster commercial
development activity in the future.
North Park Urban Renewal District – A 275-
acre area in north Bozeman east of I-90 and west
of Frontage Road. The site is currently vacant, but
previous plans at the site have included 790,000
square feet of light industrial space and nearly
500,000 square feet of flex space.
Nelson Meadows Business Park – A master
planned commercial subdivision located in
northwest Bozeman at the corner of Nelson Road
and Frontage Road. The site is comprised of 27
building lots that vary in size from 0.7 acres to
5.27 acres. The site has direct access to I-90 and
is zoned M-1 for Light Manufacturing. As of
December 2021, 23 of the 27 lots were under
contract or sold.
25
Economic & Planning Systems, Inc.
15
Retail Market
The City of Bozeman is the regional trade hub for Gallatin County and a roughly
50 mile radius. The City has over 85 percent of the County’s retail inventory as of
the fourth quarter of 2021 (Table 8). In addition, nearly 93 percent of retail
space that delivered in Gallatin County since 2010 was in Bozeman.
Table 8. Retail Summary, Gallatin County, 2010-2021
Average rents for retail space in the City currently average $22.31 per square
foot, slightly higher than rents witnessed in the broader County, which recorded
at $22.06 per square foot. Rents in the City and County have both grown steadily
since 2010, growing by 3.1 percent and 3.0 percent respectively. Average
vacancy for retail space in Bozeman has been notably low since 2010, and
averages 2.2 percent as of the fourth quarter of 2021.
There are a wide variety of national grocery chains, big box retailers, and smaller
local stores. There are eight full service supermarkets (including the Walmart
Supercenter, and a Whole Foods currently under construction) in Bozeman plus
several smaller specialty food stores and independent grocers such as the
Community Food Co-op. Recent deliveries include the 75,000 square foot Winco
that delivered in early 2021, and a 50,000 square foot Costco expansion.
Bozeman also has several national general merchandise and home improvement
anchor retailers including Costco, Target, Home Depot, Lowes, Kohls, and Macy’s.
Description 2010 2015 2020 2021 Total Ann. #Ann. %
Inventory
Bozeman 4,501,345 4,835,713 5,032,178 5,032,178 530,833 48,258 1.0%
Gallatin County 5,337,650 5,706,258 5,909,458 5,909,458 571,808 51,983 0.9%
Pct. Of County 84.3%84.7%85.2%85.2%92.8%
Avg. Rent
Bozeman $15.97 $13.65 $21.23 $22.31 $6.34 $0.58 3.1%
Gallatin County $15.99 $13.58 $21.00 $22.06 $6.07 $0.55 3.0%
Avg. Vacancy
Bozeman 1.8%3.3%1.6%2.2%0.4%0.0%1.8%
Gallatin County 1.9%2.9%1.5%1.9%0.0%0.0%0.0%
Source: CoStar; Economic & Planning Systems
2010-2021
26
Bozeman Economic and Market Update
16
A major retail repositioning project underway is the redevelopment of the Gallatin
Valley Mall. Whole Foods will be a new anchor for the redevelopment, plus the
existing Macy’s, Barnes & Noble, Regal Cinemas, and JoAnn Fabrics. The
redevelopment strategy includes an additional 15,000 square feet of retail space,
with a general concept of creating public gathering space, a main street feel, and
a broad mix of tenants and entertainment.
27
Economic & Planning Systems, Inc.
17
BOZEMAN RETAIL INVENTORY
DESCRIPTION
STORE
TYPE AVG.
SQ.FT. DESCRIPTION
STORE
TYPE AVG.
SQ.FT.
Supermarkets and Grocery Stores Shoppers’ Goods
Walmart Supercenter 220,000 Costco Wholesale 150,000
WinCo 85,000 Target 120,000
Town & Country Foods (2 stores) 70,000 Kohls 60,000
Safeway 65,000 Macy's 50,000
Albertsons 65,000 Sportsman's Warehouse 50,000
Smith's 50,000 Wholesale Sports 50,000
Rosauers 50,000 Dollar Spree 50,000
Whole Foods (Under Construction) 30,000 Dollar Tree 50,000
Huckleberry's Natural Market 20,000 REI 25,000
Heebs East Main Grocery 10,000 T.J. Maxx 20,000
Community Food Co-op 10,000 Ross 20,000
Other Shopper's Goods Sears
Gallatin Valley Furniture 35,000 JCPenney 20,000
Barnes and Noble 20,000 Play it Again Sports 20,000
Office Depot 20,000 Gap Outlet 10,000
Staples 20,000 Joann 10,000
Petco Animal Supplies 20,000 White House Black Market 10,000
PetSmart 20,000 Building Material and Garden
Mattress King 10,000 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
28
Economic & Planning Systems, Inc.
213051-Draft Report_12-14-21 18
4. Housing
This chapter provides an overview of the housing market in Bozeman. It
summarizes building permit trends, home prices, the rental market, and key
affordability indictors.
Construction
Between 2014 and 2020, the City of Bozeman issued approximately 5,600
residential building permit units (Table 9) which is an average of 800 per year
since 2014. 2020 was the highest year with 945 new construction permits issued.
Bozeman has a high percentage of multifamily and condominium construction at 62
percent over this time period. This trend is driven by student demand, young
workforce demand, and investor and second homeowner demand. Bozeman is
popular among affluent people who visit Big Sky frequently or own a home there
and wish to have a jumping off point close to the airport and to experience
Bozeman city life.
Table 9. Bozeman Building Permit Unit Trends
Description 2014 2015 2016 2017 2018 2019 2020 Total Avg.%
Single Family 252 263 300 350 229 167 150 1,711 244 30.5%
Multifamily /Condo 350 497 356 420 593 546 734 3,496 499 62.4%
Townhome 73 22 73 53 37 78 61 397 57 7.1%
Total 675 782 729 823 859 791 945 5,604 801 100.0%
Source: Economic & Planning Systems
2014-2020
29
Economic & Planning Systems, Inc.
19
Housing Prices
Greater Bozeman has seen unprecedented appreciation in home prices. The
largest increases occurred between 2020 and 2021 (YTD) with an almost 30
percent increase (Table 10). The median home price in the city is now about
$700,000 compared to $359,500 in 2016. This rapid increase is likely not
sustainable as it is related to amenity migration away from large metro areas
during the COVID-19 pandemic. However, Bozeman has seen steady and rapid
appreciation over the past six years averaging 14.4 percent per year on the
average sale price. The surrounding communities and entire county have also
experienced similar trends with prices essentially doubling over the past six years.
The increase in prices has serious implications for affordability and workforce
attraction and retention and quality of life. From an investor standpoint it
indicates robust demand, tight supply, and opportunities to develop in a strong
market. The City is interested in ways to increase the housing supply responsibly
in a way that maintains community character.
Table 10. Home Price Trends, 2016-2021
Description 2016 2017 2018 2019 2020 2021 Total Ann. %YTD Oct.
Median Sales Price
Bozeman $359,500 $381,500 $427,500 $460,000 $540,000 $700,000 $340,500 14.3%
Belgrade $255,000 $287,250 $320,000 $340,950 $375,000 $520,000 $265,000 15.3%
Greater Manhattan $280,000 $307,000 $389,000 $416,000 $564,750 $620,000 $340,000 17.2%
Gallatin County $310,000 $331,150 $374,660 $397,500 $439,900 $675,000 $365,000 16.8%
Average Sales Price
Bozeman $399,912 $425,992 $478,343 $513,704 $590,742 $784,355 $384,443 14.4%
Belgrade $283,624 $322,039 $361,505 $390,600 $423,023 $629,816 $346,192 17.3%
Greater Manhattan $338,831 $373,322 $426,166 $463,858 $667,156 $777,303 $438,472 18.1%
Gallatin County $391,363 $435,596 $493,734 $536,359 $672,724 $972,050 $580,687 20.0%
Source: Gallatin Association of Realtors; Economic & Planning Systems
2016-2021
30
Bozeman Economic and Market Update
20
Apartment Market
Apartment and other commercial real estate market information comes from the
CoStar database, a national real estate data subscription service. CoStar became
more active in the Bozeman market about five years ago and has basic market
information but may not capture the full inventory. In addition, CoStar focuses on
“investment grade” properties and may exclude smaller and lower value assets.
CoStar reports about 3,600 apartment units (in apartment buildings; does not
include all rented housing units) and inventory growth of about 100 units per year
on average (Table 11). The market has had consistently low vacancy since 2010
when the vacancy rate was under 5.0 percent. In 2021 the vacancy rate is
reported at 2.1 percent, which indicates that the market is undersupplied with
rental housing. More supply is needed to provide more housing to the labor force
and to ease pressure on rising rental rates.
Table 11. Multifamily Summary, Gallatin County
Description 2010 2015 2020 2021 Total Ann. #Ann. %
Inventory
Bozeman 2,507 2,963 3,620 3,620 1,113 101 3.4%
Gallatin County 3,047 3,516 4,189 4,189 1,142 104 2.9%
Pct. Of County 82.3%84.3%86.4%86.4%97.5%
Avg. Rent (per sq.ft.)
Bozeman $1.19 $1.30 $1.55 $1.72 $0.53 $0.05 3.4%
Gallatin County $1.18 $1.29 $1.53 $1.70 $0.52 $0.05 3.4%
Avg. Rent (monthly)
Bozeman $1,079 $1,175 $1,400 $1,557 $478 $43 3.4%
Gallatin County $1,060 $1,153 $1,376 $1,526 $466 $42 3.4%
Avg. Vacancy
Bozeman 4.4%5.9%4.2%2.2%-2.2%-0.2%-6.1%
Gallatin County 4.2%5.5%3.8%2.1%-2.1%-0.2%-6.1%
Source: CoStar; Economic & Planning Systems
2010-2021
31
Economic & Planning Systems, Inc.
21
Between 2015 and 2020 approximately 650 units were added to the inventory,
most of which are in the five new projects listed below (Table 12).
Table 12. Recent Multifamily Development Summary, Bozeman
Four luxury projects have come online with rents of approximately $2,300 to
$2,600 per month which is about $1,000 above the market average indicating
that the Bozeman market can support high end product. The Icon Apartments
have large units (2 bedroom ranges from 1,000 to 1,200 sq. ft.) with amenities
such as a pool and fitness center. The One 11 Lofts and Black Olive properties are
mixed use apartments in Downtown Bozeman. Creekside is a more conventional
property located in a retail district near North 19th Ave and I-90.
Name Address Year Built Units
Per Unit
Notable Deliveries
Icon Apartment Homes 4555 Fallon St 2020 216 $2,341
Creekside Apartments 3266 N 27th Ave 2020 142 $1,744
One 11 Lofts 111 W Lamme St 2020 55 $2,577
Black Olive 110 E Olive St 2019 47 $2,565
Total/Average 460 $2,307
Source: CoStar; Economic & Planning Systems
Avg. Effective Rent
Icon Apartments One 11 Lofts
Black Olive Apartments
Creekside Apartments
32
Bozeman Economic and Market Update
22
Affordability
The rapid increases in housing prices has priced many people out of the market.
In 2016, a household earning about 120 percent of the HUD area median income
(AMI) could afford the median priced home. In 2020, a household needed to earn
171 percent of AMI to afford a median priced home and 219 percent of AMI in
2021. The combination of a shortage of inventory, a spike in construction costs,
and pandemic related migration have driven up housing prices sharply. Increasing
the supply of housing will be important to addressing the shortage of attainable
and affordable housing.
Table 13. Required Annual Income to Afford Median Home Price, 2016-2021
In 2016 the income levels needed to afford the median priced home were at 80 to
100 percent of AMI (Figure 6). In 2021 there are income gaps at all AMI levels
below about 220 percent of AMI. Households earning 150 percent of AMI
($103,880) would still need to earn another $38,000 per year to afford the
median priced home (Figure 7).
Bozeman Factor 2016 2017 2018 2019 2020 2021
YTD Oct
Median Home Price $359,500 $381,500 $427,500 $460,000 $540,000 $700,000
Mortgaged Amount (less: downpayment)5.0% down pmt $341,525 $362,425 $406,125 $437,000 $513,000 $665,000
Mortgage Interest Rate 4.5% int.4.5% int.4.5% int.4.5% int.4.5% int.4.5% int.
Loan Term 30-years 30-years 30-years 30-years 30-years 30-years
Monthly Costs
Mortgage Payment (Monthly)$1,730 $1,836 $2,058 $2,214 $2,599 $3,369
Less: Insurance $1,500 / Year $125 $125 $125 $125 $125 $125
Less: Property Taxes 0.9%$270 $286 $321 $345 $405 $525
Less: Miscellaneous $500 / Year $42 $42 $42 $42 $42 $42
Total Monthly Housing Costs $2,167 $2,289 $2,545 $2,726 $3,171 $4,061
Required Annual Income 30%$86,670 $91,566 $101,803 $109,035 $126,838 $162,445
AMI for Family of 4 117%123%137%147%171%219%
[1] rounded to nearest major AMI category
Source: US Census; Economic & Planning Systems
33
Economic & Planning Systems, Inc.
23
Figure 6. Income Gap to Afford Median Priced Home, Bozeman, 2016
Figure 7. Income Gap to Afford Median Priced Home, Bozeman, 2021
In housing policy, a household is defined as cost burdened when they are paying
more than 30 percent of their income towards rent or mortgage payments.
Among renters there is a large amount of cost burdened households – more than
half of all renters. About a quarter of Bozeman homeowners are cost burdened
and the American Community Survey estimates these households declined slightly
from 2010 through 2019. The data mostly reflect people who already own their
homes and have not caught up with new buyers in the market at the higher prices
noted above.
$59,360
$74,200
$89,040
$103,880
$27,310 $12,470
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
80%100%120%150%
AMI (2.5-person household)
AMI (4-person household)Gap
Source: U.S.Census; Economic & Planning Systems
$86,670 Income Required to Afford Median Home Price (2016)
$71,120
$88,900
$106,680
$124,460$91,325 $73,545 $55,765 $37,985
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
80%100%120%150%
AMI (2.5-person household)
AMI (4-person household)Gap
Source: U.S.Census; Economic & Planning Systems
$162,445 Income Required to Afford Median Home Price (2021)
34
Bozeman Economic and Market Update
24
Housing Demand
In this section, a housing demand projection is provided to inform the City as well as
real estate interests on the growth potential and need in Bozeman. The projection
links job growth to housing demand and estimates that the City needs nearly 900
housing units annually (Table 14) just to keep up with job growth at 2.0 percent
per year (compared to 2.8 percent annual growth over the past five years).
However, there are other strong market demand drivers that need to be accounted
for. The degree of price appreciation seen indicates that there are external factors
at work that are constraining the supply of housing. These factors are difficult to
account for as they are not apparent in the available housing and economic data.
First, because Bozeman is becoming more of a destination for second homeowners
and part time residents an additional 10 percent is added to the demand
estimate. Second, remote worker in-migration is occurring. There is no data
available today that tracks remote workers because their paychecks are
associated with the physical off location of their job. We have added another 10
percent to the demand projections.
In total, we estimate that the City can support demand for over 1,000 housing
units per year (Table 14). A potential housing mix based on past construction
and goals of supporting small homes and infill construction is suggested as well
(Table 15).
Table 14. Bozeman Housing Demand Projection
Description Factor 2020 2030 Total Annual
Total Jobs - Gallatin County 2.5%94,550 121,030 26,480 2,648
Less: Proprietor Jobs Overcount [1]-10.0%-9,460 -12,100 -2,640 -264
Employed People 1.10 jobs/empl.77,355 99,027 21,673 2,167
Employed Households 1.30 jobs/household 59,500 76,170 16,670 1,667
Normal Vacancy Adjustment 5%3,130 4,010
Housing Units - Gallatin County 62,630 80,180 17,550 1,755
Baseline Demand - Bozeman
Bozeman Market Share 50.0%31,320 40,090 8,770 877
Other Market Influences
Part Time Residence Adjustment 10%974
In-migration and remote worker adjustment 10%1,083
[1] Counting of partnerships and LLCs in Bureau of Economic Analysis data often results in double counting of employees.
Source: Economic & Planning Systems
2020-2030
35
Economic & Planning Systems, Inc.
25
Table 15. Bozeman Housing Demand Projection
Description Factors 2020-2025 2026-2030 Total Annual
New Unit Demand in Bozeman 1,083/yr.5,414 5,414 10,827 1,083
Bozeman Construction Projection
Single-Family (Detached)35.0%1,895 1,895 3,790 379
Townhome/Triplex/Duplex 30.0%1,624 1,624 3,248 325
Multifamily 35.0%1,895 1,895 3,790 379
Total 100.0%5,414 5,414 10,827 1,083
[1] Mobile homes and other miscellaneous housing types are not included
Source: Economic & Planning Systems
36
Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:Seat at the Table Presentation
MEETING DATE:May 4, 2022
AGENDA ITEM TYPE:Plan/Report/Study
RECOMMENDATION:Listen and ask questions regarding the Seat at the Table presentation
STRATEGIC PLAN:1.1 Outreach: Continue to strengthen and innovate in how we deliver
information to the community and our partners.
BACKGROUND:Tanya Andreasen from One Valley Community Foundation will present
outcomes from the county-wide community engagement initiative called A
Seat at the Table, held last fall. A Seat at the Table 2021 focused community
conversations and data gathering on housing affordability and attainability
for those who work, live, and do business in Gallatin County. The outcomes
report along with a resource that gives a snapshot of current housing work
and projects are both available at onevalley.org/regionalhousing. Outcomes
are meant to communicate lived experiences of participants and their ideas
about housing solutions to decision makers and funders.
UNRESOLVED ISSUES:None.
ALTERNATIVES:None.
FISCAL EFFECTS:None.
Report compiled on: April 27, 2022
37
Memorandum
REPORT TO:Economic Vitality Board
FROM:Renata Munfrada, Community Housing Program Coordinator
David Fine, Economic Development Manager for Housing and Development
Brit Fontenot, Director of Economic Development Department
SUBJECT:Provide recommendation to the City Commission regarding Ordinance 2111,
Administrative Departures for Housing Creation and to Define Infill and
Missing Middle Housing
MEETING DATE:May 4, 2022
AGENDA ITEM TYPE:Ordinance
RECOMMENDATION:I move to recommend approval of Ordinance 2111 to the Bozeman City
Commission.
STRATEGIC PLAN:4.5 Housing and Transportation Choices: Vigorously encourage, through a
wide variety of actions, the development of sustainable and lasting housing
options for underserved individuals and families and improve mobility
options that accommodate all travel modes.
BACKGROUND:The 2019 City of Bozeman Community Housing Needs Assessment identified
a need for between 5,400 and 6,340 housing units over the next five years to
address the City's current housing shortfall. Within this shortfall, there is a
significant demand for units priced below market rate. While increasing the
supply of housing will not, by itself, guarantee that housing becomes more
affordable, it is very unlikely affordability can be improved without an
increase in housing supply. Increased supply allows Bozeman residents more
opportunities to move to different units that better suit their needs in both
existing neighborhoods and new development.
Departures are an existing tool used to allow alternative compliance with
adopted standards. It is difficult to imagine every possible outcome for a
standard when applied to specific properties. Departures allow for minor
adjustments consistent with the purpose of a standard and integrate within
existing review processes to "smooth the edges" while retaining the integrity
of the standards. Clarion is suggesting some modest departures to provide
flexibility that can allow market rate developments to be completed more
affordably, within the spirit of the existing code standards. Examples of
departures include marginal flexibility related to setbacks, building height,
lot coverage, parking, and private open space requirements. Application of
these new departures will primarily be administrative.
38
Departures for housing creation allow City staff to approve development
that meets a less restrictive standard than usually applies to building home;
including allowing a smaller lot size, fewer parking spaces, home size, and
others established in the new wording. The additional flexibility is limited to
specific purposes and only applies to the standards and as far as established
in the new Departures section. Review of requested Departures is
coordinated with whatever review process is relevant to the requested
construction. The intent of this amendment is to make it easier to construct
homes, especially additional homes within already developed areas and
homes of types where there are fewer than desirable to support a broad
range of housing options in Bozeman.
The intent of this provision is to allow minor departures from existing
residential development standards when the review authority determines
that the departure will reduce the cost of production of and an increased
production of housing while maintaining consistency with the City's adopted
growth policy and purposes of Chapter 38 of the Unified Development Code.
These departures are especially applicable to infill sites and missing middle
housing. The review authority may approve departures from residential
standards if the review authority determines that the criteria outlined in
Ordinance 2111 have been met. Approval of a departure authorizes
development with a different standard that in otherwise required.
The Community Housing Program of the Economic Development
Department is requesting the Economic Vitality Board consider Ordinance
2111, an ordinance to create departures for housing creation, establishing a
new method of departures to authorize additional flexibility in the
administration of specified residential standards, amending Bozeman
Municipal Code, and make a recommendation to the City Commission. Public
Hearings to consider the text amendment to revise Chapter 38 of the Unified
Development Code to create departures for housing creation and to define
infill and missing middle housing will be held in order for the public to
provide comment. On Monday, May 16, 2022 at 6:00 p.m., the Community
Development Board, acting in their capacity as the Zoning Commission, will
conduct a public hearing. On Tuesday, June 7, 2022 at 6:00 p.m., the City
Commission will conduct a public hearing. At the City Commission's public
hearing the City Commission may act to approve, modify, or reject the
proposal or continue the public hearing to another date.
UNRESOLVED ISSUES:None at this time.
ALTERNATIVES:As recommended by the Economic Vitality Board.
FISCAL EFFECTS:None at this time.
Attachments:
Ordinance 2111 Departures Draft.pdf
39
Notice of Public Hearing Departures to Unified Development
Code.pdf
Report compiled on: April 29, 2022
40
Ord 2111
Page 1 of 7
ORDINANCE 2111 (DRAFT)
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA TO CREATE 38.320.070, DEPARTURES FOR HOUSING CREATION,
ESTABLISHING A NEW METHOD OF DEPARTURES TO AUTHORIZE ADDITIONAL
FLEXABILITY IN THE ADMINISTRATION OF SPECIFIED RESIDENTIAL
STANDARDS, AMENDING 38.700.100, I DEFINTIONS, AMENDING 38.700.120, M
DEFINTIONS, AND PROVIDING AN EFFECTIVE DATE, APPLICATION 22133.
WHEREAS, the City of Bozeman (the “City”) has adopted land development and use
standards to protect public health, safety and welfare and otherwise execute the purposes of
Montana Code Annotated §§ 76-1-102, 76-2-304, 76-3-102, and 76-3-501; and
WHEREAS, after proper notice, the Community Development Board in their capacity as Bozeman Zoning Commission held a public hearing on May 16, 2022 to receive and review all written and oral testimony on the proposed amendments; and WHEREAS, the Community Development Board acting in their capacity as the Bozeman
Zoning Commission recommended to the Bozeman City Commission that application No. 22133, be approved as proposed; and WHEREAS, after proper notice, the City Commission held its public hearing on June 7,
2022, to receive and review all written and oral testimony on the proposed amendment to the subdivision regulations; and
WHEREAS, the City Commission has reviewed and considered the applicable amendment criteria established in Montana Code Annotated § 76-2-304, and found that the
proposed amendments are in compliance with the criteria.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF BOZEMAN, MONTANA:
Section 1
Legislative Findings
The City Commission hereby makes the following findings in support of adoption of this
Ordinance:
41
Ordinance No. 2106, Departures for Housing Creation
Page 2 of 7
1. The City has adopted land development and use standards to protect public health, safety
and welfare and otherwise execute the purposes of Montana Code Annotated §§ 76-1-102, 76-2-
304, 76-3-102, and 76-3-501.
2. The City adopted a growth policy, the Bozeman Community Plan 2020 (BCP 2020), by
Resolution 5133 to establish policies for development of the community which policies include
support for infill and redevelopment, increased density of homes, and housing diversity.
3. Zoning and subdivision regulations must be in accordance with the adopted growth
policy; and the growth policy encourages development of standards to encourage infill
development and incremental increases in residential density in existing developed areas.
4. The City accepted as a basis for housing implementation actions an amended
Community Housing Action Plan by Resolution 5143.
5. The City undertook a public process to review and consider possible revisions to the
City zoning regulations with the intent to remove potential barriers and to encourage creation of
additional housing and especially housing which accomplishes community aspirations identified
in the growth policy and the Community Housing Action Plan.
6. The City Commission conducted a work session on March 1, 2022 to receive public
comment, consider alternative options, and provide direction to staff during which work session
they directed preparation of amendments in the form of those included with this ordinance.
7. A staff report analyzing the required criteria for an amendment to the City’s regulations
for zoning review, including the amendment’s accordance with the BCP 2020, and has found that
the required criteria of Montana Code Annotated § 76-1-304 are satisfied.
8. The necessary public hearings were advertised as required in state law and municipal
code and all persons have had opportunity to review the applicable materials and provide comment.
9. The City Commission considered the application materials, staff analysis and report,
recommendation of the Community Development Board acting in their capacity as the municipal
Zoning Commission, all submitted public comment, and all other relevant information.
10. The City Commission determines that, as set forth in the staff report and incorporating
the staff findings as part of the decision, the required criteria for approval of this ordinance are
satisfied.
42
Ordinance No. 2106, Departures for Housing Creation
Page 3 of 7
11. The City Commission determines that the ordinance provides a proper balance of
interests, rights, and responsibilities of all parties affected by the ordinance.
Section 2
That Section 38.320.070, Departures for Housing Creation, of the Bozeman Municipal Code be
created to read as follows:
38.320.070, Departures for Housing Creation
A. Intent. The intent of this provision is to allow minor departures from existing residential
development standards when the review authority determines that the departure will reduce
the cost of production of and an increase production of housing while maintaining
consistency with the City’s adopted growth policy and purposes of this chapter. These
departures are especially applicable to infill sites as defined in 38.700.100 and missing
middle housing as defined in 38.700.120.
B. Applicability. The review authority may approve departures from residential development
standards as identified in Table 38.320.070 if the review authority determines that the
criteria in Subsection C below have been met. Approval of a departure authorizes
development with a different standard than is otherwise required by this chapter.
Table 38.320.070
Ordinance Standard Amount of Departure Permitted from Standard
All Types of Residential Dwellings
Maximum or minimum
building setbacks
10% Reduction from minimum setback requirements, (which
may be limited by other standards or may have impacts on
construction costs); Does not apply to watercourse or floodplain
setbacks
Maximum building
height 5 feet above the maximum applicable limit in Division 38.320
Maximum lot coverage 10% above the maximum applicable limit in Division 38.320
Parking requirements
for single or multi-
household dwellings
with 2 or more
bedrooms
2 parking spaces per dwelling, without regard to number of
bedrooms in each dwelling for, not less than one and up to 5
dwellings or 20% of dwellings, in a development whichever is
more
Parking requirements
for multi-household
dwellings with one or
fewer bedrooms
1 parking space per dwelling for any efficiency or one-bedroom
unit for, not less than one and up to 5 dwellings or 20% of
dwellings, in a development whichever is more
Townhouse or Rowhouse Dwellings
Useable open space
(38.360.220)
Reduction of up to 20% in required dimension, or area, or both
of per-unit useable open space
43
Ordinance No. 2106, Departures for Housing Creation
Page 4 of 7
Multi-household Residential (5+ units)
Useable open space
(38.520.060)
20% reduction for any new development within one-quarter mile
pedestrian travel distance of an existing park
Accessory Dwelling Units (ADU)
Lot size ADUs may be permitted on any lot in a district where ADUs are
an allowed use that meets the lot size requirement for the
principal structure and all other standards in the zone district in
which the lot is located (except for lots under 3,000 sq. ft. in area
or lots containing attached townhomes), without the requirement
for 1,000 square feet of additional lot area
Number permitted Up to 1 internal and 1 detached ADU per lot
ADU size Minimum size is allowed to be above 600 feet up to a maximum
size of 60% of gross floor area of primary dwelling unit; or
If the ADU is above a garage: Equal to footprint of main floor of
garage; or
If the ADU is in an attic or basement: Equal to footprint of main
floor of the primary dwelling.
C. Criteria. To approve departures, the review authority must determine that criteria 1 and 2;
and at least one of criteria 3-5 are met:
1. The departure will result in at least one more home than would otherwise be possible; and
2. The purpose of the standard can still be accomplished if the departure is granted; and
3. The departure will not impose negative impacts on surrounding property; or
4. The departure is applicable to missing middle housing; or
5. The departure is applicable to an infill site.
D. Procedure. The request for a departure must be submitted with the initial application for any
development. Review times and processes are coordinated with the development
application. These departures are not applicable to subdivision reviews.
E. Appeals. A decision by the review authority to approve or deny a departure may not be
appealed independently, but the decision regarding an application as a whole that includes a
departure may be appealed pursuant to Division 38.250.
Section 3
That Section 38.700.100, I Definitions, of the Bozeman Municipal Code be amended to include a
new definition with the remainder of the section to remain as written:
44
Ordinance No. 2106, Departures for Housing Creation
Page 5 of 7
Infill. The development or redevelopment of vacant, abandoned, or underutilized properties
within or wholly surrounded by the City, and where water, sewer, streets, and fire protection
have already been developed and are provided. Infill is development proposed or located within
land that has been subdivided for at least 35 years.
Section 4
That Section 38.700.120, M Definitions, of the Bozeman Municipal Code be amended to include
a new definition with the remainder of the section to remain as written:
Missing middle housing. A residential building containing two, three, or four dwellings in
any configuration, as well as townhomes and cottage housing.
Section 5
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are hereby repealed and all other provisions of the ordinances of the City of
Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect.
Section 6
Savings Provision.
This ordinance does not affect the rights and duties that matured, penalties that were
incurred, or proceedings that were begun before the effective date of this ordinance. All other
provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full
force and effect.
Section 7
Severability.
That should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so
decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 8
Codification.
45
Ordinance No. 2106, Departures for Housing Creation
Page 6 of 7
This Ordinance shall be codified as appropriate in Section 2 – 4.
Section 9
Effective Date.
This ordinance shall be in full force and effect thirty (30) days after final adoption.
PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman,
Montana, on first reading at a regular session held on the _____ day of ________________, 2022.
____________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
____________________________________
MIKE MAAS
City Clerk
FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the
City of Bozeman, Montana on second reading at a regular session thereof held on the ___ of
____________________, 2022. The effective date of this ordinance is __________, __, 2022.
_________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_______________________________
MIKE MAAS
City Clerk
46
Ordinance No. 2106, Departures for Housing Creation
Page 7 of 7
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
47
Notice Of Public Hearings To Consider A Text Amendment To Revise Chapter 38,
Unified Development Code, Of The Bozeman Municipal Code To Create Departures For Housing Creation And To Define Infill And Missing Middle Housing On Monday, May 16, 2022 at 6:00 p.m., the Community Development Board acting in their
capacity as the Zoning Commission will conduct a public hearing on an amendment to municipal code
in the Commission Room at City Hall, 121 N. Rouse Ave. Bozeman MT. Members of the public will also be able to participate remotely via WebEx. Instructions for joining the WebEx meeting will be included on the meeting agenda which is published on the City’s website at least 48 hours prior to the meeting. The agenda is available at https://www.bozeman.net/meetings.
On Tuesday, June 7, 2022 at 6:00 p.m., The City Commission will conduct a public hearing on an amendment to the municipal code. in the Commission Room at City Hall, 121 N. Rouse Ave. Bozeman MT. Members of the public will also be able to participate remotely via WebEx. Instructions for joining the WebEx meeting will be included on the meeting agenda which is published on the City’s website at
least 48 hours prior to the meeting. The agenda is available at https://www.bozeman.net/meetings.
The purpose of the public hearings is to consider the proposed amendments that will:
1. Create a new section 38.320.070, Departures for Housing Creation.
2. Create a new definition for Infill to be included in section 38.700.100, I definitions.
3. Create a new definition for Missing middle housing to be included in section 38.700.120, M
definitions.
So what? Departures allow the city staff to approve development that meets a less restrictive standard than usually applies to building homes; including allowing a smaller lot size, fewer parking spaces, home size, and others established in the new wording. The additional flexibility is limited to specific purposes and only applies to the standards and as far as established in the new Departures
section. Review of requested Departures is coordinated with whatever review process is relevant to the requested construction. The intent of this amendment is to make it easier to construct homes, especially additional homes within already developed areas and homes of types where there are fewer than desirable to support a broad range of housing options in Bozeman.
This application is evaluated against the requirements and purposes of zoning set in state law in Title
76 Chapter 2, Section 304, Montana Code Annotated. Approval or contingent approval may be granted if the City Commission determines all applicable criteria are met. How do I participate? The public may comment orally at the public hearings or in writing at or prior to the public hearings regarding compliance of this application with the required criteria. Comments should identify the specific criteria of concern along with facts in support of the comment.
During the notice period the City will continue review for compliance with applicable regulations.
The complete text of the proposal is available through the Department Community Development, 20 E Olive Street, Bozeman MT 59715; 406-582-2260, and online at https://www.bozeman.net/departments/economic-development/community-housing/bozeman-code-
48
audit-to-create-and-preserve-housing. The proposal may be revised as the public review process
proceeds.
The City invites the public to comment in writing and to attend the public hearings. Written comments may be directed to Chris Saunders at the City of Bozeman, Department of Community Development, PO Box 1230, Bozeman, MT 59771-1230. Comments may also be emailed to agenda@bozeman.net. Please reference Ordinance 2111 in all correspondence.
For those who require accommodations for disabilities, please contact Mike Gray, City of Bozeman
ADA Coordinator, 582-3232 (voice), 582-3203 (TDD).
Who Decides? At the City Commission’s public hearing the City Commission may act to approve, modify, or reject the proposal or continue the public hearing to another date. The City Commission may revise any of the proposed actions referred in this notice during the public hearing
process.
49