HomeMy WebLinkAbout11-01-23 EV Board Agenda and Packet MaterialsA.Call to Order - 6:00 PM
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B.Disclosures
C.Changes to the Agenda
D.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 per topic. Please note, the Board cannot take action on any
item which 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.
E.FYI/Discussion
THE ECONOMIC VITALITY BOARD OF BOZEMAN, MONTANA
EVB AGENDA
Wednesday, November 1, 2023
General information about the Economic Vitality Board is available in our Laserfiche repository.
If you are interested in commenting in writing on items on the agenda please send an email to
agenda@bozeman.net or by visiting the Public Comment Page prior to 12:00pm on the day of the
meeting.
Public comments will also be accepted in-person and through Video Conference during the appropriate
agenda items.
As always, the meeting will be streamed through the Commission's video page and available in the
City on cable channel 190.
For more information please contact Brit Fontenot, bfontenot@bozeman.net
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E.1 Belonging in Bozeman Plan Update(Hess & Lyon)
E.2 Commission Action Updates(Fontenot )
E.3 2023 Economic and Market Update Discussion (Fontenot / DiTommaso )
E.4 Update on Board Terms & Upcoming Meetings (DiTommaso)
F.Adjournment
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 the City for ADA coordination, 406.582.2306 (TDD 406.582.2301).
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Memorandum
REPORT TO:Economic Vitality Board
FROM:Dani Hess, Community Engagement Coordinator
Nakeisha Lyon, Associate Planner
SUBJECT:Belonging in Bozeman Plan Update
MEETING DATE:November 1, 2023
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:NA
STRATEGIC PLAN:3.3 Friendly Community: Ensure Bozeman continues to welcome diversity
through policies and public awareness.
BACKGROUND:INTRODUCTION
This written summary serves as the Economic Vitality board's monthly
update on the progress to develop the city's Belonging in Bozeman Equity &
Inclusion Plan. The Belonging in Bozeman Plan follows through on the
commitment made in both Resolution 5384 establishing the City as a City for
CEDAW, as well as the Inclusive City Report to develop a community wide
action plan.
The Equity & Inclusion Plan is guided by existing data from the Equity
Indicators Project, ongoing data collection efforts set forth in the CEDAW
resolution, and will recommend polices, practices, and programs to address
disparities found in the data. The purpose of the plan is to ensure that every
resident, visitor, and City of Bozeman employee feels welcomed, valued, and
can thrive no matter their race, identity, or life circumstance.
PROGRESS HIGHLIGHTS
Highlights from the work that has occurred since October's work session
with the Economic Vitality Board include finalizing the Community Liaison's
final recommendations and summaries of their efforts, meeting with
community partners and city departments about priority, lead organizations
and partners, resources needed, metrics, and progress indicators for each of
the recommendations in the draft plan.
COMMUNITY LIAISONS
Community Liaisons Chace McNinch, Kristen Newman, and Jhenniffer
Cifuentes have facilitated a combined 6 community chats with nearly 60
participants representing or connected to the LGBTQ+, disability, and
Spanish-speaking communities. Liaisons' recommendations center the input
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received in the Community Chats and have been integrated into the draft
goals and recommendations of the plan. Their final task is to summarize
their work in a final report that will be included in the plan appendices.
DEVELOPING GUIDANCE FOR IMPLEMENTATION
The draft goals and recommendations have been developed by our
Belonging in Bozeman Steering Committee, participants in Community
Chats, at partner organizations, as well as with the input of the Economic
Vitality Board, and City Commission. In the October work sessions with the
Economic Vitality Board (10/4/23) and City Commission (10/17/23), staff
heard:
Emphasize food security with partners in schools
The need for the City of Bozeman to set the standard in areas like
economic security and fair workplaces (pay equity and gender equity),
and turn that work outward so other organizations can follow suit
Include partners like Prospera and RMEDD
Better define sexual health in addition to reproductive health
Work with partners at the congressional level on supporting our
immigrant community
Clarify staff roles and work around ADA and accessibility at the city
Characterize level of priority in the final goals and recommendations
worksheet in a way that doesn't just prioritize the "low-hanging fruit,"
but also the most urgent issues
Staff are finalizing the Goals & Recommendations workbook with this input
in mind and are working on additional columns that include:
Priority: A prioritization matrix is being used to rank priority level of
each recommendation based on ease of implementation and level of
impact. Ease of implementation depends on factors like existing
efforts underway, capacity and resources available, and cost. Level of
impact depends on alignment with existing priorities and how directly
the recommendation addresses the goal, vision statement, and
relevant equity indicators.
Priority 1 indicates recommendations that have relatively high
impact and ease of implementation and should be undertaken
early on.
Priority 2 indicates recommendations that have relatively high
impact and may be more difficult to implement and may need
more time to gather resources and build capacity
Priority 3 indicates recommendations that have relatively lower
impact and ease of implementation and should be undertaken
following successful implementation of Priority 1
recommendations
Lead + Partner Organizations: Each indicator will have the lead
organization and partners listed who will be responsible for
implementation and providing progress updates to the city annually
Resources needed: Broadly state what will be required for
implementation such as "staff time" "additional funding (with
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potential sources)" "political/voter support"
Metric: A measurement or indication of how we will know the
recommendation has been implemented. In some cases it will be
quantitative information (number of housing units created for <60%
AMI), in some cases it will be qualitative (3 workshops hosted,
resources shared on city and partner websites)
Progress: Indicates whether the recommendation is "Not yet started,"
"In-progress," "Ongoing," or "Completed" and will be updated
annually
NEXT STEPS
Staff will work with partners to gather their final input on this expanded
workbook and bring back a final version incorporated into the draft plan
narrative for final consideration and recommendation by the Economic
Vitality Board to the City Commission on December 6th 2023!
UNRESOLVED ISSUES:NA
ALTERNATIVES:NA
FISCAL EFFECTS:NA
Report compiled on: October 27, 2023
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Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:Commission Action Updates
MEETING DATE:November 1, 2023
AGENDA ITEM TYPE:Administration
RECOMMENDATION:Inform the board on recent Commission policy decisions related to short
term rentals, urban camping, and the unified development code.
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:We will discuss Commission action on Ordinance 2147, Regulations for
Camping in the Right-of-Way. Board members can view the Commission
meeting and discussion here. The Ordinance is attached.
We will discuss Commission action on Ordinance 2149, Regulations for Short
Term Rentals. Board members can view the Commission meeting and
discussion here. A draft of the Ordinance is attached (without amendments
made during the meeting).
We will discuss Commission action on the Unified Development Code.
Information on the UDC update, including a recent press release can be
found on Engage Bozeman.
UNRESOLVED ISSUES:None.
ALTERNATIVES:None.
FISCAL EFFECTS:None.
Attachments:
Final_Ordinance_2147.pdf
DRAFT_Ord._2149_9.26.23.pdf
Report compiled on: October 27, 2023
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ORDINANCE 2147
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, ADOPTING REGULATIONS FOR CAMPING ON CITY RIGHT OF WAY.
WHEREAS, the City of Bozeman (the “City”) is authorized by the City Charter and
Montana law to establish programs and laws to protect public the health, safety and welfare of the
residents of Bozeman; and
WHEREAS, pursuant to its Charter, the Montana Constitution, and state law, the City may
exercise any power not prohibited by the constitution, law or charter and neither the Montana
Constitution, state law, or the City Charter prohibits the City Commission from adopting this
Ordinance; and
WHEREAS, pursuant to §7-14-4101, MCA, the City has the authority to prevent the
encumbering of streets, sidewalks, alleys or public grounds with obstacles or materials; and
WHEREAS, the United States Supreme Court has long recognized that a municipality has
the right to regulate the use of city streets to assure the safety and convenience of the people in
their use, and further, that governmental authorities have the duty and responsibility to keep their
streets open and available for movement (Cox v. Louisiana, 379 U.S. 536 (1965)); and
WHEREAS, in 2019, the United States Ninth Circuit Court of Appeals (Ninth Circuit)
issued its decision in Martin v. Boise, 920 F.3d 584 (9th Cir. 2019), holding in part that the Cruel
and Unusual Punishments Clause of the Eighth Amendment “prohibits the imposition of criminal
penalties for sitting, sleeping, or lying outside on public property for homeless individuals who
cannot obtain shelter;” and
WHEREAS, in 2022, the Ninth Circuit issued its decision in Johnson v. City of Grants
Pass, 50 F.4th 787 (9th Cir. 2022), holding local ordinances violated the Eighth Amendment to
the extent the ordinances prohibited individuals from taking minimal measures to keep warm and
dry while sleeping (including sleeping in vehicles); and
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WHEREAS, currently there are approximately 200 recreational vehicles, campers, vans
and other vehicles on the public right-of-way throughout the city wherein people are residing or
using the right-of-way for additional storage, and the Commission finds this Ordinance necessary
to ensure the public rights-of-way intended for the purposes of travel for all residents are
unencumbered, that street maintenance including snow removal can occur as needed, that solid
waste or other waste does not accumulate impacting the health of residents or negatively impact
stormwater systems, and to balance community interests and concerns; and
WHEREAS it necessary for the health, safety, and welfare of all residents of the City and
users of the public rights-of-way to align the municipal code with federal law and provide
appropriate time, place and manner restrictions on the use of the public right-of-way for camping.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF BOZEMAN, MONTANA:
Section 1
That the Bozeman Municipal Code is amended as follows to add a new Article to Chapter 34:
Article 9. Camping on Public Right-of-Way.
Sec. 34.09.010 Definitions.
A. The following words, terms and phrases, when used in this article, have the meanings
ascribed to them in this section, except where the context clearly indicates a different
meaning:
1. “Camping” or “camp” means to pitch, erect, create, inhabit, use, or occupy camp
facilities in, or otherwise inhabit, the public right-of-way.
2. “Camp facility” or “camp facilities” include but are not limited to tents, huts,
temporary shelters, structures, vehicles as defined in 36.01.020, recreational
vehicles with or without motive power designed for use as temporary living
quarters or camping, motor homes, camping trailers, tent trailers, truck campers,
camper vans, structures, or any other item used for the purpose of camping.
3. “A person experiencing homelessness” means a person that does not have the
means to acquire their own shelter and who does not otherwise have access to
shelter or transitional housing.
4. “Public right-of-way” means all real property (including property owned in fee or
obtained through easement or dedication) administered by the city and which is
used for transportation purposes, including streets, roads, bridges, alleys, sidewalks
and boulevards, trails, paths, and other public ways.
Sec. 34. 09.020 Camping on Public Right-of-Way is Prohibited.
A. Camping on the public right-of-way within city limits is prohibited, except as provided
in subsections B and C of this section.
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B. A city employee with authority to enforce this article must refer a person experiencing
homelessness camping on the public right-of-way to an available shelter facility or
other available temporary housing. A person experiencing homelessness may only
camp on the public right-of-way when a shelter facility or other temporary housing is
not available.
C. If space in a shelter facility or other temporary housing is not available, a person
camping on the public right-of-way must comply with the following:
1. Time: No camping may occur in the same location on the public right-of-way
for more than 30 consecutive days. No camp facilities may be located or used
for camping in the same location or on the same street on the public right-of-
way for more than 30 consecutive days. After 30 consecutive days a camp
facility must be moved to a different named street.
a. A person experiencing homelessness may apply to the city manager for
written permission to exceed the length of time restrictions described
above.
b. Factors the city manager may consider in granting permission include
but are not limited to the location of the camp facilities, the person’s
employment status, site conditions, and the person’s connections to
social services and the community.
2. Place: Camping on the public right-of-way is prohibited, regardless of the
availability of shelter space, in the following locations:
a. Adjacent to or immediately across from any parcel or lot containing a
residential dwelling including lots or parcels with multi-household
dwellings;
b. Within 100 feet of a public entrance of any commercial business or non-
profit organization;
c. Adjacent to or immediately across from the boundary of any public
park;
d. Adjacent to or immediately across from any parcel or lot containing
any public or private school, including secondary, elementary, or
preschool, or any lot or parcel containing a daycare;
e. Any location in violation of any posted parking signs or painted curbs
prohibiting parking or otherwise limiting the hours of parking;
f. Within a bike lane, street median, sidewalk, or public pathway or trail.
3. Manner:
a. All camp facilities and their immediate area must be maintained in a
clean and orderly manner. A clean and orderly manner includes, but is
not limited to, all waste, debris and trash must be in a container and
personal items, when not actively being used, must be stored inside a
camp facility.
b. No waste, sewage, debris, trash, personal items, or additional vehicles
or trailers may be discarded of or stored in the right of way.
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c. No fires are permitted within the public right-of-way.
d. Generators must be stored and located on a paved surface. Fuel must be
in containers designed for the fuel stored therein.
e. Camping on the paved surface of any street in a tent, tarp, or in only
sleeping bags, blankets, or other rudimentary forms of protection from
the elements, is prohibited.
f. No structures may be built or maintained on the public right-of-way
pursuant to 34.02.050.
Sec. 34.09.030 Violations; penalties
A violation of 34.09.020 shall be a municipal infraction pursuant to Chapter 24, Article 2 of this
Code subject to the following:
A. Each violation of 34.09.020 shall be punishable by a civil penalty not to exceed twenty-
five dollars. Each day a violation occurs constitutes a separate offense.
B. In addition to the requirements of 24.02.030B, the city must prove by clear and convincing
evidence that three warnings were given to the person prior to the issuance of the first
municipal infraction under any subsection of Sec. 34. 09.020C.
C. If unsanitary conditions exist, the city may abate or cause to be abated any waste, debris,
trash, structure, tent, property, or item in the public right-of-way by conspicuously posting
a 72-hour notice of abatement. After the 72-hour notice period, any property remaining
will be considered abandoned and subject to disposal. No notice is required to abate a
condition impeding traffic or when the condition poses an imminent risk to public health
or safety.
D. The city may remove or cause to be removed any camp facility in violation of
34.09.020.C.2 after posting a notice on or near the camp facility for at least 24 hours prior
to removal. No notice is required if the camp facility is impeding traffic or poses an
imminent risk to public health or safety.
E. In the event a camp facility belonging to a person experiencing homelessness is towed or
impounded by the city, no fees will be associated with the first or second towing or
impoundment. In the event the city tows or causes to be towed a camp facility belonging
to a person experiencing homelessness three (3) or more times due to violations of this
article, costs of towing and impoundment may be assessed against the owner.
F. This Article may be enforced by any city law enforcement officer, code enforcement
officer, parking enforcement officer or other employee upon written designation by the city
manager. Determinations regarding abatement or emergency removal without notice shall
be made by the director of transportation and engineering or their designee.
Section 2
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this Ordinance are, and the same are hereby, repealed and all other provisions of the ordinances of
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the City of Bozeman not in conflict with the provisions of this Ordinance shall remain in full force
and effect.
Section 3
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 4
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 5
Codification. The provisions of Section 1 shall be codified as appropriate in Chapter 34 of the Bozeman
Municipal Code.
Section 6
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 19th day of September, 2023.
____________________________________
CYNTHIA L. ANDRUS
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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 therefor held on the 24th day
of October 2023.
____________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_______________________________
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
________________________________
GREG SULLIVAN
City Attorney
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Page 1 of 17
ORDINANCE 2149
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA TO GENERALLY REVISE BOZEMAN MUNICIPAL CODE RELATED
TO SHORT TERM RENTALS INCLUDING GENERALLY REVISING SECTION
38.360.260 – SHORT TERM RENTALS INCLUDING: DISCONTINUING AND
PROHIBITING TYPE 3 SHORT TERM RENTALS AS AN AUTHORIZED USE IN ANY
ZONING DISTRICT; CREATING DEFINITIONS OF “HOST” AND “PRIMARY
RESIDENCE,” WHICH REQUIRES A PERSON TO OCCUPY A DWELLING UNIT FOR
SEVENTY PERCENT OF THE CALENDAR YEAR; CREATING NEW CATEGORIES
AND REGULATIONS FOR TYPE 2 SHORT TERM RENTALS; AMENDING LAND USE
TABLES 38.310.030.B AND 38.310.040.B TO IDENTIFY SHORT TERM RENTALS AS
AN ACCESSORY USE; AND AMENDING THE DEFINITIONS OF “DWELLING” AND
“SHORT TERM RENTAL” IN BOZEMAN MUNICIPAL CODE DIVISION 38.700.
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, pursuant to the Bozeman City Charter, in addition to authority to regulate
short term rental conferred upon it by the State of Montana, the City of Bozeman hereby relies
upon its self-government powers; and
WHEREAS, after proper notice, the Community Development Board in their capacity as
Bozeman Zoning Commission held a public hearing on October 2, 2023 to receive and review all
written and oral testimony on this proposed ordinance; and
WHEREAS, the Community Development Board acting in their capacity as the Bozeman
Zoning Commission recommended to the Bozeman City Commission that Ordinance 2149 be
approved as proposed; and
WHEREAS, after proper notice, the City Commission held its public hearing on October
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17, 2023 to receive and review all written and oral testimony on the proposed amendment to the
City’s short term rental regulations; and
WHEREAS, the City Commission has reviewed and considered the applicable amendment
criteria established in Montana Code Annotated § 76-2-304, and found 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:
1. The Montana Constitution, Article XI, § 4(2), states the powers of incorporated cities, which
shall be liberally construed, and Article XI, § 6 of the Montana Constitution expressly authorizes
a local government with self-government powers to exercise any power not prohibited by the
constitution, law, or charter.
2. 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 and 76-2-
304.
3. The City Commission approved The Bozeman Community Housing Action Plan on November
18, 2019, which was amended on January 13, 2020. The Action Plan recommends on-going
evaluation of regulatory policies including: prohibiting or limiting the use of homes for short-term
rentals in specified neighborhoods or zones; placing resident-occupancy requirements on units that
are rented short-term; requiring a host to obtain approval from the City prior to using property as
a short-term rental and authorizing the city to charge fees, and other options.
4. On August 9, 2022, the Bozeman City Commission held a work session to discuss short term
rentals and their influence on the local housing market and home affordability. The City
Commission directed staff to draft an ordinance regulating short term rental online booking
platforms as one measure to increase compliance with existing regulations, and to require regular
reporting to obtain more information about short term rentals in Bozeman. Ordinance 2131 was
adopted in response and became effective on August 11, 2023.
5. On August 8, 2023, the Bozeman City Commission held another work session to discuss short
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Page 3 of 17
term rentals and their influence on the local housing market and home affordability. The City
desires to preserve its available housing stock and the quality of life in its residential
neighborhoods and to alleviate the impacts to residential neighborhoods caused by the operation
of short term rentals. The short term rental of a person’s primary residence does not displace the
primary resident from the dwelling unit and does not cause as significant a removal of existing
housing stock from the market or as negative an impact to the available housing stock. Therefore,
the City Commission directed staff to draft an ordinance restricting the types of short term rentals
allowed within the City of Bozeman, increasing the amount of time a person must occupy their
primary residence to be allowed to offer the residence as a short term rental, and regulate the short
term rental of accessory dwelling units on the same lot or dwellings in the same building as a host’s
primary residence (e.g. duplex, triplex, fourplex, and apartment buildings).
6. City staff prepared a report with this Ordinance analyzing the required criteria for an
amendment to the City’s regulations for zoning review, including the amendment’s accordance
with the Bozeman Community Plan 2020, and found that the required criteria of Montana Code
Annotated § 76-1-304 are satisfied.
7. The City Commission determines this Ordinance provides a proper balance of interests, rights,
and responsibilities of all parties affected by the ordinance and substantially complies with the
Bozeman Community Plan 2020 and complies with all applicable State criteria for adoption of
zoning regulations.
Section 2
That Section 38.360.260 of the Bozeman Municipal Code be amended as follows:
Sec. 38.360.260. Short term rentals.
A. Purpose and intent. The purpose of this section is to provide for the regulation of short term
rentals in certain zoning districts within the city in order to preserve neighborhood character
and promote a supply of long term rental housing stock, while encouraging economic activity
and diversity, and to promote public health, safety, and welfare.
B. Applicability.
1. The provisions of this section apply to transient occupancy of a short term rental as
defined herein.
2. This section does not apply to any rental of a dwelling unit which is governed and
defined by The Montana Residential Landlord and Tenant Act of 1977 (Landlord Tenant
Act).
3. A lower-priced or moderate-priced home subject to and defined by chapter 38, article
380, or a dwelling that received financial support from the city, including but not limited
to down payment assistance, impact fee payment, or other consideration including
affordable units developed using regulatory incentives, infrastructure prioritization or
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Page 4 of 17
assistance or a financial subsidy, may not be used as a short term rental until such time as
either the lien instrument against the property in favor of the city securing the amount of
such subsidy has been released and the release recorded with the Gallatin County Clerk
and Recorder's Office or the expiration of an applicable affordability covenant. The
prohibition on use as a short term rental under this subsection will continue until the later
of a lien release or expiration of an affordability covenant.
C. Definitions. For purposes of this article, the following definitions apply:
1. "Booking transaction" means any reservation or payment service provided by a hosting
platform that facilitates a short term rental transaction between an owner and a transient
occupant.
2. “Host” means a natural person who occupies a dwelling unit as the person’s primary
residence and has the legal right to offer the dwelling unit for use as a short term rental.
32. "Hosting platform" means a person or entity that participates in the short term rental
business by collecting or receiving a fee directly or indirectly for any booking transaction
through which an owner may offer a dwelling unit or portion thereof for transient
occupancy. Hosting platform includes but is not limited to an online service and an
individual using any other means to collect or receive a fee on behalf of an owner for a
transient occupancy of a short term rental.
3. "Owner" includes any part owner, joint owner, tenant in common, joint tenant, tenant by
the entirety, or lessee with exclusive possession under a valid long-term lease or rental
agreement.
4. "Owner-occupied" means the owner provides the city evidence the owner occupies the
dwelling as his or her principal residence for more than 50 percent of the calendar year.
45. "Operate, operation of," or "operating a short term rental" means the short term rental has
been rented by or on behalf of the host owner to the general public for compensation for
transient occupancy. "Operate" "operation of" or "operating" a short term rental does not
include mere advertisement of or offering to rent short term rental(s).
5. “Primary residence” means the dwelling unit a natural person occupies for a minimum of
seventy percent of the calendar year. A natural person can have only one primary
residence.
6. "Responsible person" means the person responsible for addressing all maintenance,
nuisance, and safety concerns related to a short term rental, as designated by the host.
7. "Short term rental is defined in article 7 of this chapter."
8. "Transient occupancy" of a short term rental means occupancy which has the following
characteristics:
a. The period of occupancy is less than 28 consecutive days, and
b. The person(s) occupying the short term rental renter has a primary principal
residence other than the short term rental.
D. Short term rental classifications. Short terms rentals are classified as:
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1. Type-1: A short term rental of one or more bedrooms in an owner-occupied dwelling a
host’s primary residence while the host owner is occupying the same dwelling unit for the
entire short term rental period.
2. Type-2: A Type-2 short term rental is the short term rental of a dwelling unit if the host is
not occupying the dwelling unit during the entire short term rental period. Type 2 short
term rentals include:
a. Type-2A: A short term rental of an owner-occupied a single household dwelling unit
if the host owner is not occupying the dwelling unit during the entire short term
rental period. The dwelling unit offered as a short term rental must be the host’s
primary residence, as defined herein.
b. Type-2B: A short term rental of an permitted accessory dwelling unit (ADU) on the
same lot as the host’s primary residence, or a short term rental of no more than one
additional dwelling unit in the same building as the host’s primary residence
regardless of whether or not the ADU's owner host is present in the primary dwelling
unit host’s primary residence during the short term rental period.
c. A short term rental of one dwelling unit within a duplex whether or not the duplex's
owner is present in the duplex's other dwelling unit during the rental period.
3. Type-3: A short term rental that is not owner-occupied.
E. Where allowed. An owner host may operate a short term rental in all zoning districts where
such use is authorized in chapter 38 subject to the requirements of this chapter and pursuant to
a valid and current short term rental hosting permit.
F. Compliance with laws.
1. In addition to the provisions of this chapter, the short term rental owner a host must
comply with all other applicable local, state and federal laws, including but not limited to
city parking regulations, including time limitations and ADA parking restrictions; lodging
facility use tax and accommodations sales tax regulations; health department permitting
requirements; the Americans with Disabilities Act; fair housing laws; building codes and
fire codes, and the non-discrimination provisions in chapter 24, article 10. Loss of any
required permit or license will result in revocation of the short term rental registration
hosting permit in accordance with subsection J. of this section.
2. Compliance with all applicable laws and regulations is the sole responsibility of the host
owner. City approval of an application for a short term rental hosting permit registration
in no way waives or transfers to the city such responsibility. In addition, the owner host is
solely responsible for verifying the use of a property as a short term rental is compatible
with insurance and mortgage contracts, home owners' association covenants, rental
agreements and any other contracts which govern the use of the property.
G. Administration. The director will collect all permit fees and will issue permits and renewals
thereof in the name of the city to all persons qualified under the provisions of this chapter and
has the power to:
1. Make rules. The director will promulgate and enforce all reasonable rules and regulations
necessary to the operation and enforcement of this section, including, but not limited to,
providing alternative means to comply with hosting platform reporting requirements of
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Page 6 of 17
38.360.260.J.2. by maintaining an online tool accessible to the city that includes all
required data. All rules are subject to city commission review and modification.
2. Adopt forms. The director will adopt all forms and prescribe the information to be given
therein.
3. Obtain approvals. The director will submit all applications to interested city officials for
their approval as to compliance by the applicant with all city regulations which they have
the duty of enforcing.
4. Investigate. The director will investigate and determine the eligibility of any applicant for
a short term rental permit as prescribed herein.
5. Examine records. The director may examine the books and records of any host applicant
when reasonably necessary to the administration and enforcement of this section. The city
may issue administrative subpoenas as necessary to obtain information regarding a short
term rental or booking transaction.
6. Give notice. The director shall notify any applicant of the acceptance or rejection of the
application and will, upon the director's refusal of any permit and at the applicant's
request, state in writing the reasons for the denial and deliver it to the applicant.
7. Record keeping. The director will maintain at all times a record of permitted short term
rentals, including the full name of each host permittee, the address at which such short
term rental is operated, the date of issuance, the fee paid therefor, the telephone and
address of the host applicant, and the time such permit will continue in effect.
H. Hosting Permits. The following requirements apply to all short term rentals hosting permits
unless otherwise noted.
1. General. It is unlawful for any person to operate within the city a short term rental
without having first obtained approval for a short term rental hosting permit with the
department of community development. A separate permit shall be required for each
short term rental. Approval of a short term rental application results in the city issuing a
permit for the short term rental.
2. Application; submittal materials. The applicant must complete and submit an application
for a short term rental hosting permit to the department of community development using
a form provided by the city. The form will include an acknowledgement and agreement
the short term rental meets and will continue to meet the definition of short term rental
classification (Type-1, Type-2A, or Type-2B3) during the permit term. Before the
application will be accepted by the director, the applicant must provide:
a. The name, telephone number, address, and email address of all property owners and
of the responsible person, if different. If the property owner is a business, the
name(s) and contact information of all business owners must be provided.
b. The Montana Department of Revenue tax registration number for the short term
rental.
c. A sketch plan with a description of the short term rental, including street address,
number of bedrooms, and number of off-street parking spaces available for guests'
use.
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Page 7 of 17
d. Certification the short term rental meets and will continue to meet the definition of
short term rental classification (Type-1, Type-2A, or Type-2B3) during the
registration term.
e. For Type-2 and Type-3 short term rentals, c Certification the applicant has read, and
understood understands, and acknowledges the standards in subsection I. of this
section, and the property applied for meets the standards is the applicant’s primary
residence, and the applicant has the legal right to offer the dwelling unit for use as a
short term rental.
f. For Type-2 short term rentals in residential zoning districts, certification that
residents adjacent to the proposed short term rental have been provided written
notice in accordance with subsection 6. of this subsection.
fg. All hosting platforms on which the short term rental is listed.
gh. The permit fee and fire inspection fee.
3. Safety inspections.
a. Initial inspection. Prior to issuance of the first short term rental hosting permit for
any property, an inspection by the city fire department must be completed and
signed off by a city fire inspector, or by an NFPA or ICC-certified fire inspector
using an inspection form approved by the city fire marshal. A fire inspection
checklist form will be provided to the applicant with the application materials. If a
short term rental hosting permit lapses for any period of time, upon reapplication for
a permit an inspection must be completed and signed off as described in this
subsection before the short term rental hosting permit will be issued.
b. Re-inspection. If re-inspection or multiple visits by a fire inspector are required
before the inspection form may be signed, an additional inspection fee will apply for
each inspection after the initial inspection.
c. Subsequent inspections; self-certification. A short term rental must be inspected by
the city fire department every three years. The host applicant must self-certify
continued compliance with each item on a fire inspection checklist upon annual
renewal of a permit for each year that an inspection is not required. The city fire
marshal may require a repeat inspection at any time upon complaint or evidence of
noncompliance.
4. Safety hazards. The host short term rental owner acknowledges that the city, or any
authorized representative thereof, have the right to suspend operation of any short term
rental when the city determines the short term rental is causing or contributing to an
imminent public health or safety hazard.
5. Fees. Short term rental hosting permit and inspection fees shall be established by
resolution of the city commission.
6. Issuance of permit. Once the applicant submits the completed application form, all
required submittal materials, and registration and inspection fees, the director will review
the application form and submittal materials and determine whether the short term rental
meets all city requirements for permit. The director may issue the short term rental
hosting permit when:
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Page 8 of 17
a. The director determines the short term rental meets all city requirements for a
permit; and
b. The applicant has provided either a signed pre-operational inspection report from the
health department indicating the short term rental may operate as a public
accommodation or a valid and current public accommodation license issued by the
state of Montana department of health and human services pursuant to MCA Title
50, Chapter 51.
7. Display of short term rental hosting permit registration number. The host owner must
include the short term rental hosting permit number issued by the city in all listings and
advertisements, of the host’s owner's short term rental on any hosting platform and print
advertising.
8. Change in status of host ownership. A short term rental hosting permit does not run with
the land, and a change in ownership primary residence status of the short term rental host
terminates the permit. In order for the dwelling unit to remain eligible for use as a short
term rental after a host no longer uses the dwelling unit as their primary residence, a new
application identifying a new host as primary resident must be submitted to the city.
9. Expiration. Permits issued pursuant to this section are valid for one year from the month
in which such permit is issued and will expire automatically unless renewed in
accordance with this section.
10. Renewal. The host registrant may apply to renew the permit annually using a form
provided by the city. Renewals must comply with the requirements of this Code which
are in place at the time of renewal. Failure of an applicant host to renew a permit results
in the termination of the lawful use of a property as a short term rental. It is the host’s
permitee's responsibility to renew the short term rental hosting permit prior to the
expiration of the permit. Failure of an applicant a host to renew a short term rental
hosting permit prior to the expiration of the current permit period requires the host
applicant to file a new permit application for a short term rental hosting permit and is
subject to the initial inspection and fee.
I. Short term rental standards. The following requirements apply only to Type-2 and Type-3
short term rentals unless otherwise noted.
1. Short term rental agreement; written rules for guests. The short term rental owner must
enter into a written rental agreement with the guest for each stay in the short term rental.
a. The guest must be provided with a written list of rules applicable to the short term
rental with the rental agreement, and the rental agreement must include a written
acknowledgement by the guests renters of their agreement to comply with such
rules.
b. The list of rules must include those rules required by this section to be included.
c. The list of rules must be prominently displayed within the short term rental.
2. Responsible person. The host short term rental owner must designate a person responsible
for addressing all maintenance, nuisance, and safety concerns related to a short term
rental. The responsible person must be available to take and respond to reports of
concerns and complaints 24 hours per day, seven days per week during the registration
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Page 9 of 17
term of the short term rental hosting permit. The name and contact information for the
responsible person must be included in the list of rules.
3. Maximum occupancy for Type-2 and Type-3 short term rentals. The maximum
occupancy of a Type-2 or Type-3 short term rental is two persons per bedroom plus two
additional persons, except that this number may be reduced by the city based on available
parking spaces. The maximum occupancy will be noted on the short term rental hosting
permit registration and must be included in the list of short term rental rules.
4. Maximum number of bedrooms that may be rented in a Type-1 short term rental;
maximum occupancy. The owner of a Type-1 short term rental may rent or offer for rent
up to two bedrooms in the dwelling, except that in a two-bedroom dwelling, only one
bedroom may be rented or offered for rent. No other area of the dwelling may be rented
or offered for rent. The maximum occupancy of a Type-1 short term rental is two persons
per bedroom.
5. Trash removal. The responsible person must ensure proper disposal of solid waste
pursuant to local and state rules, regulations and laws. The schedule for trash and
recycling collection and instructions for proper disposal must be included within the short
term rental rules.
6. Signage. Exterior signs identifying the unit as a short term rental are prohibited. During a
rental period, there must be a sign posted inside the front door of the short term rental
showing the locations of all fire extinguishers in the unit, the gas shut-off valve, and fire
exits.
7. Noise and nuisance.
a. The host owner of the short term rental must ensure that use of the short term rental
by guests is in compliance with the noise provisions of chapter 16, article 6 and all
nuisance provisions of this Code.
b. A prohibition against making loud noise in such a manner as to disturb the quiet,
comfort or repose of a reasonable person of normal sensitivity must be included in
the short term rental rules.
c. All outdoor activities producing noise discernible from a neighboring property shall
cease by 10:00 p.m. This requirement must be included in the short term rental rules.
J. Hosting platforms obligations.
1. Compliance with laws. In addition to the provisions of this section, a hosting platform
must comply with all other applicable local, state and federal laws.
2. Reporting requirements. A hosting platform must provide a report to the city on a
quarterly basis that includes, but is not limited to the following:
a. The address of each short term rental located in the city for which it conducts a
booking transaction;
b. The name of any host owner or responsible person for each transient occupancy for
which the hosting platform conducted a booking transaction.
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Page 10 of 17
3. Required information for booking transaction. A hosting platform must include the city
permit number in all hosting platforms' publicly available listings prior to performing a
booking transaction for each short term rental within the city.
4. Obligation to remove listings. If the hosting platform has reason to believe a short term
rental is in violation of any provision of this Code, including but not limited to notice
from the city of a violation or an owner's a host’s failure to supply to the hosting platform
the city permit number for the short term rental, the hosting platform must remove the
listing from its hosting platform within ten business days.
K. Violations; enforcement.
1. Registration suspension or revocation. The director may suspend or revoke a short term
rental hosting permit, impose administrative remedies as provided herein, or enforce a
suspension or revocation through a civil action when the host permittee commits one or
more of the following acts or omissions:
a. Failure to comply with any provision of this Code;
b. Operating or allowing the operation of the short term rental in such a manner as to
create a public nuisance, cause a breach of the peace, constitute a danger to the
public health, safety, welfare or morals, or interfere with the rights of abutting
property owners;
c. Cancellation of the health department's public accommodation license, tax authority
registration, or any other required permit; or
d. The securing of the permit by fraud or misrepresentation, including but not limited
to supplying false or incorrect information on the permit application.
2. Procedure. Should the director decide to suspend or revoke a hosting permit, the host
permittee will be given notice and an opportunity to respond following the procedures in
this subsection, except that should the director determine the short term rental or its
operation present a safety hazard or require immediate remedy, the director may order
operation of the short term rental to cease immediately.
a. The host permittee will be notified in writing by the director at least seven days prior
to the action contemplated and the reasons therefore.
b. Upon receipt of the notice, the host permittee may request a meeting with the
director. Such request must be in writing and must be received by the director within
seven days of the host’s permittee's receipt of the notice. Failure on the part of the
permittee to request in writing a meeting and within the specified time period shall
be a waiver of the host’s permittee's right to a meeting.
c. If a meeting is requested by the host permittee, the director will set a time, date and
place and will so notify the host permittee, in writing.
d. When a meeting is conducted, the city will present the evidence supporting the
contemplated action. The director may request evidence be presented by other
parties. The host permittee may present evidence. The director will take all evidence
admitted under advisement and once a decision has been made the director will
notify the host permittee of the findings and decision in writing.
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Page 11 of 17
3. Civil penalty. The director may recover the following civil penalties for any violation of
this section. Each day a violation continues constitutes a separate violation.
a. For any violation by a host an owner, the director may recover a civil penalty of not
more than $500.00.
b. For any violation by a hosting platform, the director may recover a civil penalty of
not more than $500.00.
4. Appeal. An aggrieved person may file an application to appeal the matter to the city
commission according to the procedures in section 38.250.030.
5. Unpaid fee constitutes debt. The amount of any unpaid fee, the payment of which is
required hereunder, constitutes a debt due the city.
6. Violation constitutes a misdemeanor. In addition to suspension or revocation under
subsection A. of this section, or the imposition of a civil penalty as provided herein, a
knowing violation of this article constitutes a misdemeanor punishable as described in
section 38.200.160 except a person may not be imprisoned for a violation of this section.
Section 3
That section 38.310.030. Authorized uses—Residential zoning districts be amended as follows:
Table 38.310.030.B
Permitted accessory and non-residential uses in residential zoning districts
Table clarifications:
1. Uses: P = Principal uses; S = Special uses; A = Accessory uses; — = Uses which are not permitted.
2. If a * appears after the use, then the use is defined in article 7.
3. Where a code section is referenced after the use, then the use is subject to the additional standards specific to the
subject use in that code section.
4. If a number appears in the box, then the use may be allowed subject to development condition(s) described in the
footnotes immediately following the table.
Uses Zoning Districts
R-S R-1 R-2 R-3 R-4 R-5 R-O1 RMH
Accessory uses
Essential services
Type I*
A A A A A A A A
Guest house* A A A A A A A —
Home-based
businesses
(38.360.150)*
A/S A/S A/S A/S A/S A/S A/S A/S
Other buildings and
structures typically
accessory to
authorized uses
A A A A A A A A
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Page 12 of 17
Private or jointly
owned recreational
facilities
A A A A A A A A
Signs*, subject to
article 5 of this
chapter
A A A A A A A A
Temporary buildings
and yards incidental
to construction work
A A A A A A A A
Temporary sales and
office buildings
A A A A A A A A
Non-residential uses
Agricultural uses*
on 2.5 acres or more
(38.360.270)
P — — — — — — —
Agricultural uses* on
less than 2.5 acres
(38.360.270)
S — — — — — — —
Bed and breakfast* S S S S P P P —
Commercial stable
(38.360.230)
S — — — — — — —
Community centers* S S S S S S P S
Day care centers* S S S P P P P S
Essential services
Type II*
P P P P P P P P
Essential services
Type III*2
S S S S S S S S
Short Term Rental
(Type 1)*
P A PA PA PA PA PA PA —
Short Term Rental
(Type 2)*
— — P A P A P A P A P A —
Short Term Rental
(Type 3)*
— — — — — — — —
General service
establishment*
— — — — — — P5 —
Golf courses S S — — — — — —
Offices* — — — — S3 S3 P —
Public and private
parks
P P P P P P P P
Medical offices,
clinics, and centers*
— — — — S S3 P —
Recreational vehicle
parks (38.360.210)*
S — — — — — — P
Restaurant* — — — — — P4 P5, 6 —
Retail* — — — — — P4 P5, 6 —
Veterinary uses S — — — — — — —
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Page 13 of 17
Notes:
1. The primary use of a lot, as measured by building area, permitted in the R-O district is determined by the
underlying growth policy land use designation. Where the district lies over a residential growth policy
designation the primary use shall be non-office uses; where the district lies over a non-residential
designation the primary use shall be office and other non-residential uses. Primary use shall be measured by
percentage of building floor area.
2. Only allowed when service may not be provided from an alternative site or a less intensive installation or
set of installations.
3. Only when in conjunction with dwellings.
4. Subject uses are limited to 2,500 square feet of gross floor area and only allowed on street corner sites
within a mixed-use building featuring residential units next to and/or above subject uses.
5. Subject uses are limited to 1,500 square feet of gross floor area per individual tenant.
6. These uses may not include drive-through facilities.
Section 4
That section 38.310.040 be amended as follows:
Table 38.310.040.B
Permitted services and temporary lodging uses in commercial, mixed-use, and industrial zoning districts
Table clarifications:
1. Uses: P = Principal uses; S = Special uses; A = Accessory uses; — = Uses which are not permitted.
2. If a * appears after the use, then the use is defined in article 7.
3. Where a code section is referenced after the use, then the use is subject to the additional standards in that code
section.
4. If a number appears in the box, then the use may be allowed subject to development condition(s) described in the
footnotes immediately following the table. If there are multiple numbers, then the use is subject to all applicable
development conditions.
5. Where a number with a "sf" reference appears below a P or S in the box, it means that the use is permitted or
conditionally permitted up to the (maximum) listed square footage in gross building area.
Uses Zoning Districts
Commercial Mixed Use Industrial PLI
B
-
11
B-2 B-2M B-3 UMU
(38.310.050)
REMU
(38.310.060)
NEHMU2 BP M-1 M-2
Personal and general service
Animal
shelters
— — — — — — S — S S —
Automobile
washing
establishment*
— P P P S S P — P P —
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Page 14 of 17
Daycare—
Family, group,
or center*
P P P P3 P P P/A4 P/A
4
S/A
4
S/A4 P
General
service
establishment*
P P P P P P P P P S —
Health and
exercise
establishments
*
P P P P P P P S/A
4
P P —
Heavy service
establishment*
— P P S P S P — P P —
Medical and
dental offices,
clinics and
centers*
P P P P3 P P P P P P —
Mortuary — S S S S — — — — — —
Offices* P P P P3 P P P P5 P P —
Personal and
convenience
services*
P P P P P P A A A A —
Truck repair,
washing, and
fueling
services
— — — — — — S — S P —
Temporary lodging
Bed and
breakfast*
— — — — — P S — — — —
Short Term
Rental (Type
1)*
— PA P A P A P A P A P A — — — —
Short Term
Rental (Type
2)*
— P A P A P A P A P A P A — — — —
Short Term
Rental (Type
3)*
— P P P P P — — — — —
Hotel or motel* — P P P P P
40,000sf
P — P P —
Notes:
1. In the B-1 district, the footprint of individual buildings must not exceed 5,000 square feet.
2. Authorized uses in the NEHMU district include those uses allowed in the R-2 district (see table 38.310.030 for those not listed in this
table).
26
Page 15 of 17
3. Use not allowed on the ground floor of buildings in the downtown core (those properties along Main Street from Grand Avenue to
Rouse Avenue and from the alley one-half block north of Main Street to the alley one-half block south of Main Street) unless visitor
access is available from an alley and another use not subject to this footnote is present to a minimum depth of 20 feet from the front
building façade adjacent to a street.
4. If primarily offering services to a single business or group of businesses within the same building or building complex.
5. Professional and business offices only.
Section 5
That section 38.700.050. – D definitions be amended as follows:
Dwelling. A building, or portion thereof, meeting the requirements of the city’s adopted
International Building Code and used by one household, as defined by this article, for residential
purposes. Dwellings may exist in many configurations, including single-household, two-
household, multiple-household dwellings and group homes. Dwellings do not include hotels, or
motels, Type-3 short term rentals as defined in section 38.360.260.
Section 6
That section 38.700.170. – S definitions be amended as follows:
Short Term Rental. A vacation home, tourist home as defined in MCA 50-51-102, a dwelling
as defined in section 38.700.050, accessory dwelling unit, or room within a vacation home or
dwelling, which is rented by or on behalf of the owner to the general public for compensation
for transient occupancy as provided for in section 38.360.260.
Section 7
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are, and the same 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 8
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 9
Severability.
27
Page 16 of 17
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 10
Codification.
This Ordinance shall be codified as indicated in Sections 2 through 6.
Section 11
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 , 20 .
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
, 20 . The effective date of this ordinance is , , 20 .
CYNTHIA L. ANDRUS
Mayor
ATTEST:
28
Ordinance No. 2149, (Generally Revise Regulations of Short Term Rentals)
Ordinance 2149
Page 17 of 17
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
GREG SULLIVAN
City Attorney
29
Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:2023 Economic and Market Update Discussion
MEETING DATE:November 1, 2023
AGENDA ITEM TYPE:Administration
RECOMMENDATION:Discuss Economic and Planning System's 2023 Economic and 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:The City of Bozeman invests in a yearly market and economic report to help
the City and its partners make data driven decisions. This will be a review of
the 2023 report.
UNRESOLVED ISSUES:None.
ALTERNATIVES:None.
FISCAL EFFECTS:None.
Attachments:
233070_Bozeman 2023Q2 Market Update.pdf
Report compiled on: October 27, 2023
30
Economic & Planning Systems, Inc.
The Economics of Land Use
Prepared by:Prepared for:
City of Bozeman, MT Economic Development Department
Report
Bozeman
2023 Economic
and Market Update
October 2023 EPS #233070
31
ii Bozeman 2023 Economic and Market Update
Table of Contents
2
3
4
1 City Snapshot and Summary 1
City Snapshot 1
Economy 7
Economic Trends 7
Wages 10
Economic Drivers 12
Commercial Real Estate 13
Office Market Trends 13
Industrial/Flex Market 17
Retail Market 20
Housing 25
Construction 25
Housing Prices 26
Apartment Market 27
Affordability 30
Housing Demand 32
32
Economic & Planning Systems, Inc iii
Table of Contents
TablesFiguresTable 1 Population and Housing Units, 2010-2023 2
Table 2 MSU Enrollment, 2001-2022 3
Table 3 Peer City Summary 6
Table 4 Job and Wage Growth, Top Sectors, Gallatin County, 2017-2022 10
Table 5 Changes in Jobs and Wages for Key Sectors, Gallatin County, 2019-2022 10
Table 6 Population 25+ by Educational Attainment, Bozeman, 2022 12
Table 7 Office Summary , 2010-2023 Q2 14
Table 8 Recent Office Development, Bozeman 15
Table 9 Industrial Summary, Gallatin County, 2010-2021 17
Table 10 Recent Industrial/Flex Projects, Bozeman 18
Table 11 Retail Summary, 2010-2023 Q2 20
Table 12 Recent Retail Projects, Bozeman 21
Table 13 Bozeman Building Permit Unit Trends 25
Table 14 Home Price Trends, 2016-2023 Q2 26
Table 15 Multifamily Summary, 2010-2023 Q2 27
Table 16 Recent Multifamily Development, Bozeman 29
Table 17 Required Annual Income to Afford Median Home Price, 2016-2023 30
Table 18 Bozeman Housing Demand Projection 32
Table 19 Bozeman Housing Unit Projection 32
Figure 1 Gallatin Valley Region 2
Figure 2 Private Wage and Salary Employment, Bozeman and Gallatin County, 2022 7
Figure 3 Private Employment Growth, Bozeman and Gallatin County, 2017-2022 8
Figure 4 Annual Change in Private Employment, 2017-2022 8
Figure 5 Unemployment Rate, 2010-2023 9
Figure 6 Change in Employment by Wage Quartile, Gallatin County, 2017-2022 11
Figure 7 Office Deliveries, 2010-2023 Q2 14
Figure 8 Industrial Deliveries, 2010-2023 Q2 18
Figure 9 Retail Deliveries, 2010-2023 Q2 21
Figure 10 Multifamily Deliveries, 2010-2023 Q2 28
Figure 11 Income Gap to Afford Median Priced Home, Bozeman, 2016 31
Figure 12 Income Gap to Afford Median Priced Home, Bozeman, 2023 31
33
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
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 2023 report is part of a series of annual updates to track market conditions in
the city and county
City Snapshot
Bozeman, situated within Gallatin County (pop 128,966), has a population of roughly
59,000 residents (Table 1) Bozeman stands out with a diverse economy, a highly educated
workforce, and exceptional quality of life—a combination not often found in small cities
Montana State University (MSU) is an anchor in the community and a strong research
institution with almost 17,000 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 median home price is currently $767,500 up from $755,000 in
2022
Bozeman is one of
the fastest growing
cities in the U S
Between 2010
and 2023, the City
added an estimated
22,400 residents,
which translates to
a growth rate of 1,721
new residents per
year or an annual
growth rate of 3 8
percent (Table 1)
Bozeman has also
added an average of
1,100 housing units
annually since 2018
1. City Snapshot and Summary
Economic & Planning Systems, Inc 1
34
Table 1. Population and Housing Units, 2010-2023
2010-2023
Description 2010 2015 2020 2023 Total Ann. #Ann. %
Population
Bozeman 36,440 40,319 53,293 58,814 22,374 1,721 3.8%
Belgrade 7,281 7,738 10,460 11, 314 4,033 310 3.4%
Manhattan 1,396 1,191 2,086 2,167 771 59 3.4%
Other/Uninc.44,541 51,491 53,121 56,671 12,130 933 1.9%
Gallatin County 89,658 100,739 118,960 128,966 39,308 3,024 2.8%
Bozeman % of County Pop.40.6%40.0%44.8%45.6%56.9%
Housing Units
Bozeman 16,761 18,293 23,535 26,189 9,428 725 3.5%
Belgrade 3,154 3,308 4,339 4,714 1,560 120 3.1%
Manhattan 574 653 872 914 340 26 3.6%
Other/Uninc.20,841 23,715 24,089 25,678 4,837 372 1.6%
Gallatin County 41,330 45,969 52,835 57,495 16,165 1,243 2.6%
Bozeman % of County (HU)40.6%39.8%44.5%45.6%58.3%
Source: US Census; ESRI Business Analyst; Economic & Planning Systems
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)
Figure 1. Gallatin Valley Region
2 Bozeman 2023 Economic and Market Update
35
The Bozeman economy has eight key segments that distinguish it from other mid-sized
cities and recreation or resort-oriented mountain communities:
•Higher Education – In 2022, Montana State University (MSU) had 16,688 students
enrolled and 4,250 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, 2001-2022
2001-2022
Enrollment Trends 2001 2010 2015 2020 2021 2022 Total Ann. %
Undergraduate 10,538 11, 579 13,707 14,240 14,668 14,631 4,093 1.6%
Graduate 1,208 1,986 1,981 2,009 2,173 2,057 849 2.6%
Total 11,746 13,565 15,688 16,249 16,841 16,688 4,942 1.7%
Source: Montana State University; Economic & Planning Systems
•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 Bozeman Yellowstone International
Airport (BZN) is a major tourism (and business) driver with over 2 2 million passengers
in 2022 Many of the 1 6 million visitors entering Yellowstone National Park at West
Yellowstone pass through BZN and Bozeman, making this region an international
destination During the busy seasons, one can hear several foreign languages spoken
on the streets and in restaurants in Bozeman
•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 medical offices
clustered around the hospital and located throughout Bozeman
•Technology – Bozeman is a hub for technology and research and development
companies that have both started in or moved to Montana Major employers
range from companies focusing on software development to photonics R&D and
manufacturing Photonics and optical technology are an important technological
cluster, as are technology firms such as Oracle, Workiva, Aurora, Hyundai, Zoot
Enterprises, and numerous startups The new MonArk Quantum Foundry, a
partnership between MSU and the University of Arkansas, is advancing quantum
technologies (using the quantum states of subatomic particles in computing) It is
funded with more than $20 million in grants through a program designed to make the
United States a leader in the next quantum revolution as part of the National Science
Foundation’s “10 Big Ideas”
•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
Economic & Planning Systems, Inc 3
36
•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
•Creative Arts – The City has many businesses that provide goods and services based
on intellectual property and individual creativity These businesses include publishing,
film, TV, media, design, technology, performing arts, and museums and galleries
•Montana State University Innovation Campus – The MSUIC hosts the only SCIF
(Secure Compartmental Information Facility) in the State of Montana and facilitates
classified research for both government agencies and the private sector
BZN Airport
In 2022, Bozeman Yellowstone International Airport (BZN) handled a record-breaking
2,264,424 passengers, marking a 16 7% increase from the previous year’s record of
1,940,191 BZN served as the choice for over 40% of air travelers to or from Montana in 2022,
solidifying its role as a crucial transportation hub in the state
BZN also supports the tourism and recreation economy of the region, including
numerous guide services and Big Sky and Bridger Bowl ski areas BZN has direct flights to
numerous metropolitan areas
4 Bozeman 2023 Economic and Market Update
37
Comparison Cities
In Table 3, Bozeman is compared to several other western cities with similar
characteristics including Missoula, MT; Fort Collins, CO; Boulder, CO; Bend, OR; and
Billings, MT Bozeman is a young city with a median age of 28 2 Like Boulder and Fort
Collins, the age is influenced by the presence of a large university
Bozeman is one of the highest income cities in Montana, with a median household
income among homeowners of just under $98,495 compared to $80,420 in Billings
and $86,284 in Missoula (host city of the University of Montana) The income among
homeowners is the most relevant comparison here because the overall median
household income in communities with a large college or university is often skewed lower
by the large student population (often renters), as the data show
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 from 2017 through 2022 among the peer communities included health
care, professional and technical services, and construction
In each community, the number of students as a percentage of population is significant
In Bozeman, students equate to an estimated 28 4 percent of the population similar
to Boulder and Bend In Fort Collins, the largest of the comparison cities, the student
population equates to about 17 percent of the population The large student population
has an impact on the rental housing supply and Bozeman is interested in additional
multifamily and student housing
Economic & Planning Systems, Inc 5
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Table 3. Peer City Summary
Description
Bozeman,
MT
Billings,
MT
Missoula,
MT
Fort Collins,
CO
Boulder,
CO
Bend,
OR
Demographics
Population 58,814 115,689 73,300 166,788 104,930 97,042
Median Age 28.2 37.6 33.6 30.0 28.9 38.8
% Renter Households 55.4%35.5%53.5%47.0%52.3%37.7%
Median Household Income
Owner $98,495 $80,420 $86,284 $107,459 $130,314 $90,683
Renter $49,543 $38,725 $36,854 $47,690 $43,834 $57,135
All Households $67,354 $63,608 $54,423 $72,932 $74,902 $74,253
Employment1
# of Jobs (2022)58,482 76,410 53,277 134,929 164,074 78,982
Top 3 Sectors
#1 Retail Health Care Health Care Retail Prof. and
Tech. Svcs.Health Care
#2 Hotel/
Restaurant Retail Retail Hotel/
Restaurant Manufacturing Retail
#3 Construction Hotel/
Restaurant
Hotel/
Restaurant Health Care Health Care Hotel/
Restaurant
Top 3 Growth Sectors (‘17-’22)
#1 Construction Construction Prof. and Tech.
Svcs.
Prof. and Tech.
Svcs.
Prof. and Tech.
Svcs.Health Care
#2 Hotel/
Restaurant Health Care Construction Health Care Manufacturing Construction
#3 Retail Finance Manufacturing Manufacturing Information Prof. and
Tech. Svcs.
Higher Education
Major Colleges/Universities
Montana
State
University
Montana
State
University
University of
Montana
Colorado
State
University
University of
Colorado
Oregon State
University -
Cascades
Enrollment (Fall 2022)16,688 4,057 9,955 27,956 36,122 1,271
% of Total Population 28.4%3.5%13.6%16.8%34.4%1.3%
Source: U.S. Census ACS 2021 5-year, QCEW, Economic & Planning Systems
1 Employment data is at the county level
6 Bozeman 2023 Economic and Market Update
39
Economic Trends
Bozeman and Gallatin County have
a diverse economy driven by key
segments that distinguish it from other
midsize cities While retail trade and hotels
and restaurants are large sectors, Bozeman
and Gallatin County also have significant
numbers of jobs in construction, health
care, professional and technical services,
manufacturing, finance and insurance,
and business services (admin /waste
mgt services) The largest employers in
the city, each with over 1,000 employees,
include Montana State University and
Bozeman Health Deaconess Regional
Medical Center As of 2022 there were
approximately 69,632 private wage and salary jobs in the county and at least 98,000 total
jobs including proprietors and government (including MSU) Over half of the jobs in the
county are within the City of Bozeman A key industry cluster in Bozeman is photonics
with over 1,000 workers spanning multiple industries (approximately 0 3 percent of the
U S photonics jobs1)
1 https://www.montanaphotonics.org/
Figure 2. Private Wage and Salary Employment, Bozeman and Gallatin County, 2022
9,101
8,925
6,956
6,901
5,272
3,972
2,651
2,543
2,137
1,891
1,862
1,728
1,452
938
809
721
262
6,062
5,452
2,309
5,625
3,086
1,749
1,049
1,637
764
1,304
677
500
514
526
110
455
237
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
Retail
Hotel/ Restaurant
Construction
Health Care
Prof. & Tech. Services
Manufacturing
Admin/ Waste Mgmt
Other
Wholesale Trade
Finance
Arts/ Rec
Real Estate
Transportation
Education
Ag./ Forest/ Hunting
Information
Management
Total Jobs
Private Wage and Salary Employment, Bozeman and Gallatin County, 2022
Gallatin Bozeman
Source: Montana DLI, BLS QCEW, Economic& Planning Systems
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Data\[233070 -Employment.xlsx]C -Emp
2. Economy
Economic & Planning Systems, Inc 7
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Between 2017 and 2022, Gallatin County added 10,191 private wage and salary jobs (3 9
percent per year), with Bozeman capturing approximately 45 percent of the growth
Employment growth was driven by Construction, Hotels and Restaurants, and Retail
(Figure 3) Construction jobs, which are largely cyclical, experienced the highest amount
of job growth in the county In Bozeman, construction was outpaced by job growth in
hotels and restaurants, professional and technical services, and health care
Figure 3. Private Employment Growth, Bozeman and Gallatin County, 2017-2022
1,381
1,234
1,197
1,102
1,008
657
630
549
494
409
391
321
271
184
159
102
609
769
463
693
678
191
-7
327
139
3
213
295
51
73
7
83
-100 100 300 500 700 900 1,100 1,300 1,500
Construction
Hotel/ Restaurant
Retail
Health Care
Prof. & Tech. Services
Admin/ Waste Mgmt
Real Estate
Manufacturing
Arts/ Rec
Wholesale Trade
Finance
Other
Ag./ Forest/ Hunting
Education
Transportation
Information
Total Jobs
Private Employment Growth, Bozeman and Gallatin County, 2017 -2022
Gallatin Bozeman
Source: Montana DLI, BLS QCEW, Economic& Planning Systems
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Data\[233070 -Employment.xlsx]C -Emp Growth
Bozeman and Gallatin County experienced only minor job impacts from the COVID-19
pandemic From 2019-2020, the data recorded a small increase in jobs in the county as
a whole, and a loss of about 1,500 jobs in Bozeman (Figure 4) There has been a strong
recovery since the pandemic with Gallatin County adding more than 4,500 jobs in 2021,
over half of which were within Bozeman Job growth continued to be strong into 2022
Figure 4. Annual Change in Private Employment, 2017-2022
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
2017-18 2018-19 2019-20 2020-21 2021-22
Change inEmployment
Annual Change in Private Employment, 2017-2022
Gallatin Bozeman
Source: QCEW, Montana DLI, Economic& Planning Systems
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Data\[233070 -Employment.xlsx]C-Yearly Emp Growth
8 Bozeman 2023 Economic and Market Update
41
Since peaking in 2020 due to COVID-19, unemployment rates in Bozeman and Gallatin
County sharply dipped in 2021 and continued to reduce at a lower rate in 2022, mirroring
statewide trends in Montana In May 2023, both Bozeman and Gallatin County had
unemployment rates of 1 9 percent
Figure 5. Unemployment Rate, 2010-2023
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 2022 2023
YTD
Unemployment Rate
Unemployment Rate, 2010-2023
Montana Gallatin Bozeman
Source: BLS LAUS; Economic & Planning Systems
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Data\[233070 -Employment.xlsx]C-Unemployment Rate
GALLATIN COUNTY TOP PRIVATE EMPLOYERS, 2022
DESCRIPTION
INDUSTRY/
EMPLOYMENT TYPE
NUMBER OF
EMPLOYEES
Albertsons Retail Trade 100 to 249
Bozeman Health Regional Medical Center Health Care 1,000 and over
Bozeman Health Medical Group Health Care 100 to 249
Bridger Bowl Ski Resort 100 to 249
Community Food Co-Op Retail Trade 100 to 249
Costco Retail Trade 100 to 249
Gibson Guitars Manufacturing 100 to 249
Glacier Bancorp Finance/ Insurance 100 to 249
Kenyon Noble Lumber & Hardware Retail Trade 250 to 499
Lone Mountain Land Company Construction 100 to 249
Montage Big Sky Hotel/ Restaurant 100 to 249
Murdoch's Ranch & Home Supply Retail Trade 100 to 249
Oracle America Technology 250 to 499
Ressler Motors Retail Trade 100 to 249
Target Retail Trade 100 to 249
Town & Country Foods Retail Trade 100 to 249
Town Pump Retail Trade 250 to 499
Wal Mart Retail Trade 250 to 499
Williams Plumbing & Heating Construction 100 to 249
Zoot Enterprises Technology 100 to 249
Source: Montana Department of Labor and Employment, Economic & Planning Systems
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Wages
The region continues to experience strong wage growth Average annual wages in Gallatin
County increased at a rate of 7 percent per year between 2017 and 2022 (Table 4 and
Table 5) The construction industry added more that 1,300 jobs, while the average wages
within the Administrative and Support and Waste Management and Remediation
Services and the Accommodation and Food Services industries grew at 8 5% and 8 3%
annually Wages in technology and professional service jobs grew by 6 1 percent per year
Table 4. Job and Wage Growth, Top Sectors, Gallatin County, 2017-2022
2017-2022 Job
Growth
2017 Avg.
Wage
2022 Avg.
Wage
Annual Wage
Growth Description
All Jobs/Sectors 10,191 $41,855 $58,645 7.0%
Construction 1,381 $52,333 $71,702 6.5%
Hotel/ Restaurant 1,234 $20,505 $30,528 8.3%
Retail 1,197 $32,106 $44,516 6.8%
Health Care 1,102 $46,977 $60,672 5.2%
Prof. & Tech. Services 1,008 $72,550 $97,540 6.1%
Admin/ Waste Mgmt 657 $33,943 $50,961 8.5%
Source: Bureau of Labor Statistics QCEW; Economic & Planning Systems
Table 5. Changes in Jobs and Wages for Key Sectors, Gallatin County, 2019-2022
Employment
2017 Avg.
Wage Employment
2022 Avg.
Wage Employment
2021-2022
WagesDescription
Actual Change
All Jobs/Sectors 125 $5,485 4,730 $3,701 3,079 $3,844
Construction 318 $3,015 382 $5,287 173 $6,492
Hotel/ Restaurant -1,267 $1,671 1,328 $3,868 686 $2,331
Retail -139 $3,571 624 $3,247 287 $3,282
Health Care -26 $4,044 561 -$1,918 347 $6,528
Prof. & Tech. Services 161 $12,048 281 $770 163 $9,363
Admin/ Waste Mgmt -72 $2,921 146 $3,920 246 $8,054
Percentage Change
All Jobs/Sectors 0.2%12.0%9.3%7.2%5.6%7.0%
Construction 5.2%5.3%6.0%8.8%2.6%10.0%
Hotel/ Restaurant -15.5%7.4%19.2%15.9%8.3%8.3%
Retail -1.7%10.4%7.6%8.5%3.3%8.0%
Health Care -0.4%7.8%9.4%-3.4%5.3%12.1%
Prof. & Tech. Services 3.4%16.0%5.8%0.9%3.2%10.6%
Admin/ Waste Mgmt -3.1%8.1%6.5%10.1%10.2%18.8%
Source: Bureau of Labor Statistics QCEW; Economic & Planning Systems
10 Bozeman 2023 Economic and Market Update
43
Wage growth in the region is concentrated below about $50,000 per year (below $24
per hour) and between $60,000 and $90,000 per year ($29 to $46 per hour) from 2017
through 2022 (Figure 6) The 25th percentile of wages accounted for 34 percent of job
growth, or 3,400 jobs, with wages up to just under $50,000 per year Jobs in the 50th to
75th percentile wages comprised 36 percent of new jobs, or 3,600 new jobs In addition, 14
percent of jobs added between 2017 and 2022 were between the 75th and 100th percentile
of wages, at $96,000 to $101,000 per year ($46 to $48 per hour) The drivers of high-wage
jobs include construction, health care, and professional/technical services
Figure 6. Change in Employment by Wage Quartile, Gallatin County, 2017-2022
34%
3,430
17%1,687
36%3,624
14%1,450
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0-25% ($0-$49,530)25-50% ($49,530-$60,606)50-75% ($60,606-$96,452)75-100% ($96,452-$101,370)
Change in Employment
Change in Employment by Wage Quartile in Gallatin County, 2017 -2022
Source: BLS QCEW, Economic & Planning Systems
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Data\[233070 -Employment.xlsx]C-Wage Quartiles GC
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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 6) Only Boulder exceeds
Bozeman in this ranking, with 62 8 percent of its population having a bachelor’s degree
or higher 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 as highly
educated skilled workers have more choices and flexibility in where they choose to work
and live
Table 6. Population 25+ by Educational Attainment, Bozeman, 2022
Education Level Bozeman Billings Boulder Bend
Fort
Collins Missoula
Population 25+37,259 84,973 64,468 74,433 107,845 51,832
High School or Less, No Diploma 1.9%4.5%2.7%3.7%2.9%3.1%
High School Graduate or Equivalent 12.8%26.5%5.4%15.4%14.5%17.4%
Some College, No Degree 17.1%22.1%9.0%21.1%15.3%19.7%
Associate's Degree 5.3%9.0%4.3%10.4%8.8%8.5%
Bachelor's Degree 35.8%24.5%38.7%30.2%33.7%30.6%
Graduate/ Professional Degree 27.0%13.5%40.0%19.0%24.7%20.7%
Total 100.0%100.0%100.0%100.0%100.0%100.0%
Bachelor’s Degree or Higher 62.8%38.0%78.7%49.2%58.4%51.3%
Source: U.S. Census; ESRI Business Analyst; Economic & Planning Systems
12 Bozeman 2023 Economic and Market Update
45
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, vacancy rates, and deliveries Commercial real estate data comes
from CoStar, a subscription real estate database and market information service
Office Market Trends
From 2010 to the second quarter of 2023, total office space in Gallatin County grew by
approximately 972,000 square feet, or an average of 78,000 square feet annually This
upward trend has persisted in recent years, with roughly 153,000 square feet added to the
region since 2020 Net inventory growth is determined by subtracting the square footage
lost due to demolitions or conversions from the square footage gained through new
construction (Table 7) Bozeman is the central hub for office space with Gallatin County,
holding 72 3 percent of the entire county’s office inventory In terms of the direction of the
market, Bozeman captured 66 percent of new office construction in Gallatin County since
2010 and nearly 100 percent of the market since 2020
Bozeman average office lease rates have increased from $21 98 in 2020 to $26 35 per
square foot this year New construction rents are considerably higher in the $30 per
square foot range Over the last decade, office vacancy rates in Gallatin County and
Bozeman have consistently stayed below 4 0 percent By the close of 2022, both the city
and county reached unprecedented lows in average vacancies, recording rates of 1 7
percent and 1 4 percent, respectively Presently, vacancy rates stand at 2 8 percent for the
city and 2 7 percent for the county
Data on office
construction or
“deliveries” show more
detail on market activity
than the broader
inventory trends Since
2014, all newly developed
office space tracked
by CoStar has been
exclusively located in
Bozeman From 2010
to Q2 2023 Bozeman
delivered 620,210 square
feet of office, accounting
for roughly 66 percent of
the total office growth
in all of Gallatin County
(Figure 7)
3. Commercial Real Estate
Economic & Planning Systems, Inc 13
46
Table 7. Office Summary , 2010-2023 Q2
Description 2010 2015 2020 2021 2022 2023 Q2
Inventory
Bozeman 2,201,835 2,288,786 2,690,529 2,718,398 2,827,611 2,843,221
Gallatin County 2,963,002 3 ,117, 373 3,780,726 3,808,595 3,919,198 3,934,808
Bozeman as Pct.
of County 74.3%73.4%71.2%71.4%72.1%72.3%
Avg. Rent
Bozeman $11.76 $14.64 $21.98 $22.34 $24.58 $26.35
Gallatin County $11.75 $14.60 $20.98 $20.98 $22.30 $24.33
Avg. Vacancy
Bozeman 3.3%3.1%2.9%2.4%1.7%2.8%
Gallatin County 3.0%3.4%2.5%2.6%1.4%2.7%
Change 2010-2023 Q2 Change 2020-2023 Q2
Description Total Ann. #Ann. %Total Ann. #Ann. %
Inventory
Bozeman 641,386 51, 311 2.1%152,692 61,077 2.2%
Gallatin County 971,806 77,744 2.3%154,082 61,633 1.6%
Pct. of County 66.0%99.1%
Avg. Rent
Bozeman $14.59 $1.17 6.7%$4.38 $1.75 7.5%
Gallatin County $12.58 $1.01 6.0%$3.34 $1.34 6.1%
Source: CoStar; Economic & Planning Systems
Figure 7. Office Deliveries, 2010-2023 Q2
0
50,000
100,000
150,000
200,000
250,000
300,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Q2
sq. ft.
Office Deliveries, 2010 -Q2 2023
Bozeman Rest of Gallatin County
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
14 Bozeman 2023 Economic and Market Update
47
Some notable office and office/mixed use projects built since 2021 are listed below
(Table 8) From 2021 to Q2 2023, Bozeman has added 132,906 square feet of office space
These newer buildings have higher rents averaging $30 per square foot, which is higher
than the market average of $26 per square foot
Table 8. Recent Office Development, Bozeman
Description Address Year Built RBA
Avg Rent
per sq. ft.
Notable Deliveries
The Oz 2952 Technology Blvd W 2023 15,610 $32.60
Aspen Crossing 505 W Aspen St 2022 64,000 $35.00
DA Davidson, VA Clinic 1101 E Main St 2022 33,213 $30.00
Security Title Building 1160 29 2022 12,000 $31.00
155 Mill Town Loop Unit A 155 Mill Town Loop Unit A 2022 1,390 $29.46
1150 S 29th Ave 1150 S 29th Ave 2021 3,716 $28.87
718 W Babcock St 718 W Babcock St 2021 2,977 $29.10
Total/Average 132,906 $30.17
Source: CoStar; Economic & Planning Systems
Other notable and proposed
office and mixed-use
developments are listed and
described below
RUH Building – Situated in North
7th Midtown Urban Renewal
District, the RUH Building is a
mixed use building anchored by a
brewery on the ground floor and
16 apartments on the upper two
floors
Aurora Building – Aurora
Innovation, an autonomous vehicle
company, is building a 78,000
square foot R&D facility on the
MSU Innovation Campus It will
include advanced manufacturing
space and clean room facility
Photo Courtesy: JDS Architects
Economic & Planning Systems, Inc 15
48
Aspen Crossing – Aspen Crossing
at 505 West Aspen, a prominent
3-story development, stands out
as one of the most significant
additions to Midtown It is
currently home to Bourbon, a
BBQ restaurant and whiskey bar,
and the Ponderosa Social Club
The building also has an array
of office spaces and third floor
condominiums
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 The building broke
ground in 2022 and is expected
to be complete in 2023 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 – Advertised
as Bozeman’s most vibrant
commercial, retail, and residential
community, the Cannery District
has approximately 111,000 square
feet of office and retail space It
also includes a 52-unit market
rate apartment complex built in
2020, aptly named Cannery Flats
The Cannery District incorporates
adaptive reuse of historic
buildings and is currently home
to 25 professional and technology
companies, 13 architecture
engineering and design firms,
12 retail shops, 11 health and
wellness establishments, 8 restaurants, and 2 nonprofits
Photo Courtesy: Saul Creative
16 Bozeman 2023 Economic and Market Update
49
Industrial/Flex Market
Between 2010 and Q2 2023, industrial space in Gallatin County grew by roughly 827,000
square feet, or an average of 66,000 square feet annually (Table 9) Industrial growth
in the city has slowed dramatically, with approximately 2,500 square feet added since
2020, or nearly 1,000 square feet per year In contrast, the rest of the county added about
278,000 square feet of industrial space, indicating that Bozeman’s market share was less
than one percent of the market growth The lower land costs in areas outside of the city
are a large factor driving the growth of industrial space in other parts of Gallatin County
including Four Corners and Belgrade However, there is still a market in Bozeman for
higher value industrial uses and flex/R&D space This is especially true for companies that
are interested in leveraging Bozeman’s strategic location and benefiting from the City’s
well-developed municipal infrastructure and amenities
Since 2010, rental rates in Gallatin County have grown by 6 2 percent annually, while
Bozeman experienced a 3 3 percent growth rate As of Q2 2023, industrial rents in
Bozeman averaged $16 06 per square foot, compared to $14 63 in Gallatin County Average
industrial rents in Bozeman actually dropped slightly in Bozeman over the past two and
a half years Vacancy rates in both the city and county have remained low for the past
decade, with current vacancy rates at 3 3 percent in Bozeman and 2 0 percent in Gallatin
County These vacancy rates are up compared to the previous year due to the addition of
new industrial space, but still remain low
Table 9. Industrial Summary, Gallatin County, 2010-2021
Description 2010 2015 2020 2021 2022 2023 Q2
Inventory
Bozeman 910,616 928,526 938,810 938,810 938,810 941,304
Gallatin County 3,295,993 3,334,838 3,841,931 3,880,686 3,890,686 4,122,668
Bozeman as Pct.
of County 27.6%27.8%24.4%24.2%24.1%22.8%
Avg. Rent
Bozeman $10.67 $10.15 $17.44 $22.32 $21.14 $16.06
Gallatin County $6.88 $6.18 $12.73 $14.04 $16.90 $14.63
Avg. Vacancy
Bozeman 1.4%3.1%2.1%0.1%3.1%3.3%
Gallatin County 2.5%2.9%1.5%0.6%1.0%2.0%
Change 2010-2023 Q2 Change 2020-2023 Q2
Description Total Ann. #Ann. %Total Ann. #Ann. %
Inventory
Bozeman 30,688 2,455 0.3%2,494 998 0.1%
Gallatin County 826,675 66,134 1.8%280,737 112,295 2.9%
Pct. of County 3.7%0.9%
Avg. Rent
Bozeman $5.39 $0.43 3.3%-$1.38 -$0.55 -3.2%
Gallatin County $7.75 $0.62 6.2%$1.90 $0.76 5.7%
Source: CoStar; Economic & Planning Systems
Economic & Planning Systems, Inc 17
50
In all of Gallatin County, 914,288 square feet of industrial space were delivered since 2010
(Figure 8) Of these deliveries, 6 5 percent were located in Bozeman
Figure 8. Industrial Deliveries, 2010-2023 Q2
0
50,000
100,000
150,000
200,000
250,000
300,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Q2
sq. ft.
Industrial Deliveries, 2010 -2023 Q2
Bozeman Rest of Gallatin County
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Most of the recent industrial and flex construction in the area has been outside the city in
the Four Corners area of Gallatin County
Table 10. Recent Industrial/Flex Projects, Bozeman
Description Address Year Built RBA
Avg Rent
per sq. ft.
Notable Deliveries
Revive Salon, Aurore Bakery, Hybrid
Motion, LLC 141 Baxter Lane West 2023 34,000 $6.24
Swiss Plaza Condo 2994-3016 N 27th Ave 2023 2,494 $5.78
Honey Sour Four Corners 125 Ginger Bear Ln 2022 5,000 $6.64
Total/Average 41,494 $6.22
Source: CoStar; Economic & Planning Systems
There are three large sites in Bozeman that can support more industrial and business
park development as described on the following page
18 Bozeman 2023 Economic and Market Update
51
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 A rail siding off
the Burlington-Northern Santa Fe main rail line
was recently completed
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 All but 4 lots
have been sold
Economic & Planning Systems, Inc 19
52
Retail Market
Bozeman is the regional trade hub for Gallatin County and serves a roughly 50-mile
radius Gallatin County has an estimated 6 2 million square feet of retail inventory, 73 4
percent or 4 6 million square feet of which is located within Bozeman (Table 11) Average
retail rents are similar in both the city and county at approximately $19 00 per square foot
Retail rents grew slowly at about 2 2 percent per year, which was slower than the growth
in office rents at 6 0 percent per year Vacancy rates for retail space in Bozeman and
Gallatin County have been notably low since 2010 and are currently 1 1 percent
Table 11. Retail Summary, 2010-2023 Q2
Description 2010 2015 2020 2021 2022 2023 Q2
Inventory
Bozeman 4,149,498 4,358,021 4,481,195 4,552,195 4,583,913 4,585,599
Gallatin County 5,713,199 5,973,505 6,129,850 6,200,850 6,232,568 6,250,254
Bozeman as Pct.
of County 72.6%73.0%73.1%73.4%73.5%73.4%
Avg. Rent
Bozeman $17.57 $10.05 $20.29 $21.16 $21.32 $19.42
Gallatin County $14.63 $10.03 $20.19 $21.38 $21.23 $19.24
Avg. Vacancy
Bozeman 1.8%4.3%2.3%1.7%1.5%1.2%
Gallatin County 2.1%4.3%2.1%1.6%1.3%1.1%
Change 2010-2023 Q2 Change 2020-2023 Q2
Description Total Ann. #Ann. %Total Ann. #Ann. %
Inventory
Bozeman 436,101 34,888 0.8%104,404 41,762 0.9%
Gallatin County 537,055 42,964 0.7%120,404 48,162 0.8%
Pct. of County 81.2%86.7%
Avg. Rent
Bozeman $1.85 $0.15 0.8%-$0.88 -$0.35 -1.7%
Gallatin County $4.61 $0.37 2.2%-$0.95 -$0.38 -1.9%
Source: CoStar; Economic & Planning Systems
20 Bozeman 2023 Economic and Market Update
53
Table 12. Recent Retail Projects, Bozeman
Description Address Year Built RBA
Avg Rent
per sq. ft.
Notable Deliveries
Bozeman Shopping Center N 15th Ave 2023 22,000 $23.60
Whole Foods 2905 W Main St 2022 31,718 $24.36
WinCo Foods 2913 Max Ave 2021 75,000 ---
Total/Average 128,718 $23.98
Source: CoStar; Economic & Planning Systems
Between 2010 and Q2 2023, Bozeman delivered roughly 653,000 square feet of retail
space (Figure 9), or 54,000 square feet per year Just over 200,000 square feet of this was
in 2011 when two large car dealerships were built on S Cottonwood Bozeman continues
to have nearly 88 percent market share in new retail construction Recent new retail
projects include the first Whole Foods and a new WinCo Foods supermarket
Figure 9. Retail Deliveries, 2010-2023 Q2
0
50,000
100,000
150,000
200,000
250,000
300,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Q2
sq. ft.
Retail Deliveries, 2010-2023 Q2
Bozeman Rest of Gallatin County
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Economic & Planning Systems, Inc 21
54
Bozeman’s retail inventory is comprised of a wide variety of national grocery chains,
big box retailers, and smaller local stores There are eight full-service supermarkets in
Bozeman (including the Walmart Supercenter) plus several smaller specialty food stores
and independent grocers such as the Community Food Co-op Bozeman also has several
national general merchandise and home improvement anchor retailers including Costco,
Target, Home Depot, Lowe’s, Kohl’s, and Macy’s
BOZEMAN RETAIL INVENTORY
DESCRIPTION STORE TYPE
AVG. SQ.FT.
DESCRIPTION STORE TYPE
AVG. SQ.FT.
Supermarkets and Grocery Stores Shoppers’ Goods
Walmart 200,550 Costco 114,512
Target 107,694 Kohl's 57,045
Rosauers Food & Drug Center 60,045 Macy's 51,828
Safeway 56,117 Sportsman's Warehouse 44,018
Smith's 55,000 Hobby Lobby 41,796
Albertsons 53,746 Bob Ward's Sports & Outdoors 30,495
Whole Foods Market 31,718 Ross Dress For Less 30,130
Heebs Fresh Market 26,449 REI 25,177
Town and Country Foods 20,404 Barnes & Noble 25,000
Building Material and Garden Joann 25,000
Lowe’s 99,440 Staples 22,194
The Home Depot 95,337 T.J. Maxx 21,064
Murdoch's Ranch & Home Supply 48,904 Michaels 20,372
Ashley HomeStore 30,800 Universal Athletic 20,000
Ace Hardware 24,302 Bed Bath & Beyond 19, 711
Commercial Metals 24,275
Harbor Freight Tools 19,582
22 Bozeman 2023 Economic and Market Update
55
Notable Projects
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, including healthcare, and
entertainment SCL Health and J-Crew Factory Outlet are recent major tenants locating in
the project
Ferguson Farm is
a roughly 50-acre
commercial district
being developed on
Bozeman’s west side
at S Cottonwood
and Huffine (U S 191)
It began with the
Ikon Apartments,
a 336 unit highly
amenitized
apartment building
Phase I is anchored
by The Market, a
21,000 sq ft food hall
with several food and
beverage vendors
and specialty shops
in a common
space Phase II is an additional 31 acres of mixed use development with the potential for
approximately 850,000 square feet of development
Photo Courtesy: Bozeman Real Estate Group
Economic & Planning Systems, Inc 23
56
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57
This chapter provides an overview of the housing market in Bozeman It summarizes
building permit trends, home prices, the rental market, and key affordability indicators
Construction
Between 2018 and 2023 the City of Bozeman issued approximately 5,600 residential
building permit units (Table 13), which is an average of 1,100 per year The highest year was
2021 with 1,383 new construction permits issued
Bozeman is building a range of housing types Since 2018, multifamily construction
(apartments and condominiums) have been the largest share of new construction with
3,700 units permitted, or 66 percent of the total Single family detached made up 17
percent of construction, or just under 1,000 new units Single family attached (duplex,
triplex, fourplex) were 9 4 percent of construction In 2021, the City started tracking
detached accessory dwelling units (ADUs), and 64 have been permitted since then
Construction has remained strong in 2023, with 913 new permits issued as of June
Table 13. Bozeman Building Permit Unit Trends
June 2018-2023
Description 2018 2019 2020 2021 2022 2023 Total Avg.%
Single Family 229 167 150 195 116 112 969 194 17.3%
Duplex ------106 40 44 190 38 3.4%
Triplex ------39 51 63 153 31 2.7%
Fourplex ------92 68 24 184 37 3.3%
Detached Accessory
Dwelling Unit ------25 26 13 64 13 1.1%
Multifamily / Condo 593 546 734 866 337 624 3,700 740 66.0%
Townhome 37 78 61 60 81 33 350 70 6.2%
Total 859 791 945 1,383 719 913 5,610 1,122 100.0%
Source: Economic & Planning Systems
4. Housing
Economic & Planning Systems, Inc 25
58
Housing Prices
Greater Bozeman has seen unprecedented appreciation in home prices The current
median home price is $767,500, up 1 7 percent from 2022 YTD Prices are still high, but the
rate of appreciation has slowed The largest price increases occurred between 2020 and
2021 with an almost 30 percent increase (Table 14) The median home price in the city
is now $767,500 compared to $359,500 in 2016 This rapid increase is related to amenity
migration away from large metro areas during the COVID-19 pandemic Bozeman has
already experienced steady and rapid appreciation since 2016 averaging 12 4 percent per
year on the median 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, 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 health and
wellbeing The City has incentives for affordable and workforce housing up to 120 percent
of AMI including funding for gap closure, a density bonus program, and leveraging tax
increment financing through their robust urban renewal program
Table 14. Home Price Trends, 2016-2023 Q2
2016-2023 Q2
Description 2016 2017 2018 2019 2020 2021 2022 2023 Q2 Total
Ann.
%
Median Sales Price
Bozeman $359,500 $381,500 $427,500 $460,000 $540,000 $700,000 $755,000 $767,500 $408,000 12.4%
Belgrade $255,000 $287,250 $320,000 $340,950 $375,000 $535,000 $625,000 $614,950 $359,950 14.5%
Greater Manhattan $280,000 $307,000 $389,000 $416,000 $564,750 $640,950 $832,500 $585,000 $305,000 12.0%
Gallatin County $310,000 $331,150 $374,660 $397,500 $439,900 $685,000 $811,000 $741,500 $431,500 14.4%
YOY % Change
Bozeman ---6.1%12.1%7.6%17.4%29.6%7.9%1.7%
Belgrade ---12.6%11.4%6.5%10.0%42.7%16.8%-1.6%
Greater Manhattan ---9.6%26.7%6.9%35.8%13.5%29.9%-29.7%
Gallatin County ---6.8%13.1%6.1%10.7%55.7%18.4%-8.6%
Source: Gallatin Association of Realtors; Economic & Planning Systems
26 Bozeman 2023 Economic and Market Update
59
Apartment Market
In Q2 2023, CoStar reported 5,590 apartment units in Bozeman, and an inventory increase
of 208 units per year on average (Table 15) This only includes units within apartment
buildings and does not include other rented homes Bozeman has approximately 90
percent of the multifamily inventory in Gallatin County, as tracked by CoStar From 2010 to
Q2 2023, Bozeman delivered 2,074 apartment units (Figure 10), which is nearly all of the
multifamily market in Gallatin County as a whole
On average, vacancy rates have been consistently low over the past decade Because the
rental market in Bozeman is undersupplied, the vacancy rates have followed a pattern of
increasing when new inventory enters the market, and then quickly decreasing as the
units are quickly absorbed, thus explaining the high vacancy rates in 2015 and the current
rate of 8 2 percent While Bozeman’s current vacancy rate is up significantly compared to
2022, given that Bozeman just delivered an estimated 700 units to the market, it is likely
that these rates will normalize by the end of the year
Table 15. Multifamily Summary, 2010-2023 Q2
Description 2010 2015 2020 2021 2022 2023 Q2
Inventory
Bozeman 2,533 2,934 3,805 3,928 4,244 4,607
Gallatin County 3,539 4,032 4,971 5,155 5,507 6,199
Bozeman as Pct.
of County 71.6%72.8%76.5%76.2%77.1%74.3%
Avg. Rent (per unit)
Bozeman $1,328 $1,410 $1,608 $1,768 $1,902 $1,961
Gallatin County $1,382 $1,467 $1,660 $1,804 $1,930 $1,976
Avg. Vacancy
Bozeman 1.8%4.3%2.3%1.7%1.5%1.2%
Gallatin County 2.1%4.3%2.1%1.6%1.3%1.1%
Change 2010-2023 Q2 Change 2020-2023 Q2
Description Total Ann. #Ann. %Total Ann. #Ann. %
Inventory
Bozeman 2,074 166 4.9%802 321 8.0%
Gallatin County 2,660 213 4.6%1,228 491 9.2%
Pct. of County 78.0%65.3%
Avg. Rent
Bozeman $633.25 $50.66 3.2%$352.75 $141.10 8.3%
Gallatin County $593.50 $47.48 2.9%$315.75 $126.30 7.2%
Source: CoStar; Economic & Planning Systems
Economic & Planning Systems, Inc 27
60
Figure 10. Multifamily Deliveries, 2010-2023 Q2
0
100
200
300
400
500
600
700
800
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Q2
units
MF Deliveries, 2010-Q2 2023
Bozeman Rest of Gallatin County
Source: Costar; Economic & Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: Costar; Economic & Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Source: CoStar; Economic& Planning Systems
[link to source]
Since 2021, Bozeman has seen the completion of eight major (50 units or more)
apartment buildings, six of which are market rate The two affordable apartment
buildings have a combined total of 270 units, with typical rents ranging from $1,251 to
$2,209 Of the market rate apartments, average rents range from $2,150 to $2,521 per unit
The largest of these apartment buildings with 268 units, The Oxbow, built in 2023, has
an average rent of $2,410 and an average unit size of 887 square feet Following closely
is the 19th and Graf Apartment Homes, featuring 195 units with an average unit size of
1,052 square feet and rents averaging $2,521 Nexus Point, constructed in 2022, offers an
average rent of $2,253 and an average square footage of 1,043 per unit The Silver Creek
Apartments, built in 2021, has an average rent of $2,150 and an average unit size of 877
square feet Lastly, Haymaker commands an average rent of $2,352 with an average unit
size of 851 square feet
Arrowleaf Park is a 135-unit affordable rental building that used low-income housing tax
credits (LIHTC) in its financing and is restricted to people earning up to 60 percent of
AMI It was developed in partnership with the local housing and social services nonprofit
HRDC and GMD Development The Annex of Bozeman combines student housing and
workforce rental housing with rents restricted to people earning between 80 and 120
percent of AMI
28 Bozeman 2023 Economic and Market Update
61
Table 16. Recent Multifamily Development, Bozeman
Notable Deliveries Address
Year
Built Units
Avg. Effective
Rent Per Unit
Market Rate
The Oxbow 5503 S Cottonwood Rd 2023 268 $2,410
19th and Graf Apartment Homes 2900 S 21st Ave 2023 195 $2,521
Nexus Point 2145-2075 W Arnold St 2022 120 $2,253
Silver Creek Apartments 1481 N 25th Ave 2021 118 $2,150
Haymaker 1624 W Babcock St 2023 95 $2,352
Penrose Apartments 300 Enterprise Blvd 2021 60 $2,346
Total/Average 856 $2,339
Affordable/Rent Subsidized
Arrowleaf Park 1683 Tschache Ln 2022 136 $1,251
The Annex of Bozeman 1800s 22nd St 2023 134 $2,209
Total/Average 270 $1,730
Source: CoStar; Economic & Planning Systems
The Oxbow
19th and Graf Apartment Homes
Nexus Point
Silver Creek Apartments
Haymaker
Economic & Planning Systems, Inc 29
62
Affordability
The rapid increase in housing prices has priced many people out of the market In 2016,
a household earning about 110 percent of the HUD area median income (AMI) could
afford the median priced home In 2022, a household needed to earn 183 percent of AMI
to afford a median priced home and 173 percent of AMI in 2023 The combination of a
shortage of inventory, a spike in construction costs, and pandemic-related migration has
driven up housing prices sharply Increasing the supply of housing will be important to
addressing the shortage of affordable and workforce housing
Table 17. Required Annual Income to Afford Median Home Price, 2016-2023
In 2016 the income levels needed to afford the median priced home were at 100 to 120
percent of AMI (Figure 11) In 2023 there are income gaps at all AMI levels below about 170
percent of AMI Households earning 150 percent of AMI ($189,600) would still need to earn
another $28,900 per year to afford the median priced home (Figure 12)
Bozeman Factor 2016 2017 2018 2019 2020 2021 2022 2023 Q2
Median Home Price $359,500 $381,500 $427,500 $460,000 $540,000 $700,000 $755,000 $767,500
Mortgaged Amount
(less: downpayment)5.0%
down pmt $341,525 $362,425 $406,125 $437,000 $513,000 $665,000 $717,250 $729,125
Mortgage Interest Rate 3.7% int.4.0% int.4.5% int.3.9% int.3.1% int.3.0% int.5.3% int.6.6% int.
Loan Term 30-years 30-years 30-years 30-years 30-years 30-years 30-years 30-years
Monthly Costs
Mortgage Payment (Monthly)$1,572 $1,730 $2,058 $2,061 $2,191 $2,804 $3,983 $4,657
Less: Insurance $1,500/
Year $125 $125 $125 $125 $125 $125 $125 $125
Less: Property Taxes 0.9%$300 $318 $356 $383 $450 $583 $629 $640
Less: Miscellaneous $500/
Year $42 $42 $42 $42 $42 $42 $42 $42
Total Monthly Housing Costs $2,038 $2,215 $2,581 $2,611 $2,807 $3,554 $4,779 $5,463
Required Annual Income 30%$81,529 $88,594 $103,228 $104,448 $112,290 $142,147 $191,150 $218,515
100% AMI for Family of 4 $74,200 $71,000 $81,200 $90,300 $90,400 $88,900 $104,700 $126,400
AMI for Family of 4 110%125%127%116%124%160%183%173%
[1] rounded to nearest major AMI category
Source: US Census; Economic & Planning Systems
30 Bozeman 2023 Economic and Market Update
63
Figure 11. Income Gap to Afford Median Priced Home, Bozeman, 2016
$59,360
$74,200 $89,040
$111,300
$133,560
$22,169 $7,329
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
80%100%120%150%180%Household IncomeAMI (4-person household)
AMI (4-person household)Gap
Source: U.S.Census; Economic & Planning Systems
$81,529 Income Required to Afford Median Home Price (2016)
Z:\Shared\Projects\DEN\233070 Bozeman 2023 Market Update\Models\[233070-Income Affordability.xlsx]T-AMIGap
Figure 12. Income Gap to Afford Median Priced Home, Bozeman, 2023
$101,120
$126,400
$151,680
$189,600
$227,520
$117,395 $92,115 $66,835
$28,915
$0
$50,000
$100,000
$150,000
$200,000
$250,000
80%100%120%150%180%
AMI (4-person household)
AMI (4-person household)Gap
Source: U.S.Census; Economic & Planning Systems
$218,515 Income Required to Afford Median Home Price (2023)
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 – nearly half of all renters (48
percent) 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
Economic & Planning Systems, Inc 31
64
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 over 700 housing units
annually (Table 18) just to keep up with job growth at 2 0 percent per year (compared to
3 9 percent annual growth over the past five years)
However, there are other strong market demand drivers that need to be accounted for
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 often associated with the physical off
location of their job outside the Gallatin Valley We have added another 10 percent to the
demand projections to reflect the estimated impact on the market from remote workers
In total, we estimate that the City can support demand for nearly 900 housing units
per year (Table 18) A potential housing mix based on past construction and goals of
supporting small homes and infill construction is suggested as well (Table 19)
Table 18. Bozeman Housing Demand Projection
2022-2032
Description Factor 2022 2032 Total Annual
Total Jobs - Gallatin County 2.0%100,000 121,900 21,900 2,190
Less: Proprietor Jobs Overcount [1]-10.0%-10,000 -12,190 -2,190 -219
Employed People 1.10 jobs/empl.81,818 99,736 17,918 1,792
Employed Households 1.30 jobs/household 62,940 76,720 13,780 1,378
Normal Vacancy Adjustment 5%3,310 4,040
Housing Units - Gallatin County 66,250 80,760 14,510 1,451
Baseline Demand - Bozeman
Bozeman Market Share 50.0%31,320 40,090 7,250 725
Other Market Influences
Part Time Residence Adjustment 10%806
In-migration and remote worker adjustment 10%895
[1] Counting of partnerships and LLCs in Bureau of Economic Analysis data often results in double counting of employees.
Source: Economic & Planning Systems
Table 19. Bozeman Housing Unit Projection
Description Factor 2022-2026 2027-2032 Total Annual
New Unit Demand in Bozeman 895/yr.4,475 4,475 8,951 895
Bozeman Construction Projection
Single Family (Detached)35.0%1,566 1,566 3,133 313
Townhome/Triplex/Duplex 30.0%1,343 1,343 2,685 269
Multifamily 35.0%1,566 1,566 3,133 313
Total 100.0%4,475 4,475 8,951 895
[1] Mobile homes and other miscellaneous housing types are not included
Source: Economic & Planning Systems
32 Bozeman 2023 Economic and Market Update
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Memorandum
REPORT TO:Economic Vitality Board
FROM:Jesse DiTommaso, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT:Update on Board Terms & Upcoming Meetings
MEETING DATE:November 1, 2023
AGENDA ITEM TYPE:Administration
RECOMMENDATION:Clarify any outstanding questions regarding board terms and upcoming
meetings.
STRATEGIC PLAN:7.3 Best Practices, Creativity & Foresight: Utilize best practices, innovative
approaches, and constantly anticipate new directions and changes relevant
to the governance of the City. Be also adaptable and flexible with an
outward focus on the customer and an external understanding of the issues
as others may see them.
BACKGROUND:APPOINTMENTS
At the end of this year, four of the Economic Vitality Board member terms
will expire. Board members may apply to serve a second term. Applications
can be found on the City website.
The Economic Vitality Board is governed by Resolution 5323. The standards
for recruitment and selection of board members per Resolution 5323 are
below:
SECTION 1: Membership, Recruitment, & Appointment
1) Membership: Membership is established in the resolutions, ordinances, or
statutes establishing each Board’s structure, including any mandatory
member qualification. Additional membership requirements include:
a) Board Members may only serve in one City appointed position at a time;
b) The balance of an unexpired term served by an appointee shall be
considered a “term” if such unexpired term exceeds 50% of the full term;
c) Upon completion of a gap in service equal to a position’s full term, a
former member may be eligible for re-appointment; and
d) Appointments should be made during a regular meeting in January. 2)
Recruitment: Commissioners, Board Members, and the City Manager are
encouraged to actively recruit qualified members to apply. During the
recruitment process, the City will focus on diversity, equity, and inclusion,
and will actively work to achieve membership that reflects, at the least, the
demographics of our community – as outlined in, but not limited to the gaps
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analysis and equity indictors report and available census data – across all
board membership.
Formal recruitment will occur by three methods:
a) Vacancies will be posted in the lobby of City Hall and on the City’s
website;
b) Biannual active solicitation period, as prescribed in Section 4.07 of the
City Charter; and
c) As necessitated by vacancies.
UPCOMING MEETINGS
The December meeting of the Economic Vitality Board will be used for the
board's annual ethics training. Annual ethics training is a requirement from
the City's Charter of all appointed and elected officials. If you will not be able
to attend the December meeting of the Economic Vitality Board, please let
staff know so other arrangements can be made.
As we prepare for the creation of the 2024-2025 work plan, we will review
the work from the 2022-2023 work plan (attached).
UNRESOLVED ISSUES:None.
ALTERNATIVES:As recommended by the board.
FISCAL EFFECTS:None.
Attachments:
EV Board workplan - color coded 12.05.22 (003).pdf
Report compiled on: October 25, 2023
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