HomeMy WebLinkAbout05-06-24 CDB Agenda and Packet MaterialsA. Call to Order - 6:00 pm
B. Disclosures
C. Changes to the Agenda
D. Approval of Minutes
D.1 Approval of Minutes(Sagstetter)
E. Public Comments
THE COMMUNITY DEVELOPMENT BOARD OF BOZEMAN, MONTANA
CDB AGENDA
Monday, May 6, 2024
General information about the Community Development 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
comments@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 Anna Bentley, abentley@bozeman.net
This meeting will be held both in-person and also using an online video conferencing system. You
can join this meeting:
Via Video Conference:
Click the Register link, enter the required information, and click submit.
Click Join Now to enter the meeting.
Via Phone: This is for listening only if you cannot watch the stream, channel 190, or attend in-
person
United States Toll
+1 346 248 7799
Access code: 954 6079 2484
Approve
This is the time to comment on any matter falling within the scope of the Community
Development 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 Community Development Board cannot take action on any item which does not
appear on the agenda. All persons addressing the Community Development Board shall speak in a
1
F. Special Presentations
F.1 Special Presentation on Affordable Housing Work Presently Underway (Fine)
G. Action Items
G.1 Review and Consider Recommending Approval of the Zoning Text Amendment to Reduce
the Minimum Rear Yard Setback for Lots Abutting Alleys in the Residential Emphasis Mixed
Use (REMU) Districts Citywide; Application 24055(Montana)
H. FYI/Discussions
I. Adjournment
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.
Recommend Approval of the Zoning Text Amendment to Reduce the Minimum Rear Yard Setback for
Lots Abutting Alleys in the Residential Emphasis Mixed Use (REMU) Districts Citywide; Application
24055
This board generally meets the first and third Monday of the month from 6:00 pm to 8:00 pm.
City Board meetings are open to all members of the public. If you have a disability that requires
assistance, please contact our Acting ADA Coordinator, Max Ziegler, at 406.582.2439 (TDD
406.582.2301).
2
Memorandum
REPORT TO:Community Development Board
FROM:Sam Sagstetter - Community Development.
SUBJECT:Approval of Minutes
MEETING DATE:May 6, 2024
AGENDA ITEM TYPE:Community Development - Legislative
RECOMMENDATION:Approve
STRATEGIC PLAN:1.1 Outreach: Continue to strengthen and innovate in how we deliver
information to the community and our partners.
BACKGROUND:None.
UNRESOLVED ISSUES:None.
ALTERNATIVES:Approve with corrections.
FISCAL EFFECTS:None.
Attachments:
040124 CDB Mintues.pdf
Report compiled on: May 1, 2024
3
Community Development Meeting Minutes, April 1, 2024
Page 1 of 5
THE COMMUNITY DEVELOPMENT MEETING OF BOZEMAN, MONTANA
MINUTES
APRIL 1, 2024
General information about the Community Development Board is available in our Laserfiche repository.
Present: Brady Ernst, Nicole Olmstead, Henry Happel, Chris Egnatz, Jennifer Madgic, Jason Delmue,
Ben Lloyd, Mark Egge
Excused: Padden Guy Murphy
A) 00:03:55 Call to Order - 6:00 pm
B) 00:04:43 Disclosures
00:04:46 Nicole Olmstead makes a disclosure.
C) 00:05:06 Changes to the Agenda
D) 00:05:18 Consent Items
00:05:58 Connie Lein provides public comment.
00:12:16 Jeremy Puckett provides public comment.
D.1 00:05:34 Urban Farm Phase 2 Preliminary Plat application with a subdivision
variance to Section 38.400.010 BMC, to subdivide two lots zoned REMU and B-2M
totaling 86.44 acres into a 39 lot major subdivision for residential, commercial, park, and
open space uses. Generally located north of Huffine Lane, south of Fallon Street, and
west of Cottonwood Road. Application 23039 (Quasi-Judicial)
23039 CDB Staff Report.pdf
00:17:44 Motion to approve Having reviewed and considered the application materials, public
comment, and all the information presented, I hereby adopt the findings presented in the staff report
for application 23039 and move for the Community Development Board in its capacity as the Planning
Board to recommend approval of the subdivision with conditions and subject to all applicable code
provisions.
4
Community Development Meeting Minutes, April 1, 2024
Page 2 of 5
Henry Happel: Motion
Chris Egnatz: 2nd
00:17:56 Vote on the Motion to approve Having reviewed and considered the application materials, public
comment, and all the information presented, I hereby adopt the findings presented in the staff report for
application 23039 and move for the Community Development Board in its capacity as the Planning Board
to recommend approval of the subdivision with conditions and subject to all applicable code provisions.
The Motion carried 7 - 0.
Approve:
Brady Ernst
Henry Happel
Chris Egnatz
Jennifer Madgic
Jason Delmue
Ben Lloyd
Mark Egge
Disapprove:
None
E) 00:18:23 Public Comments
F) 00:19:19 Action Items
00:19:37 Danielle Garber and Jessica Ahlstrom presents to the board.
02:07:08 Daniel Cardy provides public comment.
02:10:12 Troy Cher provides public comment.
F.1 00:19:21 Ordinance 2155 to Revise Chapter 38 and 40 of the Bozeman Municipal
Code to Include Required Water Efficient Landscape and Irrigation Performance and
Design Standards
23343 Staff Report for the City of Bozeman Water Efficient Landscape Ordinance 2155
02:16:41 Motion to amend Community Development Board Recommended Motion: Having reviewed
and considered the staff report, draft ordinance, public comment, and all information presented, I
hereby adopt the findings presented in the staff report for application 23343 and move to recommend
approval of Ordinance 2155.
Mark Egge: Motion
Ben Lloyd: 2nd
02:40:33 Vote on the Motion to amend Community Development Board Recommended Motion: Having
reviewed and considered the staff report, draft ordinance, public comment, and all information presented,
5
Community Development Meeting Minutes, April 1, 2024
Page 3 of 5
I hereby adopt the findings presented in the staff report for application 23343 and move to recommend
approval of Ordinance 2155. The Motion carried 8 - 0.
Approve:
Brady Ernst
Nicole Olmstead
Henry Happel
Chris Egnatz
Jennifer Madgic
Jason Delmue
Ben Lloyd
Mark Egge
Disapprove:
None
02:41:05 Motion to amend Amend the recommended motion to reduce the vegetative coverage
requirement to 25% down from 60%
Mark Egge: Motion
Jason Delmue: 2nd
02:44:39 Vote on the Motion to amend Amend the recommended motion to reduce the vegetative
coverage requirement to 25% down from 60% The Motion failed 2 - 6.
Approve:
Henry Happel
Mark Egge
Disapprove:
Brady Ernst
Nicole Olmstead
Chris Egnatz
Jennifer Madgic
Jason Delmue
Ben Lloyd
02:53:56 Motion to amend Approve with the amendment of the minimum turf percentages be
increased as lot sizes decrease so in all events a sufficient amount of turf could be permitted for all lots
within the city.
Henry Happel: Motion
Chris Egnatz: 2nd
6
Community Development Meeting Minutes, April 1, 2024
Page 4 of 5
02:55:03 Vote on the Motion to amend Approve with the amendment of the minimum turf percentages
be increased as lot sizes decrease so in all events a sufficient amount of turf could be permitted for all lots
within the city. The Motion carried 8 - 0.
Approve:
Brady Ernst
Nicole Olmstead
Henry Happel
Chris Egnatz
Jennifer Madgic
Jason Delmue
Ben Lloyd
Mark Egge
Disapprove:
None
02:54:31 Motion to approve Move to approve motion as amended per prior motions.
Jason Delmue: Motion
Chris Egnatz: 2nd
02:55:22 Vote on the Motion to approve Move to approve motion as amended per prior motions. The
Motion carried 8 - 0.
Approve:
Brady Ernst
Nicole Olmstead
Henry Happel
Chris Egnatz
Jennifer Madgic
Jason Delmue
Ben Lloyd
Mark Egge
Disapprove:
None
G) 02:56:13 FYI/Discussions
H) 03:02:36 Adjournment
This board generally meets the first and third Monday of the month from 6:00 pm to 8:00 pm.
7
Community Development Meeting Minutes, April 1, 2024
Page 5 of 5
8
Memorandum
REPORT TO:Community Development Board
FROM:David Fine, Urban Renewal Program Manager
Chris Saunders, Community Development Manager
SUBJECT:Special Presentation on Affordable Housing Work Presently Underway
MEETING DATE:May 6, 2024
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Receive information
STRATEGIC PLAN:4.5 Housing and Transportation Choices: Vigorously encourage, through a
wide variety of actions, the development of sustainable and lasting housing
options for underserved individuals and families and improve mobility
options that accommodate all travel modes.
BACKGROUND:Affordable housing has been a long-standing concern in Bozeman. Many
actions have been taken and policies investigated to help address this
complex issue. The City adopted the Community Housing Action Plan and
Bozeman Community Plan 2020. Both documents encourage and support
creation of a wide variety of housing types and additional quantities,
especially affordable housing. The 2021 MT Legislature changed the law to
require that Montana communities only use incentives to encourage and
support creation of affordable housing.
The City passed Ordinance 2104 in October 2022 replacing Division 38.380,
Affordable Housing, [External Link] to update our local regulations to meet
the new law. As part of the code development process, the City conducted
economic modelling of to verify the viability of proposed incentives.
The City's affordable housing incentives are managed by the Economic
Development Department. Personnel from Economic Development will
make a presentation on programs and current outcomes from the on-going
work. Significant housing numbers have been created, are in construction, or
are in the planning phases. Affordable housing remains a matter of high
community concern. Three documents are attached providing information
on Area Median Income and housing market conditions.
UNRESOLVED ISSUES:None
ALTERNATIVES:None
FISCAL EFFECTS:None
9
Attachments:
AMI Calculator 2023 HUD Income Limits.pdf
2023 Market Update.pdf
233073 Multifamily Market Conditions_2-23-24.pdf
Report compiled on: May 2, 2024
10
1 Person 2 People 3 People 4 People
Description Factor Studio 1 BR 2 BR 3 BR+
Percent of AMI
50% Very Low-Income 1.0 $36,850 $42,100 $47,350 $52,600
60%1.2 $44,200 $50,500 $56,800 $63,100
70%1.4 $51,600 $58,950 $66,300 $73,650
80% Affordable Rental 1.6 $58,950 $67,350 $75,750 $84,150
90%1.8 $66,350 $75,800 $85,250 $94,700
100%2.0 $73,700 $84,200 $94,700 $105,200
120% Affordable For-Sale 2.4 $88,450 $101,050 $113,650 $126,250
150%3.0 $110,550 $126,300 $142,050 $157,800
200%4.0 $147,400 $168,400 $189,400 $210,400
Maximum Affordable Monthly Housing Payment 30% of income
60%$1,105 $1,263 $1,420 $1,578
70%$1,290 $1,474 $1,658 $1,841
80% Affordable Rental $1,474 $1,684 $1,894 $2,104
90%$1,659 $1,895 $2,131 $2,368
100%$1,843 $2,105 $2,368 $2,630
120% Affordable For-Sale $2,211 $2,526 $2,841 $3,156
150%$2,764 $3,158 $3,551 $3,945
200%$3,685 $4,210 $4,735 $5,260
HOA Mo. Fee $150
Homeowners Insurance $110
Maximum Monthly Housing Payment Less Fees
60%$845 $1,003 $1,160 $1,318
70%$1,030 $1,214 $1,398 $1,581
80% Affordable Rental $1,214 $1,424 $1,634 $1,844
90%$1,399 $1,635 $1,871 $2,108
100%$1,583 $1,845 $2,108 $2,370
120% Affordable For-Sale $1,951 $2,266 $2,581 $2,896
150%$2,504 $2,898 $3,291 $3,685
200%$3,425 $3,950 $4,475 $5,000
Interest Rate 7.00%
Term (Years)30
Down payment 5.00%
Property Taxes 1.50%
Mortgage Insurance 1.00%
Affordable Purchase Price
60%$129,100 $153,200 $177,300 $201,300
70%$157,400 $185,500 $213,600 $241,700
80% Affordable Rental $185,500 $217,600 $249,700 $281,800
90%$213,800 $249,900 $286,000 $322,100
100%$241,800 $282,000 $322,100 $362,200
120% Affordable For-Sale $298,200 $346,300 $394,500 $442,600
150%$382,600 $442,800 $503,000 $563,200
200%$523,400 $603,700 $683,900 $764,100
Source: HUD; Economic & Planning Systems
C:\Users\dfine\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\2V55N7TG\[AMI Calculator 2023 HUD Income Limits (002).xlsm]T-AMI Calculator
11
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
12
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
13
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
14
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
15
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
16
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
17
•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
18
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
19
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
20
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
21
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
22
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
Economic & Planning Systems, Inc 9
23
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
24
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
Economic & Planning Systems, Inc 11
25
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
26
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
27
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
28
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
29
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
30
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
31
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
32
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
33
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
34
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
35
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
36
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
37
THIS PAGE INTENTIONALLY LEFT BLANK
38
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
39
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
40
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
41
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
42
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
43
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
44
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
45
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
46
233073 Multifamily Market Conditions_2-23-24.docx
M E M O R A N D U M
To: David Fine, MPA, Economic Development Manager
Renata Munfrada, Community Housing Program Coordinator
City of Bozeman
From: Brian Duffany, Principal
Keely Maher, Associate
Subject: Multifamily Market Conditions; EPS #233073
Date: February 22, 2024
The City of Bozeman asked Economic & Planning Systems (EPS)
to prepare an analysis of market conditions for multifamily
housing, including market rate and affordable multifamily
housing, to inform allocations from the 4.0% Low Income
Housing Tax Credit (LIHTC) program.
There are approximately 1,300 new units of housing proposed in
2024 that will use 4.0% LIHTC funding. We do not know yet if all
of these projects will be constructed in 2024; we think it is more
likely that they will be spread out over at least two years due to
the capacity of general contractors and construction labor in the
Bozeman area.
This memorandum contains four main sections outlined below.
• Proposed Projects – An overview of the new 4% LIHTC
developments being considered in Bozeman.
• Market Conditions and Absorption Indicators – Reviews
trends in multifamily construction (unit deliveries), vacancy
rates, and rents.
• Household Income and Capture Rate – Compares the
number of households at or below 60% of AMI to the current
and proposed LIHTC inventory.
• Recent LIHTC Property Data – Presents information on
wait lists and vacancy rates for LIHTC properties built over
about the past 10 years.
47
Memorandum: Multifamily Market Conditions
Page | 2
Proposed Projects
The list, to date, of projects being considered in the city are listed in Table 1.
Five projects are proposed to be income limited at or below 60% of AMI. Two
projects are proposing to use income averaging and open to households earning
between 50% and 70% of AMI. At this planning stage, HRDC is a potential
partner in three of the projects. HRDC is nonprofit housing development and
property manager, and service provider in the region. HRDC maintains wait lists
and interest lists across numerous properties it manages in the region and will be
able to draw from those lists to help with initial lease up.
Table 1. Proposed 4% LIHTC Projects
Market Conditions and Absorption Indicators
This section of the memorandum compares trends in the multifamily inventory
growth to vacancy rates and rents. Since 2014, the Bozeman market has added
over about 3,000 multifamily units or just over 300 units per year (Table 2). The
Bozeman market area includes the city limits and some areas outside the city
between Belgrade and Bozeman to about Four Corners. These data reflect almost
entirely market rate projects. The years with the largest supply increases were
2015 with 333 units, 2020 with 678 units, 2022 with 485 units, and 2023 with
787 units.
Table 2. Multifamily inventory and new unit deliveries, 2014-2023
Project Units
Proposed
Income Limits
Non-profit
partner?
14th & Patrick 155 <=60% AMI HRDC
N. 3rd Apartments 216 <=50-70% AMI Hearthstone
Midtown Aspen 40 <=50-70% AMI HRDC
Aspen 8 126 <=60% AMI HRDC
Aaker 146 <=60% AMI TBD
Rocky Mountain Flats 300 <=60% AMI TBD
Roehrs Construction 300 <=60% AMI TBD
Total 1,283
Boundary Development TBD <=60% AMI TBD
Source: Economic & Planning Systems
Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\LIHTC Analysis\[233073 Proposed LIHTC Projects.xlsx]Sheet1
Inventory (units)2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Ann. #
Inventory (units)3,158 3,491 3,742 3,788 3,813 4,052 4,730 4,913 5,398 6,185 3,027 336
Deliveries (units)86 333 251 46 25 239 678 183 485 787 3,113 311
Source: CoStar; Economic & Planning Systems
C:\Egnyte\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\[233070 - Costar Data_Updated.xlsx]T-Inventory
Change 2014-2023
48
Economic & Planning Systems, Inc.
Page | 3
When new supply is brought to the Bozeman market it is absorbed at a
reasonable pace. In 2015, the 333 new units resulted in an increase in the
vacancy rate from 5.1 percent to 7.4 percent. By the end of 2016, the vacancy
rate dropped back to 5.5 percent. In 2016, another 251 units were added and the
vacancy rate continued to drop to a low of 2.5 percent in 2018 — a level that
indicates a shortage of supply. During much of the period between 2018 and
2022, the vacancy rate was below 5.0 percent. Market analysts generally consider
5.0 to 7.0 percent to be an indicator of a balanced market.
In 2019 and 2020, 918 units were added and the vacancy rate only reached 5.3
percent in 2020. In 2021, the vacancy rate dropped back to 3.8 percent when 183
more units were brough to the market. Some of the largest supply increases in
the past 10 years were in 2022 and 2023 when a total of just under 1,300 new
units were developed. The vacancy rate at the end of 2023 was 9.4 percent.
Given past trends and the historic strength of the Bozeman market, we expect
this supply to also be absorbed within a year or two.
Figure 1. New Unit Deliveries vs. Vacancy Rate, 2014-2023
The shortage of supply has allowed property owners to raise rents, particularly
between 2020 and 2022. From 2020 through 2021, rents increased by 8.8 percent
while the vacancy rate dropped from 5.3 to 3.8 percent. From 2021 through
2022, average rents increased by 7.5 percent while 485 new units were delivered
with the market vacancy rate at 4.8 percent. The increases in supply in 2022 and
2023 reduced the upward pressure on rents, as rents only increased by 0.3
percent. The average apartment rent is now at approximately $1,944 per month.
49
Memorandum: Multifamily Market Conditions
Page | 4
Table 3. Average Monthly Rent, 2014-2023
Household Income and Capture Rate
EPS estimated the market share of renters that the current and projected LIHTC
inventory captures. The first step in that analysis is tabulating the number of
renter households in the market area, comprised of the Bozeman and Belgrade
Census County Divisions (Figure 2). From the Census’ 5-year ACS estimates, this
area has approximately 16,600 renter households that comprises nearly 90
percent of all renter households in Gallatin County (Table 4). The proposed LIHTC
projects will be available to households earning 60% of AMI or less, and there are
about 7,400 renter households at or below 60% of AMI in the market area, or 45
percent of all renter households.
These 5-year ACS household estimates undercount the actual number of
households. The 5-Year ACS data are a rolling 5-year average and not a point in
time estimate. So, the market share calculations that follow somewhat overstate
actual market share. We have also not factored in the potential for these
properties to draw people from other areas of Gallatin County and surrounding
counties that also have housing shortages.
Figure 2. Market Area Map: Bozeman and Belgrade Census County Divisions
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Change Ann. %
Avg. Monthly Rent $1,472 $1,480 $1,523 $1,560 $1,589 $1,618 $1,656 $1,803 $1,938 $1,944 $472 3.1%
Ann. % Change 0.6%2.9%2.4%1.9%1.8%2.4%8.8%7.5%0.3%
Source: CoStar; Economic & Planning Systems
Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\[233070 - Costar Data_Updated.xlsx]T-Rent
2014-2023
50
Economic & Planning Systems, Inc.
Page | 5
Table 4. Renter Households By Area Median Income Range, 2022 (ACS 5-Year Estimates)
Renter Households Gallatin County Bozeman CCD Belgrade CCD
Households
Less than 30% AMI 3,669 2,826 601 3,427
31% to 60% AMI 4,548 3,298 726 4,024
61% to 80% AMI 2,767 2,048 369 2,417
81% to 100% AMI 2,054 1,356 495 1,851
101% to 120% AMI 1,527 1,034 345 1,379
121% to 150% AMI 1,518 1,212 128 1,340
Greater than 150% AMI 2,419 1,829 357 2,186
Total 18,502 13,603 3,021 16,624
100.0%73.5%16.3%89.8%
60% AMI or Less 8,217 6,124 1,327 7,451
% of Total
Less than 30% AMI 19.8%20.8%19.9%20.6%
31% to 60% AMI 24.6%24.2%24.0%24.2%
61% to 80% AMI 15.0%15.1%12.2%14.5%
81% to 100% AMI 11.1%10.0%16.4%11.1%
101% to 120% AMI 8.3%7.6%11.4%8.3%
121% to 150% AMI 8.2%8.9%4.2%8.1%
Greater than 150% AMI 13.1%13.4%11.8%13.1%
Total 100.0%100.0%100.0%100.0%
60% AMI or Less 44.4%45.0%43.9%44.8%
Source: US Census ACS; Economic & Planning Systems
Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\[233073 HH by AMI.xlsx]T- AMI (Market Area)
Market Area Total
Market Area
51
Memorandum: Multifamily Market Conditions
Page | 6
From the HUD database of tax credit properties, EPS identified 1,517 housing
units income restricted at or below 60% of AMI (Table 5). These roughly 1,500
units represent a market share of 20 percent of the 7,451 renter households in
the eligible income ranges. The nearly 1,300 units that are being considered in
Bozeman would bring the total inventory to 2,800 units and the market share of
60% of AMI renter households to approximately 38 percent. That still leaves a
substantial number of renter households – over 60 percent and 4,600 households
– that would also qualify for these properties. At the property level, no individual
proposed project would have more than 4.0 percent market share.
Table 5. 60% AMI LIHTC Market Share, Current and Projected
Many renter households are in unaffordable living situations. Half of renters in the
Bozeman CCD are cost burdened (paying more than 30 percent of income in
rent), including about 25 percent who are severely cost burdened (paying 50
percent or more of income in rent). The figures are similar in the Belgrade CCD
where just over 40 percent are cost burdened including just over 20 percent who
are severely cost burdened.
Description Gallatin County Market Share Market Area Market Share
Renter Households 60% AMI or Less 8,217 7,451
Current Market Share
<60% AMI LIHTC Units 1,517 18.5%1,517 20.4%
Projected Market Share
Existing <60% AMI LIHTC Units 1,517 1,517
Proposed <60% AMI LIHTC Units
14th & Patrick 155 1.9%155 2.1%
N. 3rd Apartments 216 2.6%216 2.9%
Midtown Aspen 40 0.5%40 0.5%
Aspen 8 126 1.5%126 1.7%
Aaker 146 1.8%146 2.0%
Rocky Mountain Flats 300 3.7%300 4.0%
Boundary Development TBD ---TBD ---
Roehrs Construction 300 3.7%300 4.0%
Subtotal 1,283 15.6%1,283 17.2%
Total 2,800 34.1%2,800 37.6%
Source: HUD LIHTC Database; Economic & Planning Systems
Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\[233073 HH by AMI.xlsx]T-Market Share
52
Economic & Planning Systems, Inc.
Page | 7
Recent LIHTC Property Data
EPS contacted property managers for LIHTC projects built in the past 10 years to
obtain information on vacancy rates and wait lists. All properties are essentially
full with the only vacancies being for units that are turning over to be re-leased to
new tenants (Table 6). Most properties report less than 5.0 percent vacancy.
Boulevard Apartments and Darlington Manor noted that their vacancies are largely
in tenant turnover and readying units for new tenants. Property managers
indicated that most tenants stay for many years once they find secure housing.
This does not allow for much mobility in the market for new tenants to find
housing, hence the need to add new supply.
Table 6. Newer LIHTC Property Vacancy Rates and Wait Lists
Project Name Year Built AMI Range # Units
Vacancy
Rate Waitlist
Arrowleaf Park 2022 60% AMI 136 1.3%15 interest list
Baxter Apartments (Rehab)2022 60% AMI 48 0.1%20 people per bedroom size waitlist
Boulevard Apartments (Rehab)2021 60% AMI 41 Approx. 5%111 on waitlist
Comstock Apartments (Rehab)2022 60% AMI 86 0.1%20 people per bedroom size waitlist
Darlinton Manor (Rehab)2020 60% AMI 100 Approx. 5%72 on waitlist (elderly and disabled)
Larkspur Commons 2016 60% AMI 136 2.9%9 people on waitlist
Perennial Park 2021 60% AMI 96 1.0%12 on interest list
Stoneridge Apartments 2016 60% AMI 48 2.5%2-2.5 yr. wait
Timber Ridge Apartments 2023 60% AMI 30 3.4%2-2.5 yr. wait
Total 721
Source: Economic & Planning Systems
Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Data\LIHTC Analysis\[Property List - RM edits 2.8.24.xlsx]Sheet1
53
Memorandum: Multifamily Market Conditions
Page | 8
Conclusions
The proposed LIHTC properties represent a substantial increase in housing supply
for low income renters. EPS’ opinion is that this supply will be absorbed by the
current demand from renters, and the expected continued growth of this region.
Several points noted below summarize the demand for affordable housing.
• The Bozeman market has seen several cycles where large amounts of new
supply are added, the vacancy rate rises, and then stabilizes within a year
or two.
• The median home price in the Bozeman area is over $800,000, and nearly
$600,000 in the Belgrade area. This is out of reach for most people, making
renting the only other option.
• The household income limits for qualification purposes in this area are high,
which opens up the LIHTC property market to more people. The median family
income for a family of 4 is $126,400 (100% of AMI). For a 2-person household
at 60% of AMI it is $50,500. That is equivalent to two people earning $12.00
per hour or one person earning $24.00 per hour. The current average wage in
retail trade is $21.40 per hour and is one of the largest and fastest growing
industries in this region.
• The Gallatin County economy continues to add jobs, approximately 90 percent
of which are in the Bozeman and Belgrade area. From 2022-2023Q2, jobs
grew by 5.1 percent or 2,200 jobs. Retail, accommodations, and food services
sectors—typically lower wage industries—accounted for about half of the new
jobs during this period.
54
Memorandum
REPORT TO:Community Development Board
FROM:
Susana Montana, Senior Planner, Development Review Division
Brian Krueger, Manager, Development Review Division
Erin George, Deputy Director of Community Development
Anna Bentley, Director of Community Development
SUBJECT:Review and Consider Recommending Approval of the Zoning Text
Amendment to Reduce the Minimum Rear Yard Setback for Lots Abutting
Alleys in the Residential Emphasis Mixed Use (REMU) Districts Citywide;
Application 24055
MEETING DATE:May 6, 2024
AGENDA ITEM TYPE:Community Development - Quasi-Judicial
RECOMMENDATION:Recommend Approval of the Zoning Text Amendment to Reduce the
Minimum Rear Yard Setback for Lots Abutting Alleys in the Residential
Emphasis Mixed Use (REMU) Districts Citywide; Application 24055
STRATEGIC PLAN:4.2 High Quality Urban Approach: Continue to support high-quality planning,
ranging from building design to neighborhood layouts, while pursuing urban
approaches to issues such as multimodal transportation, infill, density,
connected trails and parks, and walkable neighborhoods.
BACKGROUND:
This Zone Text Amendment (ZTA) application was submitted by the Bridger
Land Group, developers of the Blackwood Groves subdivision which lies
within a Residential Emphasis Mixed Use (REMU) District. This is a request to
amend Table 38.320.040 of the City’s Unified Development Code (UDC) to
reduce the minimum rear yard setback for residential lots abutting an alley
in REMU Districts. The rear setback would be reduced from ten (10) or
fifteen (15) feet to six (6) feet. This amendment would apply to all
residential lots whose rear yards abut an alley within REMU Districts
citywide.
UNRESOLVED ISSUES:None.
ALTERNATIVES:None suggested
55
FISCAL EFFECTS:
Fiscal effects are undetermined at this time but any residential development
occurring as a result of this text amendment would increase property tax
revenue to the City, along with increased costs to deliver municipal services
to the property.
Attachments:
24055 REMU alley rear setback staff rpt 04 24 24.pdf
Applicant's Narrative.pdf
24055 REMU rear yard setback DRAFT Ordinance.docx
Report compiled on: April 24, 2024
56
Alley Rear Yard Setback Reduction in REMU Districts ZTA; 24055 Page 1 of 24
Staff Report for the Reduced Alley Rear Yard Setback in REMU Districts
Zone Text Amendment (ZTA), Application No. 24055.
Public Hearing Date(s): Community Development Board acting in their capacity as the
Zoning Commission will hold a public hearing on May 6, 2024 at 6:00 pm.
City Commission public hearing will be held on May 21, 2024 at 6:00 pm.
Project Description: A Zone Text Amendment (ZTA) to modify Table 38.320.040 of the
City’s Unified Development Code (UDC) of the Bozeman Municipal Code (BMC) to
reduce the rear yard setback for residential lots abutting an alley within a REMU
(Residential Emphasis Mixed Use) District from 10- or 15-feet to 6-feet.
Project Location: This proposed revision to the UDC text would be applicable to all REMU
Districts city-wide.
Staff Recommendation: The proposed text amendment meets the UDC Section 38.260.010
ZTA criteria for approval.
Recommended Community Development Board Motion: Having reviewed and considered
the application materials, staff report, public comment, and all information presented,
I hereby adopt the findings presented in the staff report for application 24055 and
recommend approval of Ordinance 2161 amending Table 38.320.040 of the UDC text
to reduce rear yard setbacks for residential lots abutting alleys in REMU Districts.
Report Date: April 24, 2024
Staff Contact: Susana Montana, Senior Planner
Agenda Item Type: Action – Legislative
57
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 2 of 24
EXECUTIVE SUMMARY
This report is based on the application materials, staff evaluations, and public comment received
to date. The full application and file of record can be viewed at the Community Development
Department at 20 E. Olive Street, Bozeman, MT 59715 or here or
https://weblink.bozeman.net/WebLink/Browse.aspx?id=287867&dbid=0&repo=BOZEMAN
Unresolved Issues
There are no unresolved issues.
Project Summary
This Zone Text Amendment (ZTA) application was submitted by the Bridger Land Group,
developers of the Blackwood Groves subdivision which lies within a Residential Emphasis Mixed
Use (REMU) District. This is a request to amend the City’s Unified Development Code (UDC) to
reduce the rear yard setback for residential lots abutting an alley in REMU Districts. The rear
setback would be reduced from ten (10) or fifteen (15) feet to six (6) feet. This amendment to
Table 38.320.040, shown in Figure 5 below, would apply to all residential lots whose rear yards
abut an alley within REMU Districts citywide.
Figure 1: Blackwood Groves Block 8 as an example of a residential block with an alley.
58
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 3 of 24
The minimum rear setback in the REMU District was established at 10-feet for small single-
household lots [less than 4,000 sf in size]; at 15-feet for single-household lots greater than 4,000
sf in size; and at 10-feet for other housing type lots (townhouse/rowhouse, two- to four-household
dwellings, group living and apartments). Please see Figure 5 below showing the current and
proposed UDC Table 38.320.040.E standards. The Applicant wishes to maximize the footprint of
buildings on these lots by reducing the rear setback to from 10- or 15-feet to 6-feet (see Figures 6,
7 and 8 below).
Community Development Board Recommendation
The recommendation of this Board, acting as the Zoning Commission, will be provided to the City
Commission prior to the Commission’s May 21, 2024 public hearing as part of the Commissions’
packet.
Alternatives
1. Recommend denial of the request based on findings of non-compliance with the
applicable criteria contained within the staff report;
2. Recommend approval of the request;
3. Recommend approval of an amended version of the request; or
4. Continue the public hearing on the application, with specific direction to staff to supply
additional information or to address specific items.
59
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 4 of 24
TABLE OF CONTENTS
EXECUTIVE SUMMARY ...................................................................................................... 2
Unresolved Issues ..................................................................................................................... 2
Project Summary ....................................................................................................................... 2
Community Development Board Recommendation ................................................................. 3
Alternatives ............................................................................................................................... 3
SECTION 1 – MAPS AND TABLES ...................................................................................... 5
SECTION 2 – STAFF RECOMMENDATION AND PUBLIC HEARINGS ....................... 12
SECTION 3 - TEXT AMENDMENT STAFF ANALYSIS AND FINDINGS ..................... 12
SECTION 4 - PROTEST NOTICE FOR ZONING AMENDMENTS .................................. 20
APPENDIX A - BACKGROUND AND APPLICANT’S RATIONALE FOR THE ZONE
TEXT AMENDMENT ........................................................................................................... 20
APPENDIX B - NOTICING AND PUBLIC COMMENT .................................................... 24
APPENDIX C - APPLICANT INFORMATION AND REVIEWING STAFF .................... 24
FISCAL EFFECTS ................................................................................................................. 24
.
60
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 5 of 24
SECTION 1 – MAPS AND TABLES
Figure 2: City of Bozeman –The proposed amendment would apply to all current REMU
Districts (in purple) and future REMU zoning districts citywide.
Current REMU Districts can be found in the Community Developer Viewer via this link and
by clicking on the zoning map layer found in the left side legend.
61
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 6 of 24
Figure 3: 2024 Cityside Map of REMU Districts in purple color.
62
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 7 of 24
Figure 4: Community Plan Future Land Use Map (FLUM).
Tan color
63
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 8 of 24
Figure 5: Table 38.320.040, Proposed rear setback standards for REMU Districts.
(Amendments noted in red underlined text)
Standard Small-lot
single-
household
Single-
household
Townhouse/
rowhouse
townhouse/
rowhouse cluster1
Two to four
household
dwellings,
group living,
apartments
Mixed use
(residential
over
commercial)
Non-
residential
Minimum-Maximum Setbacks (feet) (38.320.020.E)
(where only one number is shown in the column, there is no "maximum" setback)
Front
Setback
(minimum
and
maximum)
10-15 10-15 10-15 10-15 Note7 Note8
Setback to
an
individual
garage
oriented to
the street
2011 2011 2011 — — —
Rear
Setback
10 15 10 10 — —
Rear
Setback
Adjacent to
an Alley
6’ 6’ 6” 6” __ __
Side
Setback
59 59 510 5 — —
Garages and Special Parking Standards
Residential
garages
Note12 Note12 Note12 Note12 Note12 —
Special
Parking
Standards
— — — Note13 Note6,13,14 Note6,13,1
4
64
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 9 of 24
Notes:
12. Special garage standards for single to four-household uses. To ensure that the subject housing types
contribute to a community-oriented, pedestrian-friendly streetscape, they must comply with the
following specific standards of this chapter:
a. Section 38.350.070, parking and garages for single to four-household residential uses.
b. Section 38.400.090.C.2.a, drive access requirements—residential.
c. Section 38.540.010.A.4, stacking of off-street parking spaces.
d. Section 38.540.010.A.5, no parking permitted in required front or side setbacks.
e. Section 38.540.010.A.6, parking permitted in rear setbacks.
[the above is unchanged remaining text of Table 38.320.040]
Figure 6: Blackwood Groves Block 8 example of a lot abutting an alley.
65
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 10 of 24
Figure 7: Blackwood Groves Block 8 lot with rear yard abutting an alley.
garage
66
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 11 of 24
Figure 8: Garage with alley access and a 6 foot rear setback.
garage
67
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 12 of 24
SECTION 2 – STAFF RECOMMENDATION AND PUBLIC HEARINGS
Having considered the criteria established for a zoning text amendment, the Staff finds the criteria
for approval of this amendment have been met and therefore, recommends approval of the
application as submitted. The Development Review Committee (DRC) considered the
amendment. The DRC did not identify infrastructure deficiencies associated with the proposed
amendment.
The Community Development Board, acting in their capacity as the Zoning Commission, will hold
a public hearing on this text amendment on May 6, 2024 and will forward its recommendation to
the City Commission on the zoning text amendment. The meeting will begin at 6 P.M. in the
Commission Room at City Hall, 121 N. Rouse Ave, Bozeman, Montana. Remote electronic
participation may also be available. Instructions for participating remotely will be included on the
meeting agenda. The agenda is available in the Events portion of the City’s website at
https://www.bozeman.net/home at least 48 hours prior to the meeting.
The City Commission will hold a public hearing on the zone text amendment on May 21, 2024.
The meeting will begin at 6 P.M. in the Commission Room at City Hall, 121 N. Rouse Ave,
Bozeman, Montana. Remote electronic participation may also be available. Instructions for
participating remotely will be included on the meeting agenda. The agenda is available in the
Events portion of the City’s website at https://www.bozeman.net/home at least 48 hours prior to
the meeting.
At the City Commission’s public hearing the City Commission may act to approve, modify, or
reject the proposal, as Ordinance No. 2161, or may continue the public hearing to another date.
The City Commission may revise the proposed amendment referred in this notice during the public
hearing process.
SECTION 3 - TEXT AMENDMENT STAFF ANALYSIS AND FINDINGS
In considering applications for approval under this title, the advisory boards and City Commission
must consider the following criteria (letters A-I) found in Section 76-2-304 of the Montana Statutes
Annotated (MCA). As an amendment is a legislative action, the Commission has broad latitude to
determine a policy direction. The burden of proof that the application should be approved lies with
the applicant.
A zone text amendment must be in accordance with the growth policy (criteria A) and be designed
to secure safety from fire and other dangers (criteria B), promote public health, public safety, and
general welfare (criteria C), and facilitate the provision of transportation, water, sewerage, schools,
parks and other public requirements (criteria D). Therefore, to approve a text amendment the
Commission must find Criteria A-D are met.
68
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 13 of 24
In addition, the Commission must also consider criteria E-I, and may find the text amendment to
be positive, neutral, or negative with regards to these criteria. To approve the zone text
amendment, the Commission must find that the positive outcomes of the amendment outweigh
negative outcomes for criteria E-I. In determining whether the criteria are met, Staff considers the
entire body of regulations for land development. Standards which prevent or mitigate negative
impacts are incorporated throughout the entire municipal code but are principally in Chapter 38,
Unified Development Code.
Where a finding of Neutral is presented, it represents that the criteria is either not applicable to the
proposed amendments or that the change does not materially advance or detract from compliance.
Therefore, a finding of Neutral is not an indication of a deficiency in the proposed amendments or
the existing standards.
Section 76-2-304, MCA (Zoning) Criteria
A. Is the new zoning text in accordance with the City’s growth policy?
Yes. Overall, this criterion is met. The Bozeman Community Plan 2020 describes planning
principles and “growth policies” listed as Themes, Goals, Objectives and Actions. As described
below, the proposed text amendment satisfies the following growth policies of the Community
Plan and staff has found no such policy that would be violated or not addressed by the proposed
zoning text amendment (ZTA). Therefore, this criterion is met.
Staff Evaluation: The proposed text amendment would apply to all lots abutting alleyways that lie
within the REMU, Residential Emphasis Mixed Use zoning districts. The REMU District is an
implementing district of the Residential Mixed Use future land use map (FLUM) designation of
the Community Plan (see Figure 4). The Residential Mixed Use designation promotes:
“neighborhoods substantially dominated by housing yet integrated with small-scale.
commercial and civic uses. The housing can include single-attached and small single-
detached dwellings, apartments, and live-work units. If buildings include ground floor
commercial uses, residences should be located on upper floor. Variation in building mass,
height, and other design characteristics should contribute to a complete and interesting
streetscape”[page 53, Community Plan].
Overall, whether the alley rear yard setback is 10-, 15- or 6-feet in depth has no bearing on the
value or utility of a home or its garage along the alley because a vehicle cannot park in the driveway
of either size setback. A minimum 5-, 6-, 10- or 15-feet setback from the alley property line would
provide (1) sufficient visual distance for a passersby motorist, pedestrian or cyclist traveling along
the alley to see/notice a vehicle backing out from a garage accessed from the alley; (2) sufficient
distance from the alley for snow storage and placement of a trash receptable on trash days; and (3)
sufficient distance for a motorist driving into or out of a garage to make one or more turning
69
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 14 of 24
movements to reach the garage or alley travelway. These are the purposes of a rear setback along
an alleyway.
How does the proposed reduced rear setback along alleys in REMU districts address the
intent of the Residential Mixed Use land use designation? The intent and purpose of the REMU
District is to establish areas within Bozeman that are mixed-use in character and to provide options
for a variety of housing, employment, retail and neighborhood service opportunities within a new
or existing neighborhood [UDC 38.300.110.F]. Alleyways within REMU districts are encouraged
and are intended to facilitate the development of a variety of types and sizes and, perhaps,
affordability, of housing.
With the purpose of an alley rear setback and the purposes of the REMU District in mind, the
reduced rear setback for lots with rear alley access positively addresses the following growth
policies of the 2020 Community Plan.
2020 Community Plan Policies
Theme 1 seeks a Resilient City: “Resilient communities rebound, positively adapt to, and thrive
amidst changing conditions or challenges and maintain quality of life, healthy growth, durable
systems and conservation of resources for present and future generations.”
Policy R-1.7: “Be flexible: willingness and ability to adopt alternative strategies in response to
changing circumstances.”
R-2.6: “Innovation: Advance new approaches and techniques that will encourage continual
improvement and advancement of best practices.”
Staff Evaluation: A reduced rear yard setback for blocks of housing with garages accessed from
an alley would represent the flexibility sought to encourage development of homes which
accommodate the “market-tastes” of a variety of households, particularly those who wish to
present an attractive urban façade to the house along the street rather than encumber the street
frontage with a garage and to those who wish to enter their homes from the rear yard.
Theme 2: A City of Unique Neighborhoods.
Goal N-1: Support well-planned, walkable neighborhoods.
Policy N-1.1: Promote housing diversity, including missing middle housing.
Goal N-3: Promote a diverse supply of quality housing units.
N-3.1: Establish standards for provisions of diversity of housing types in a given area.
N-3.7: Support compact neighborhoods, small lot sizes, and small floor plans, especially through
mechanisms such as density bonuses.
70
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 15 of 24
N-3.8: Promote the development of “Missing Middle” housing (side-by-side or stacked duplex,
triplex, live-work, cottage housing, group living, rowhouses/townhouses, etc.) as one of the most
critical components of affordable housing.
Staff Evaluation: The reduced rear setback for lots abutting an alley would facilitate a mix of
housing types and sizes in REMU neighborhoods by allowing larger building “footprints”/greater
utilization of the land for the principal house or the principal house and an Accessory Dwelling
Unit (ADU) and a garage accessed from the alley. The visual character of residential blocks that
have garages accessed by a mid-block alley may appeal to residents who wish to “present” more
attractive and personalized house designs, facades and landscaping than can be achieved with
street-facing and accessed garages. The proposed reduced rear alley setback may induce and
facilitate use of the alley to access the garage. The changed standard will further distinguish the
built environment in the REMU district from other residentially oriented districts that have
different rear setback requirements.
Theme 3: A City bolstered by Downtown and Complementary Districts.
Goal DCD-1: Support urban development within the City.
Goal DCD-3: Ensure multimodal connectivity within the City.
DCD-3.6: Evaluate parking requirements and methods of providing parking as part of the overall
transportation system for and between districts.
Staff Evaluation: The reduced rear setback for blocks with an alley would support compact
development in REMU Districts where they lie in the city. Reducing the rear setback for alley-
loaded lots would induce and facilitate greater development of such block forms. Blocks with
alleys may create more attractive pedestrian and bicycle routes through neighborhoods as there are
fewer conflicts with motor vehicles crossing the sidewalks and bike routes/lanes, than through
streets with front-facing garages.
The remaining Community Plan Themes have policies that do not speak directly to the proposed
ZTA and the proposed ZTA is neutral toward and does not negatively affect any of the remaining
policies:
Theme 4: A City influenced by our Natural environment, parks, and open lands.
Theme 5: A City that prioritizes accessibility and mobility choices.
Theme 6: A City powered by its creative, innovative and entrepreneurial economy.
Theme 7: A City engaged in regional coordination.
71
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 16 of 24
B. Will the new zoning secure the community’s safety from fire and other dangers?
Yes. This criterion is met. The current rear setback for a garage accessed from an alley in the
REMU District would have a 10- or 15-foot depth of driveway fronting the alley. No “stacked”
parking of a vehicle within the current or proposed 6-foot setback from the alley could occur.
A typical vehicle length is from 18 to 21 feet and no such vehicle can “park” in a driveway of 10
or 15 feet in length. However, many people try anyway. Experience across the City has shown that
vehicle areas should either be standard parking size or very obviously too small to park. A vehicle
entering the garage from the alleyway would likely stop the vehicle next to the garage while
awaiting the opening of an automatic garage door this would be different with a 10-foot, 15-foot
or the ZTA 6-foot rear yard setback along the alley. Other travelers along the alley would wait
their “turn” to travel the alleyway while the motorist is navigating into or out of the garage.
Vehicles are not permitted to parallel park alongside a 20- or 30-foot wide alley in order to allow
emergency vehicle access and, perhaps, solid waste disposal trucks to pass through the alleyway.
Development of garages lying 6-feet from a 20- to 30-feet wide alley would have sufficient “back
up” and turning movement area within the alley for vehicles parked within the rear yard garages
to access the alley in a safe manner. Although, a 21-foot long truck parked in a garage with a 6-
foot long driveway will likely have to engage in several turning movements in order to safely exit
the alley and may have to forego a property line fence in order to provide adequate sight visibility
for backing out of the garage. This would be true for a 10-, 15-, 6- or 5-foot setback from the alley.
C. Will the new zoning promote the public health, public safety, and general welfare?
Yes. This criterion is met. As noted above, the ZTA would allow but not require a reduced rear
yard setback of 6 feet for lots that abut an alley in the REMU District and that have a garage that
is accessed from the alley. This would allow lot owners to more fully utilize or encumber the land
area of the lot. The 6-foot minimum depth of a driveway to a garage, rather than a 10-foot or a
15-foot setback as is currently required, with greater certainty would dissuade motorists from
parking within a setback in front of an alley accessed garage, resulting in blocking passage of other
travelers along the alleyway, including emergency service vehicles. Thus, the proposed ZTA
would tend to promote or advance public health, safety and general welfare as noted in the City’s
Community Plan and in Section 38.100.040 purpose of the UDC.
D. Will the new zoning facilitate the provision of transportation, water, sewerage,
schools, parks and other public requirements?
Yes. This criterion is met. The City conducts extensive planning for municipal transportation,
water, sewer, parks, and other facilities and services provided by the City. The adopted plans for
these services and facilities allow the City to consider existing conditions and identify
enhancements needed to provide additional service needed by new development or new or reuse
of a property. The proposed text amendment does not alter any requirements or standards
associated with the provision of transportation, water, sewerage, schools, parks, and other public
requirements.
72
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 17 of 24
E. Will the new zoning provide for the reasonable provision of adequate light and air to
the affected community?
Yes. This criterion is met. Staff opines that a linear distance from a structure such as a garage to
the rear property line abutting an alley can be 6 feet without blocking light, air or privacy to REMU
zoned residential lots. The Applicant has designed their Block 8 homes with a 6-foot rear yard
setback from a garage and they wish to propose that change citywide as part of this ZTA.
F. Will the new zoning have an effect on motorized and non-motorized transportation
systems?
Yes. This criterion is met. The proposed reduced rear yard setback in REMU Districts for lots that
about an alley from the current 10- or 15-feet to 6-feet is expected to induce the development of
residential blocks with mid-block alleyways due to the possibility to make more efficient use of
the land on individual lots for buildings, rear yards and other personal space within the lot.
Neighborhoods with more blocks with alleyways would offer pedestrians and cyclists greater
choices for travel throughout the neighborhood with less traffic than through the abutting streets.
This would have a marginal effect on motorized transportation systems in REMU neighborhoods
to the extent that induces developers to provide more blocks with alleys. Blocks with alleys are
expected to facilitate safer pedestrian and bicycle travel off of busier streets.
With the smaller rear setbacks of this ZTA, developers of land in REMU Districts may perceive it
advantageous to build smaller lots that are accessed by alleyways, making more efficient use of
residential land. It is noted that neither a 10-foot, 15-foot or a 6-foot setback between a garage
and the alley will support a “stacked” parking space in the driveway. A vehicle entering or exiting
a garage accessed from a 20-foot wide alley may require several turning movements. This may
increase congestion in alleys during peak morning and evening periods when both sides of the
alley may have resident motorists engaged in multiple turning movements to get out of (in the
AM) or into their garage (in the PM). Other residents along the particular alley learn to “share” the
alley during these peak AM and PM periods or seek more flexible hours for their vehicle travels.
Parking is required for housing in the REMU District at the same rate as for other residential
districts: 1 space for 1 bedroom homes and 2 spaces for 2 or more bedroom homes. To the extent
that households have to park more vehicles than can be accommodated in the rear yard garage,
there will be increased parking congestion on area streets because parking is not permitted along
alleys. For sketch plan development which will be affected by this amendment, parking on the
street is not counted for meeting parking requirements. It is unknown whether additional resident
parking on the street fronting their house would create pedestrian congestion on local sidewalks.
A 10- or 15-foot deep setback from a garage accessed from an alley could not accommodate
“stacked” parking in the driveway but it would reduce the turning movements required to get into
or out of the alley-fronting garage. The reduced 6-foot rear alley setback is not expected to have
any additional parking congestion on the street or any additional pedestrian congestion on the
sidewalk.
73
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 18 of 24
G. Does the new zoning promote compatible urban growth?
Yes. This criterion is met. The REMU District’s intent and purpose, as noted above on pages 3
and 4, seeks to create urban, predominantly residential mixed use neighborhoods with parks, trails
and neighborhood-serving non-residential uses therein. In particular, the REMU District seeks to
(1) incorporate a wider range of housing types; and (2) provide flexibility in the placement and
design of new developments and redevelopment to anticipate changes in the marketplace. As
shown in Figures 2 and 3 above, most REMU Districts are located at the edges of the City, rather
than in the urban core or downtown. However, within each REMU neighborhood, development
provides the density, block and lot configurations, open space, streets and trails connectivity that
reflects urban development.
All REMU Districts must have an approved Master Plan which positively addresses Community
Plan growth policies. All REMU Districts create their own neighborhoods, some of which may
be lower density or suburban in character and some of which may be high density and quite urban
in character. Combined, the REMU neighborhoods must address the intent and purposes of the
District as shown on pages 3 and 4 and, in particular, to incorporate a wider range of housing types
and to provide flexibility in the placement and design of new developments to anticipate changes
in the marketplace. The reduced rear setback to 6-feet for lots abutting alleys is expected to
facilitate these objectives.
Section 38.700.040, Definitions, of the UDC offers the following definition of “compatible
development”.
“Compatible development. The use of land and the construction and use of structures
which is in harmony with adjoining development, existing neighborhoods, and the goals and
objectives of the city's adopted growth policy. Elements of compatible development include,
but are not limited to, variety of architectural design; rhythm of architectural elements; scale;
intensity; materials; building siting; lot and building size; hours of operation; and integration
with existing community systems including water and sewer services, natural elements in the
area, motorized and non-motorized transportation, and open spaces and parks. Compatible
development does not require uniformity or monotony of architectural or site design, density
or use.”
The proposed reduced rear yard setback along alleyways furthers the REMU ideas of compact,
walkable development and compatible urban growth. By allowing a 6-feet deep setback for lots
abutting alleys in all REMU Districts, it is expected that the objective of compact and walkable
residential developments would be facilitated.
H. Does the new zoning address the character of the district and its peculiar suitability for
particular uses?
Yes. This criterion is met. As noted above in Criterion H ("Does the new zoning promote the
character of the REMU district?”) the “peculiar suitability” for REMU Districts is its principle of
providing a mix of housing types in the form of compact development, with mixed uses, and
74
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 19 of 24
“complete streets” that “accommodate pedestrians, bicycles, buses, automobiles and wintertime
snow storage and work in concert with internal property accesses and adjacent development to
create a connected and vibrant public realm [UDC 38.330.020.B.1].”
Providing alleys in residential blocks provide mid-block access for pedestrian and bicycle travel
through neighborhoods, taking them off of busier streets. Providing alleys in residential blocks
provide vehicular access to private garages along the alley, resulting in the street-side façade of
homes on the block emphasizing pedestrian-scale entries, porches, landscaping and architectural
treatments that individualize each home within the typically smaller lots within the compact
development block.
A reduced rear yard setback by this ZTA application would facilitate the residential compact
development peculiarity sought by the REMU District. Having alleys with a reduced rear yard
setback of 6-feet or, even, 5-feet would facilitate development of the smaller lots that are currently
desired by housing renters and buyers. These smaller lots with alley access have garages with no
driveway “stacked” parking and, with only a 20- or 30-foot wide alley, no parking along the alley,
forcing the garage to fully contain the vehicles.
I. Is the new zoning adopted with a view to conserving the values of buildings and of
encouraging the most appropriate use of land throughout the jurisdictional area?
Yes. This criterion is met. The proposed ZTA would address new buildings rather than existing
buildings within REMU Districts. New residential lots with alley access may have a premium
value over lots without an alley due to the convenience of parking in a garage accessed by the alley
and the ability to have a more attractive front façade, entries and landscaping over homes with a
garage facing the street (snout homes). Whether the rear yard setback is 10-, 15- or 6-feet in depth
has no bearing on the value of the new home or its garage because a vehicle cannot park in the
driveway of either size setback.
The reduced rear yard setback for lots with an alley would facilitate compact development of a
variety of types of housing in REMU Districts, citywide. This would positively address the REMU
District principles and objectives. The REMU District is largely found in newly annexed areas of
the city’s edges. The City Commission carefully reviews annexation applications and
accompanying REMU District proposals to determine the REMU District’s suitability for the site,
area and the City. The Commission carefully determines that the new District, at that location,
would positively address relevant policies of the Community Plan and the intent of the REMU
District. Any future zone map amendment will likewise be evaluated for all the state zoning criteria
and, if adopted, the change in garage setback will be part of that evaluation.
75
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 20 of 24
SECTION 4 - PROTEST NOTICE FOR ZONING AMENDMENTS
In the case of written protest against the proposed ZTA, protests signed by the owners of 25% or
more of the area of the lots or units within any REMU zoned area or those lots or units within 150
feet from a lot included in REMU District, the amendment shall not become effective except by
the favorable vote of two-thirds of the present and voting members of the City Commission.
The City will accept written protests from property owners against the proposed text amendment
referred to in this notice until the close of the public hearing before the City Commission. Pursuant
to 76-2-305, MCA, a protest may only be submitted by the owner(s) of real property within the
area affected by the proposal or by owner(s) of real property that lie within city limits affected by
the proposal. The protest must be in writing and must be signed by all owners of the real property.
In addition, a sufficient protest must: (i) contain a description of the action protested sufficient to
identify the action against which the protest is lodged (including the application number, 24055);
and (ii) contain a statement of the protestor's qualifications (including listing all owners of the
property and the physical address), to protest the action against which the protest is lodged,
including ownership of property affected by the action. Signers are encouraged to print their names
after their signatures. A person may in writing withdraw a previously filed protest at any time prior
to final action by the City Commission. Protests must be delivered to the Bozeman City Clerk,
121 North Rouse Ave., PO Box 1230, Bozeman, MT 59771-1230.
APPENDIX A - BACKGROUND AND APPLICANT’S RATIONALE FOR
THE ZONE TEXT AMENDMENT
Background
In 2018, the City revised its Unified Development Code to (1) adapt to changing community needs,
(2) streamline review processes, (3) create new zoning districts, (4) implement the North 7th
Corridor Plan, (5) further implement the Growth Policy Plan, and (6) generally simplify the UDC.
The 2009 Bozeman Community Plan (previous plan) and Bozeman Community Plan 2020 (current
plan) both encourage mixed use development patterns.
In 2011, the City Commission established the new REMU (Residential Emphasis Mixed Use)
zoning district to encourage development of residential neighborhoods with neighborhood-serving
establishments as described below in the UDC Section 38.300.110.F. REMU objectives relevant
to this ZTA application are noted in bold text.
“Residential emphasis mixed-use zoning district (REMU). The intent and purpose of the
REMU district is to establish areas within Bozeman that are mixed-use in character and
to provide options for a variety of housing, employment, retail and neighborhood
76
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 21 of 24
service opportunities within a new or existing neighborhood. These purposes are
accomplished by:
1. Emphasizing residential as the primary use, including single household
dwellings, two to four household dwellings, townhouses, and apartments.
2. Providing for a diverse array of neighborhood-scaled commercial and civic uses
supporting residential.
3. Emphasizing a vertical and horizontal mix of uses in a compact and walkable
neighborhood setting.
4. Promoting neighborhoods that:
a. Create self-sustaining neighborhoods that will lay the foundation for healthy
lifestyles;
b. Support compact, walkable developments that promote balanced
transportation options;
c. Have residential as the majority use with a range of densities;
d. Provide for a diverse array of commercial and civic uses supporting
residential;
e. Have residential and commercial uses mixed vertically and/or horizontally;
f. Locate commercial uses within walking distance;
g. Incorporate a wider range of housing types; and
h. Encourage developments that exhibit the physical design characteristics
of vibrant, urban, and pedestrian-oriented complete streets.
5. Providing standards and guidelines that emphasize a sense of place:
a. Support or add to an existing neighborhood context;
b. Enhance an existing neighborhood's sense of place and strive to make it more
self-sustainable;
c. Encourage a new neighborhood commercial center(s) with a unique identity
and strong sense of place;
d. Develop commercial and mixed-use areas that are safe, comfortable, and
attractive to pedestrians; and
e. Reinforce the principle of streets as public places that encourage
pedestrian and bicycle travel, transit, on-street parking and physical
elements of complete streets.
6. Providing standards and guidelines that emphasize natural amenities:
a. Preserve and integrate the natural amenities into the development; and
b. Appropriately balance a hierarchy of both parks and public spaces that are
within the neighborhood.
7. Providing standards and guidelines that emphasize the development of centers:
a. Group uses of property to create vibrant centers;
b. Where appropriate create a center within an existing neighborhood;
c. Facilitate proven, market driven projects to ensure both long and short-term
financial viability;
77
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 22 of 24
d. Allow an appropriate blend of complementary mixed land uses including, but
not limited to, retail, offices, commercial services, restaurants, bars, hotels,
recreation and civic uses, and housing, to create economic and social vitality;
e. Foster the master plan development into a mix of feasible, market
driven uses;
f. Emphasize the need to serve the adjacent, local neighborhood and as well as
the greater Bozeman area; and
g. Maximize land use efficiency by encouraging shared use parking.
8. Promoting the integration of action:
a. Support existing infrastructure that is within and adjacent to REMU zones;
b. Encourage thoughtfully developed master planned communities;
c. Provide flexibility in the placement and design of new developments and
redevelopment to anticipate changes in the marketplace;
d. Provide flexibility in phasing to help ensure both long and short term
financial viability for the project as a whole;
9. Providing standards and guidelines that promote sustainable design.
Use of this zone is appropriate for sites at least five acres in size and areas located
adjacent to an existing or planned residential area to help sustain commercial uses
within walking distance and a wider range of housing types.”
Since 2011, several REMU Districts have been established, mostly along the outer edges of the
city (see Figures 2 and 3 above) where the Community Plan’s Future Land Use Designation Map
(FLUM) allows the REMU District to locate (see Figure 4). The REMU District is an
implementing zone for the Urban Residential, Residential Mixed Use, and Community
Commercial Mixed Use land use categories of the FLUM. As shown on the FLUM, the
Neighborhood Residential land use designation is the most abundant category. REMU, as a
comparatively new zoning district is generally located along the edges of the city. This amendment
would also apply to any future zone map amendments to REMU.
The Blackwood Groves REMU-zoned subdivision was established in 2022 and, at that time, was
at the southwestern edge of the city. Since then, several more properties have been annexed and
designated REMU.
Within the Blackwood Groves subdivision, a number of residential blocks are under construction
or have been completed and are occupied. The Applicant is currently proposing construction of
the first block within the subdivision that has a 20-feet wide mid-block alleyway abutting lots
ranging in size from 5,000 to 6,200 square feet. These lots are proposed for single-household
dwellings with garages accessed from the alley.
78
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 23 of 24
Applicant’s Rationale for the Zone Text Amendment
It is noted that the Applicant has prepared a development proposal for one of the Blackwood
Groves REMU residential blocks which feature a 20-foot wide mid-block alley. The 5,000 square
foot lots along this block feature a garage accessed from the alley with only a 6-foot rear yard
setback. The Applicant states that the 6-foot rear setback allows a more efficient use of land within
each lot. The Applicant offers the following rationale for how this reduced setback would better
accommodate the design of homes with garages on small lots [note that UDC Table 38.320.040
defines small lots as between 2,500 and 4,000 square feet in size]:
“Most commercial/mixed use districts specially call out alley setbacks, REMU doesn’t, and
this leads to confusion throughout the document and in the diagrams. Our application aims to
simplify these areas to eliminate any confusion and conflicts between the diagrams for the
REMU District.”
“Detached structures are allowed to be 6’ off the alley (if 20’ ROW) but primary structures
are required to be a minimum of 15’.”
“Our proposal is to implement a 6’ alley setback. This creates uniformity for both detached
and attached structures.”
“Having wider alleys defeats the true purpose of the alley. When alleys are wider, they tend
to encourage both higher rates of speed and more primary traffic. These two conditions
dramatically decrease the safety of the alley. Alleys are intended to be back-of-house
functions and should warrant lower rates of speed. In order to encourage this behavior alleys,
need to be tighter. This is one the reason this condition is allowed currently for detached
structures. Our intent is to allow this for primary structures as well. The Draft Proposed UDC
aims to remedy this as well. The Draft proposes a 5’ alley setback.”
• RE: REMU Section 38.300.110.F.4.b – Support compact, walkable developments that
promote balanced transportation options. “6’ alley setback is more conducive for smaller
lots thus supporting a more compact development.”
• REMU Section 38.330.020.B.1.e – on-street parking should be maximized wherever
feasible. “6’ alley setback requires parking in the garage or on-street – not wasting rear
yard space for hardscape to store vehicles.”
• REMU Section 38.330.020.B.4. Alleys. Alleys are encouraged, but not required, in the
REMU District. “Having the 6’ alley setback encourages developments to utilize more
alleys as it creates more options for lot development to provide for a variety of housing
types.”
The Applicant’s full rationale for this zoning text amendment (ZTA) can be in the application
Narrative document viewed or here or
https://weblink.bozeman.net/WebLink/Browse.aspx?id=287867&dbid=0&repo=BOZEMAN
The full application and file of record can be viewed at the Community Development Department
at 20 E. Olive Street, Bozeman, MT 59715.
79
Alley Rear Yard Setback Reduction in REMU Districts ZTA; Application 24055 Page 24 of 24
APPENDIX B - NOTICING AND PUBLIC COMMENT
Notice for text amendments must meet the standards of Bozeman Municipal Code 38.420.080 and
38.550.070 which requires legal notice publication twice in a local newspaper. Notice was
published in the Bozeman Daily Chronicle as required and contained all required elements. Notice
was provided at least 15 working days before the Zoning Commission public hearing, and not
more than 45 working days prior to the City Commission public hearing. Notice was published in
the legal notice section of the Bozeman Daily Chronicle on Sunday, April 21, 2024 and Sunday,
April 28, 2024. The City exceeded the required notice provision. Hearing dates are on the first
page of this report.
Public hearings will be held by the Community Development Board acting in their capacity as
the Zoning Commission and City Commission as noted on page 1 of this report.
How to comment:
The purpose of the public hearings is to consider the proposed amendment as requested by the
applicant, Blackwood Land Group, 115 West Kagy Blvd, Suite L, Bozeman, MT 59715. The City
invites the public to comment in writing and to attend the public hearings regarding compliance of
this application with the required criteria. Comments should identify the specific criteria of
concern along with facts in support of the comment. During the notice period the City will continue
review for compliance with applicable regulations. Written comments may be directed to by email
to comments@bozeman.net or by mail to the City of Bozeman, Department of Community
Development, PO Box 1230, Bozeman, MT 59771-1230. Please reference application 24055 in
all correspondence.
For those who require accommodations for disabilities, please contact Mike Gray, City of
Bozeman ADA Coordinator, 582-3232 (voice), 582-3203 (TDD).
To date, no public comment has been received on this application. Any comments received on this
application can be reviewed at the following link by scrolling down to Project No. 24055.
https://weblink.bozeman.net/WebLink/Browse.aspx?id=269857&dbid=0&repo=BOZEMAN
APPENDIX C - APPLICANT INFORMATION AND REVIEWING STAFF
Applicant: Bridger Land Group, c/o Grant Syth
Representatives: Tyler Steinway, Intrinsik Architecture
Report By: Susana Montana, Senior Planner, Community Development Department
FISCAL EFFECTS
No unusual fiscal effects have been identified. No presently budgeted funds will be changed by
this Amendment.
80
ALLEY SETBACK ZONE TEXT AMENDMENT
January 2024
81
January 2024 2
Table of Contents
Narrative
I. Project Overview
II. Response to Zone Map Amendment Approval Criteria
Appendices
Appendix A – Code Sections Marked Up
Appendix B – Edited Code Sections Clean
82
January 2024 3
1. Project Team
Owners & Applicant:
Bridger Land Group
Attn: Grant Syth
115 West Kagy Boulevard, Suite L
Bozeman, MT 59715
Email: Grant@bridgerlandgroup.com
Representative:
Intrinsik Architecture, Inc
Attn: Tyler Steinway
106 East Babcock Street, Suite 1A
Bozeman, MT 59715
Ph: 406.582.8988
Email: tsteinway@intrinsikarchitecture.com
83
January 2024 4
Project Narrative
Executive Summary
The project team is submitting a Zone Text Amendment Application to update the Alley Setbacks for
attached single household structures in REMU to a logical configuration that will simplify and make the
current code easier to understand .
Project Description
The Applicant is requesting to add a row to the form and intensity table for the REMU zoning district to
align with the growth policy and to clean up the existing UDC. Currently, the UDC does not specify any
alley setback standards in the REMU Zoning District like several of the commercial zoning districts do.
Not including this alley setback requires applicants to rely on other zoning standards that muddy the
waters on what is required. This is remedied in the new Draft Development Code, but due to the
uncertainty of when that will be adopted, this ZTA has been submitted. This standard affects projects
that are being planned and some that are currently under review.
When evaluating the rear yard setback for properties along an alley, there are several standards in the
Code that allow the setback requirements to vary slightly, which leads to confusion.
The intention with this ZTA is to simplify these standards.
The existing code sections in contemplation are:
- Table 38.320.040. – Rear Yard Setback for single households up to apartments is 15’.
- 38.360.030.I.b – Detached Structures Setback Requirements
Accessory structures greater than 120 square feet but less than or equal to 600 square feet in
footprint may not be located in any front, side, or corner-side setback. The accessory structure
must be set back a minimum of either:
a. Six feet, or
b. When parking is provided between the structure and the rear property line, 20 feet
except when required parking spaces need a greater setback for back-up
maneuverability.
See the following examples:
Alley Right-of-Way Width Setback for Garage without
Stacked Parking
Setback for a Garage with
Stacked Parking Off of an
Alley
30 feet 6 feet 20 feet
20 feet 6 feet 24 feet
16 feet 8 feet 28 feet
14 feet 10 feet 30 feet
84
January 2024 5
- Accessory structures greater than 600 square feet may not be located in any required front or
side setback, or in a rear setback when no alley is present. Adequate back-up maneuverability
for required parking spaces must be provided.
- Accessory structures greater than 600 square feet may be located in required rear setbacks
when an alley is present and must provide adequate backup maneuverability for required
parking spaces.
- Figure 38.360.220.E :
To summarize, on one hand it appears the current code requires a 15’ rear yard setback for the primary
structure but the standards listed 38.360.030.I.b. allow for a situation where a detached structure is only
6’ off the alley. Furthermore, the diagram included as Figure 38.360.220.E (above) outlines a situation
where the primary structure only has a 6’ setback off an alley. The crux of the discrepancy relies on the
difference between the primary structure and detached structures. Detached structures, because they
are not physically attached to the main structure, are allowed to be 6’ from the alley, while primary
structures adjacent to the alley must be a required 15’ off the alley.
It has been argued that the reason for the difference in standards is to break down the massing of a
building but the new Draft Development Code looks to simplify this section and allow for the a 5’ alley
setback. There are other standards in the current UDC such as required open space that address
massing. Finally, separating the garage from the main house on smaller lots does little to break down
the massing because both structures can be similar size and ultimately results in less backyard privacy.
85
January 2024 6
Our request to amend the code also implements one of the proposed changes early, allowing for the
construction of homes sooner.
Requiring wide setbacks along alleys defeats the true purpose of the alley. Alleys are intended to be
narrower for providing access to the rear of the lots. When there is a drastic setback from the alley, it
encourages higher speeds and short cuts from streets. These areas that are intended for back of house
functions and access should be narrow to limit non-residents from using that as a means of
transportation.
It should also be mentioned that the pausing of the new Development Code resulted in several
applications being delayed. While it was done at risk, several alleys loaded lots in Blackwood Groves
were designed utilizing the detached garage setback of 6’. Without this ZTA the building permit
applications that are under review cannot be approved without either significant redesign or waiting for
the new code. This ZTA is looking to remedy this and allows housing units to be built now.
Responses to ZTA Approval Criteria
Below are responses to the ZTA Approval Criteria (Section 76-2-304, MCA) that address how the project
relates to and meets the criteria outlined for the approval of a zone change.
a. Is the new zoning designed in accordance with the growth policy? How?
Yes. The Future Land Use Map in the Bozeman Community Plan 2020 designates the property as
Residential Mixed Use. The intent of Residential Mixed Use is to promote neighborhoods that are
primarily comprised of residential uses that vary in type, scale, and form, while simultaneously
allowing for small-scale commercial and civic uses to support these primary residential
components. This property is zoned REMU, which is consistent with the Community Plan vision
for the Residential Mixed-Use designation.
The purpose of this proposed change is to establish criteria for residential alley setbacks, which
will establish a protocol that ensures that the residential components properly mesh with the
other allowed uses in communities with this zoning designation. This proposed ZTA is consistent
with several goals and objectives of the community plan including:
Goal DCD-1 Support urban development within the city
DCD-1.2 Remove regulatory barriers to infill
N-3.7 Support Compact neighborhoods, small lot sizes and small floor plans, especially through
mechanisms such as density bonuses.
R-1.7 Be flexible: willingness and ability to adopt alternative strategies in response to changing
circumstances.
86
January 2024 7
R-2.6 Innovation: Advance new approaches and techniques that will encourage continual
improvement and advancement of best practices.
Amending the current UDC to align with the proposed Development Code will allow for projects
to move forward quicker and will allow for infill housing to be constructed now. This change will
allow for the development of at least 20 homes in Blackwood Groves alone. This change will also
allow for more urban development to happen within the city. Allowing for structures to be closer
to the alley, will increase the spatial enclosure which helps to reinforce the road hierarchy and
re-establish alleys as secondary accesses that are primarily intended for the adjacent lot owners
to use for access to their property. This will help discourage normal vehicular traffic through
alleys, which in turn, will encourage non-motorized transportation users like bicyclists and
pedestrians to use alleys more. This change will simplify the UDC ahead of the New Development
Code and will allow align with the goals of more flexibility and improvement/advancement of
best practices.
b. Will the new zoning secure safety from fire and other dangers? How?
Yes. This Zone Text Amendment will have no effect on safety from fires or other dangers. This
change was contemplated in the Draft Development Code. Also, it is allowed in other zoning
designations and for accessory structures. This shall have no effect on fire safety. Finally any
proposed structure will have to comply with the adopted building & fire codes which adequately
address fire safety.
c. Will the new zoning promote public health, safety and welfare? How?
Yes. The proposed Zone Text Amendment will promote health, safety and welfare by increasing
transportation safety in alleys. The proposed Zone Text Amendment would allow for attached
structures to abut alleys more closely. This increased spatial enclosure helps to reinforce the road
hierarchy and re-establish alleys as secondary accesses that are primarily intended for the
adjacent lot owners to use for access to their property. This will help discourage normal vehicular
traffic through alleys, which in turn, will encourage non-motorized transportation users like
bicyclists and pedestrians to use alleys more. The increased presence of non-motorized
transportation users accessing alleys will also discourage motorists to decrease their rates of
speed.
d. Will the new zoning facilitate the adequate provisions of transportation, water, sewage, schools,
parks and other public requirements? How?
Yes. This Zone Text Amendment will have no impact on the current provisions of transportation,
water, sewage, schools, parks or any other public requirements. As previously stated, this
proposed Zone Text Amendment is proposing what is currently allowed in other zoning
designations and is being brought forth to provide clarity to the rules and regulations of
residential uses within the REMU Zoning District.
87
January 2024 8
e. Will the new zoning provide reasonable provision of adequate light and air? How?
Yes. This proposed change will only have an effect on alley setbacks; therefore, primary private
& public spaces will remain unchanged. The proposed changes will have no impact on any
aspects of the design, function, or appearance of streets, street frontage, open space, or parks.
This absence of impact includes the aspects of light and air adequacy. Additionally, the proposed
change would allow for conditions that are already found elsewhere throughout the City in other
zoning districts, which indicates that the conditions that this change would allow for have
already been found to reasonably provide adequate light and air.
f. Will the new zoning have an effect on motorized and non-motorized transportation systems? How?
Yes. The proposed Zone Text Amendment would allow for the space between structures that
abut alleys to become smaller. This increased spatial enclosure will help to visually establish
alleys as secondary rights-of-way to streets. This will discourage vehicular traffic in alley ways by
non-residents, by increasing the notion of privacy and reduced speed. With this reduction in
vehicular traffic, alleys will become safer and more inviting to non-motorized transportation
users like bicyclists and pedestrians. While presence of alleys allows property owners to access
their property via the rear, preserving street-fronting building appearances, increased safety for
non-motorized transportation users in alleys unlocks another purpose of these rights-of-way; to
break up block lengths & make neighborhoods more walkable. Providing more viable
transportation for non-motorized transportation users will benefit all transportation users, as the
risk for incidents between motorized and non-motorized will decrease.
g. Does the new zoning promote compatible urban growth? How?
Yes. Stated intent and purpose of the REMU Zoning District is “To establish areas within
Bozeman that are mixed-use in character and to provide options for a variety of housing,
employment, retail and neighborhood service opportunities within a new or existing
neighborhood. These purposes are accomplished by:”
b. Support compact, walkable developments that promote balanced transportation options;
h. Encourage developments that exhibit the physical design characteristics of vibrant, urban, and
pedestrian-oriented complete streets.
5.d. Develop commercial and mixed-use areas that are safe, comfortable, and attractive to
pedestrians;
5.e. Reinforce the principle of streets as public places that encourage pedestrian and bicycle
travel, transit, on-street parking and physical elements of complete streets.
The proposed Zone Text Amendment only furthers these ideas of compact, walkable
development and compatible urban growth. The ability to build a structure 6’ off an alley already
exists with detached garages, our intention is to allow this for attached garages to which would
have no impact on these goals or the ability to promote compatible urban growth. Finally, the
new Development Code aims to make a similar change.
88
January 2024 9
h. Does the new zoning promote the character of the district? How?
Yes. The City of Bozeman’s Unified Development Code states that one of the REMU Zoning
District’s intended purposes is to “Support compact, walkable developments that promote
balanced transportation options”. The current residential alley setback standards in this zoning
district are contrary to this stated goal. By allowing for a smaller alley setback for all structures
in REMU, it will allow for more compact walkable developments.
i. Does the new zoning address the affected area’s peculiar suitability for particular uses? How?
No. This Zone Text Amendment will not affect the permitted uses. The request is to modify the
setback requirements to eliminate confusion and harmonize the code.
j. Was the new zoning adopted with a view of conserving the values of buildings? How?
Yes. This proposal should have no effect on the value of buildings. The request won’t
substantially change anything that would affect the values of buildings.
k. How does the new zoning encourage the most appropriate use of land throughout the jurisdictional
area?
Yes. As stated above, this property has been planned for Residential Mixed Uses & densities for
many years. The Community Plan illustrates the most appropriate uses of land through the
future land use map. The future land use map category in this case identifies these parcels as
Residential Mixed Uses as the most appropriate type of development for this property. The
REMU zoning district successfully implements this Residential Mixed-Use vision. The proposed
changes won’t result in any changes to the already approved permitted uses.
89
Version February 2023
Ord. 2161
Page 1 of 7
ORDINANCE 2161
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA AMENDING TABLE 38.320.040 OF CHAPTER 38 OF THE BOZEMAN
MUNICIPAL CODE TO REDUCE THE REAR YARD SETBACK FOR ALLEY-
ABUTTING LOTS LYING WITHIN REMU (RESIDENTIAL EMPHASIS MIXED USE)
DISTRICTS CITYWIDE.
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, the City of Bozeman has adopted and
is hereby relying upon its self-government powers recognizing pursuant to Montana law such self-
government powers must be liberally construed in favor of such power; and
WHEREAS,pursuant to Chapter 38, Section 38.260.010.A of the Bozeman Municipal
Code (BMC), the Bridger Land Group submitted application number 24055 for a specific zoning
text amendment for Table 38.320.040 to reduce the rear yard setback for lots that abut alleyways
lying within a Residential Emphasis Mixed Use (REMU) District; and
WHEREAS,pursuant to BMC Section 38.260.020, upon receipt of such application, the
Community Development Department initiated the required investigation of facts bearing on such
proposed amendment to ensure that the action is consistent with the intent and purposes of Chapter
38, Section 38.100.040 to protect health, safety and general welfare; and
WHEREAS,pursuant to Sections 38.220.420 and 38.260.030, public notice of the May 6,
2024 public hearing on the proposed amendment before the Bozeman Zoning Commission and of
the May 21, 2024 public hearing before the Bozeman City Commission was given by publication
in a general circulation newspaper on April 21, 2024 and April 28, 2024, which is not less than 15
or more than 45 calendar days prior to the public hearings; and
WHEREAS, after proper notice, the Community Development Board, acting in their
capacity as the Bozeman Zoning Commission, held a public hearing on May 6, 2024 to receive
90
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 2 of 7
and review all written and oral testimony on the proposed amendment and offer their
recommendation to the City Commission; and
WHEREAS, the Community Development Board in their capacity as Bozeman Zoning
Commission recommended to the Bozeman City Commission that Ordinance 2161, be approved
as proposed; and
WHEREAS, after proper notice, the City Commission held its public hearing on May 21,
2024, to receive and review all written and oral testimony on the proposed amendments; and
WHEREAS, the City Commission has reviewed and considered the applicable
amendment criteria established in Montana Code Annotated § 76-2-304, and found that the
proposed amendments are in compliance with the criteria; and
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 City adopted a growth policy, the Bozeman Community Plan 2020, by Resolution
5133 to establish policies for development of the community including zoning;
2. The Bozeman Community Plan 2020, Chapter 5, sets forth the policies by which the City
reviews and applies the criteria for amendment of zoning established in 76-2-305, MCA;
3. Zoning, including text amendments, must be in accordance with an adopted growth policy;
4. A staff report analyzing the required criteria for a zone text amendment, including
accordance to the Bozeman Community Plan 2020, has found that the required criteria are
satisfied;
5. The two required public hearings were advertised as required in state law and municipal
code and all persons have had opportunity to review the materials applicable to the
application and provide comment prior to a decision;
6. The Bozeman Zoning Commission has been established as required in state law and
conducted their required public hearing; and after consideration of application materials,
staff analysis and report, and all submitted public comment recommended approval of the
application.
7. The City Commission conducted a public hearing to provide all interested parties the
opportunity to provide evidence and testimony regarding the proposed amendment prior to
the City Commission acting on the application.
8. The City Commission considered the application materials, staff analysis and report,
Zoning Commission recommendation, all submitted public comment, and all other relevant
information.
9. The City Commission determines that, as set forth in the staff report and incorporating the
91
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 3 of 7
staff findings as part of their decision, the required criteria for approval of the proposed
Bozeman Unified Development Code (UDC) Table 38.320.040 text amendment to reduce
the rear yard setback for lots within the REMU District which abut an alley have been
satisfied.
92
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 4 of 7
Section 2
Table 38.320.040—Form and Intensity Standards of the Residential Emphasis Mixed Use
(REMU) Districts—Minimum-Maximum Setbacks (feet)—shall be amended to read as follows
with all other elements of the table and footnotes remaining unchanged:
Standard Small-lot
single-
household
Single-
household
Townhouse/
rowhouse
townhouse/
rowhouse cluster1
Two to four
household
dwellings,
group living,
apartments
Mixed use
(residential
over
commercial)
Non-
residential
…
Minimum-Maximum Setbacks (feet)(38.320.020.E)
(where only one number is shown in the column, there is no "maximum" setback)
Front Setback
(minimum and
maximum)
10-15 10-15 10-15 10-15 Note7 Note8
Setback to an
individual
garage
oriented to
the street
2011 2011 2011 ———
Rear Setback 10 15 10 10 ——
Rear Setback
Adjacent to
an Alley
6’6’6”6”____
Side Setback 59 59 510 5 ——
Garages and Special Parking Standards
Residential
garages
Note12 Note12 Note12 Note12 Note12 —
Special
Parking
Standards
———Note13 Note6,13,14 Note6,13,14
93
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 5 of 7
Notes:
…
12.Special garage standards for single to four-household uses. To ensure that the subject housing types
contribute to a community-oriented, pedestrian-friendly streetscape, they must comply with the
following specific standards of this chapter:
a.Section 38.350.070, parking and garages for single to four-household residential uses.
b.Section 38.400.090.C.2.a, drive access requirements—residential.
c.Section 38.540.010.A.4, stacking of off-street parking spaces.
d.Section 38.540.010.A.5, no parking permitted in required front or side setbacks.
e.Section 38.540.010.A.6, parking permitted in rear setbacks.
…
Section 3
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 4
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 5
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.
94
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 6 of 7
Section 6
Codification.
The provisions of Section 2 of this Ordinance shall be codified as appropriate in the
Bozeman Municipal Code.
Section 7
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 21st day of May, 2024.
____________________________________
TERRENCE CUNNINGHAM
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
____________________, 2024. The effective date of this ordinance is ______________, 2024.
_________________________________
TERRENCE CUNNINGHAM
Mayor
95
Ordinance No. 2161, Amend Residential Emphasis Mixed Use Rear Yard Setback
Page 7 of 7
ATTEST:
_______________________________
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
96