HomeMy WebLinkAboutAffordable Housing Ordinance DRAFT for CDBDRAFT 12 21 24 for Community Development Board
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ORDINANCE 2025-###
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA TO REPEAL AND REPLACE DIVISION 38.380 OF THE BOZEMAN
MUNICIPAL CODE FOR AFFORDABLE HOUSING; ESTABLISH A 50 YEAR
AFFORDABILITY PERIOD; AMEND SECTION 38.540.050.A.1.B.(1) FOR PARKING
STANDARDS; AMEND 38.700.170 DEFINITIONS TO AMEND THE DEFINITION OF
AFFORDABLE HOME, REPEAL THE DEFINITION OF AFFORDABLE HOUSING,
AND REPEAL THE DEFINITION OF YIELD STREET.
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, and 76-3-102; and
WHEREAS, the Economic Vitality Board held a public meeting on December 4, 2024, and, by a
unanimous vote of 6 to 0, recommended to the Bozeman City Commission that the policy
modifications included in the staff memorandum for the proposed amendments to the affordable
housing ordinance be approved with the provisions that: (a) Incentive Types B and C have
minimum parking requirements; and (b) that the 60 percent Area Median Income (AMI) affordable
rental rates be reviewed every three years and be established based on the current AMI and other
relevant metrics and housing needs data; and
WHEREAS, after proper notice, the Community Development Board, acting in their role as the
City’s zoning commission, held a public hearing on January 13, 2025, to consider the proposed
amendments and made a recommendation to the City Commission that the amendments included
in this ordinance be _______________; and
WHEREAS, after proper notice, the City Commission held its public hearing on January 28, 2025,
to receive and review all written and oral testimony on the proposed amendment to the zoning
regulations; and
WHEREAS, the City Commission has reviewed and considered the recommendations of advisory
bodies, including the zoning commission, public comment, the staff report, all information
presented, and all applicable zoning text amendment criteria established in Montana Code
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Annotated § 76-2-304 and finds the proposed amendments are [insert determination whether
consistent with] the criteria.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY
OF BOZEMAN, MONTANA:
Section 1
Legislative Findings
The City Commission hereby makes the following findings in support of adoption of this
Ordinance:
1. The City’s 2018 Strategic Plan affirms that affordable housing is one of the city’s main
strategic goals, stating in Goal 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.”
2. The City’s 2019 Community Housing Needs Assessment finds additional housing, and more
diversity in housing, is needed at prices residents can afford. The Needs Assessment also
determined the city needs housing that provides choices, supports the ability to move to new
locations as life circumstances change, and the ability for employers to fill jobs, recruit and
retain employees.
3. The Bozeman Community Plan 2020 acknowledges that zoning and land use regulations are
processes that influence the cost of housing. The Community Plan supports housing regulations
that allow for a range of housing types intermixed in a given neighborhood, denser
development, and efficiencies of various types that can help reduce housing costs.
4. The Bozeman Community Plan 2020 establishes goals, objectives and policies to increase the
supply of affordable housing in the city including: Goal N-3, Policy N-3.3, which encourages
the “distribution of affordable housing units throughout the city with priority given to locations
near commercial, recreational and transit assets;” Policy N-3.8, which encourages the City to
“promote the development of “Missing Middle” (side by side or stacked diplex, triplex, live-
work, cottage housing, group living, rowhouses/townhouses, etc.) as one of the most critical
components of affordable housing;” Policy M-1.12, which seeks to “eliminate parking
minimum requirements in commercial districts and affordable housing areas and reduce
parking minimums elsewhere, acknowledging that demand for parking will still result in new
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supply being built;” and Policy EE-1.4, which seeks to “support employee retention and
attraction efforts by encouraging continued development of affordable housing in close
proximity to large employers.”
5. The Bozeman Community Plan 2020 encourages compact, contiguous development and infill
development to achieve efficient use of land and infrastructure and reduce urban sprawl.
6. The 2020 Community Housing Action Plan defines community housing as: “homes those who
live and work in Bozeman can afford to purchase or rent. This includes apartments,
townhomes, condominiums, emergency shelters, accessory dwelling units, mobile homes and
single dwelling homes – all dwelling types – serving the entire spectrum of housing needs.”
7. The 2024-2028 Community Development Block Grant (CDBG) Consolidated Housing Plan
reinforced the issues identified in the 2019 Community Housing Needs Assessment, including
increasing and preserving affordable rental opportunities as a top need in the community.
8. The Consolidated Housing Plan found that, in 2020, the rental vacancy rate was two percentage
points below what is considered healthy for a market with adequate supply, underscoring the
tightness in Bozeman’s rental market. Nearly 5,300 renters in Bozeman are cost-burdened and
1,880 homeowners are cost-burdened.
9. The City of Bozeman 2024-2028 Fair Housing Plan found that land development regulations
that increase development costs make residential development overly expensive and can limit
the supply of affordable housing. In some communities, this has a direct impact on racial and
ethnic minorities, larger households and families with children, and persons living with
disabilities because these groups are disproportionately represented among those residing in
lower cost housing. Limits or prohibitions on multifamily housing or restrictions on household
occupancy are examples of how land development codes can negatively affect the groups
protected under the Fair Housing Act.
10. According to the 2024 Point-in-Time (PIT) Count, 409 individuals are experiencing homeless
in Bozeman, which equals 20% of all residents experiencing homelessness in the State of
Montana. Homelessness is increasingly related to rapidly rising rental housing costs relative to
incomes, limited and low production of affordable housing units, and limited resources to serve
low-income households.
11. The City has, through multiple iterations of its land use regulations spanning decades, made
revisions to its development standards to support production of housing including: reducing
land area per dwelling requirements, authorizing accessory dwellings in all residential zoning
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districts, authorizing mixed-use buildings and apartment buildings in the majority of non-
residential districts, reducing parking requirements, capping dedication of parkland, zoning the
majority of residential areas for multiple dwelling buildings, limiting short term rentals to
prevent diversion of units from the housing stock, increasing building heights in all residential
districts, simplifying review processes, providing for concurrent construction of infrastructure
and housing, and creating by-right approvals for regulatory compliant developments, among
other actions.
12. The City facilitates housing development by undertaking comprehensive planning for land use,
facilities, and services necessary to support housing development, and by establishing a capital
improvement program to support timely installation of infrastructure which reduces delays in
the ability to plat subdivisions and complete other development.
13. In 2021, the Montana State Legislature prohibited the City from adopting regulations that
require housing fees or the dedication of real property for the purposes of providing housing
for specified income levels or sale prices. As a result of the passage of HB 259, IN 2022, the
City adopted Ordinance 2105 to replace prior affordable housing requirements by offering
incentives to property owners and developers willing to construct housing at levels of
affordability consistent with the housing needs and goals identified in the Community Plan,
the Community Housing Needs Assessment, and the Community Housing Action Plan.
14. According to the 2023 Bozeman Economic and Market Update, the increase in housing prices
has significant implications for affordability, workforce attraction and retention, and quality of
life.
15. Insufficient affordable housing supply within the city negatively impacts economic vitality,
transportation networks, and sustainability. Affordable housing needs must be addressed to
maintain a sufficient resident workforce in all fields of employment, and to ensure public safety
and general welfare of city residents. According to the 2023 Bozeman Economic and Market
Update, 7,400 households are at or below 60% of the area median income yet Bozeman only
currently has 1,517 units of income restricted housing.
16. This Ordinance aims to create more housing options across the spectrum of need, more
innovative and diverse development projects, dynamic and resilient neighborhoods, and to
improve land use and public infrastructure efficiency.
17. This Ordinance is adopted pursuant to City’s self-governing powers, the city’s zoning
authority, and the city’s police power to protect public health, safety, and general welfare. The
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incentives codified in this Ordinance will advance the City’s efforts to provide more housing
diversity at prices that residents can afford.
18. The staff report accompanying this Ordinance found the required criteria for a zoning code text
amendment are satisfied, including that the Ordinance substantially complies with the 2020
Community Plan.
19. The City Commission determines the incentives provided in this Ordinance are compatible and
consistent with all other provisions of Chapter 38 of the Bozeman Municipal Code.
20. The City Commission further determines the housing developed through the use of the
incentives of this Ordinance will be compatible with existing and future uses and development
in the City.
21. The required public hearings were advertised more extensively than required in state law and
municipal code by publication in the Bozeman Daily Chronicle and the City of Bozeman’s
Engage Bozeman website, and all persons had the opportunity to review the applicable
materials and provide comment prior to a final decision.
22. The Bozeman Community Development Board acting as the City’s zoning commission
conducted its public hearing according to state law and, after considering application materials,
staff report, and all submitted public comment, recommended to the City Commission that this
ordinance [insert the finding of the Community Development Board].
23. The City Commission conducted a public hearing to provide all interested parties the
opportunity to provide comment regarding this ordinance prior to the City Commission acting
on the application.
24. The City Commission considered the application materials, staff analysis and report, zoning
commission recommendation, all submitted public comment, and all other relevant
information.
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Section 2
That Division 38.380 (Affordable Housing) of the Bozeman Municipal Code is repealed in its
entirety and replaced to read as follows:
“Division 38.380. - Affordable Rental Housing
Sec. 38.380.010. - Purpose
A. The purpose of this division is to promote the public health, safety, and welfare by
incentivizing increased production of affordable rental housing to meet the needs of city
residents and businesses and the goals of the adopted growth policy and the community
housing action plan and to maintain the affordability of housing.
B. The purpose of this division is also to provide regulatory incentives to ensure housing
affordability in new development and redevelopment. The incentives in this division
require affordable rental rates and provide for an increase in the amount of affordable
housing provided as a landowner increases the use of the incentives. The greater the
incentives being requested the greater the affordability required.
Sec. 38.380.020. - Applicability and Affordability Requirements
A. The incentives in this division supersede the applicable standards otherwise provided in
this chapter. All other provisions of this chapter remain applicable. The city retains the
authority to approve, approve with conditions, or deny an application based on compliance
with other portions of this code but may not attach conditions to an approval that have the
effect of negating the incentives provided in this division. The incentives in this division
are in addition to the departures for housing creation provided in 38.320.070.
B. The incentives in 38.380.040 may be approved in conjunction with a preliminary plat,
master site plan, or site plan, that:
1. Contains or will contain dwellings that will be offered for rent or lease; and
2. Provides at least the minimum percentages of affordable dwellings in the
development at rental rates affordable at no more than the maximum percentages
of the area median income (AMI) established in Tables 38.380.020-1, 2, and 3 of
this division.
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C. Tables 38.380.020-1, 2, and 3 provide the required percentage of affordable dwellings, the
affordability thresholds, and the duration of the affordability period for the types of housing
to be constructed in a development in reliance on incentives:
Table 38.380.020-1
Affordable Dwellings Required with Type A Incentives
Type of Housing Minimum Percentage
of Dwellings
Maximum AMI
Percentage for
Rentals
Duration of
Affordability Period
Single-Household
Detached Dwelling
≥ 5% of Dwellings 80% of AMI ≥ 50 Years
Single-Household
Attached Dwelling
(Rowhouses and
Townhouses)
≥ 5% of Dwellings 80% of AMI ≥ 50 Years
Multi-Household
Dwelling
≥ 5% of Dwellings at
or
≥ 8% of Dwellings at
60% of AMI or
80% of AMI
≥ 50 Years
Table 38.380.020-2
Affordable Dwellings Required with Type B Incentives
Type of Housing Minimum Percentage
of Dwellings
Maximum AMI
Percentage for
Rentals
Duration of
Affordability Period
Single-Household
Detached Dwelling
≥ 50% of Dwellings 80% of AMI ≥ 50 Years
Single-Household
Attached Dwelling
(Rowhouses and
Townhouses)
≥ 50% of Dwellings 80% of AMI ≥ 50 Years
Multi-Household
Dwelling
≥ 50% of Dwellings 60% of AMI ≥ 50 Years
Table 38.380.020-3
Affordable Dwellings Required with Type C Incentives
Type of Housing Minimum Percentage
of Dwellings
Maximum AMI
Percentage for
Rentals
Duration of
Affordability Period
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Single-Household
Detached Dwelling
≥ 50% of Dwellings 80% of AMI ≥ 50 Years
Single-Household
Attached Dwelling
(Rowhouses and
Townhouses)
≥ 50% of Dwellings 80% of AMI ≥ 50 Years
Multi-Household
Dwelling
≥ 50% of Dwellings 60% of AMI ≥ 50 Years
D. Each affordable dwelling must be maintained as affordable pursuant to the adopted
affordable housing plan and the compliance document required pursuant to 38.380.030 for
no less than fifty (50) years. The affordability period begins to run at the issuance of a
certificate of occupancy for each building wherein affordable dwellings are provided. For
subdivisions that rely on an incentive, the affordability period does not begin at the time
final plat is recorded; rather, the affordability period for each affordable dwelling begins at
the time each affordable dwelling in the subdivision receives a certificate of occupancy.
E. For the entire affordability period, except for adjustments as may be authorized pursuant
to 38.380.070.A, an affordable dwelling must be rented only to persons whose household
income is verified to not exceed the applicable AMI thresholds.
F. An applicant may provide all or a portion of the required affordable dwellings on a site
other than the site or parcel where the incentives are applied only if the affordable dwellings
will be provided in the same development.
G. Accessory Dwelling Units (ADU), short term rentals, and group living are not eligible to
be used as affordable dwellings and cannot be considered as qualifying affordable
dwellings.
H. The following applies to previously approved annexations, subdivisions, or site plans that
request to provide affordable dwellings in exchange for incentives as provided in this
division:
1. A previously annexed but undeveloped parcel of land, a subdivision that has
received final plat, or an approved site plan that received final approval prior to
[insert effective date of enabling ordinance] and that has not previously received
an incentive in return for commitments to provide affordable housing, may apply
for the incentives in this division. The application for the previously undeveloped
parcel must comply with the standards and procedures of this division.
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2. Only the portion of the amended plat or site plan application, including associated
code standards and conditions of approval, pertaining to the request for approval of
one or more incentives will be subject to amended plat or site plan review.
I. Assumptions and Calculations.
1. All references to area median income (AMI) are to the most recent AMI values for
the city established by the U.S. Department of Housing and Urban Development
(HUD). As HUD publishes updated AMI values, the values are immediately
effective without further action by the city. The city may establish administrative
rules and procedures for application and implementation of AMI in calculating
maximum rental rates.
2. The maximum rental rates of an affordable dwelling are based on the AMI of a
household and corresponding number of bedrooms within each affordable
dwelling. The following establishes the maximum rental rate of each bedroom type
based on the correlation between the number of bedrooms with the corresponding
area median household income:
a. Efficiency unit: AMI for a one-person household;
b. One-bedroom dwelling: AMI for a two-person household;
c. Two-bedroom dwelling: AMI for a three-person household; and
d. Three-bedroom unit or larger: AMI for a four-person household.
3. If the calculation of the required number of affordable dwellings results in a fraction
of an affordable dwelling, the developer must construct affordable dwellings equal
to the next lower integer and either provide a cash-in-lieu payment for the additional
fractional amount or construct an additional affordable dwelling.
4. Income averaging of the rental rates for affordable dwellings is allowed. Income
averaging allows an applicant to establish affordable dwelling rental rates so the
average rental rate for all affordable dwellings in a development meets the required
AMI level. The city may establish administrative rules and procedures to
implement income averaging. As an alternative, the applicant may use an income
averaging procedure adopted by the Montana Board of Housing or the U.S.
Department of Housing and Urban Development (HUD).
Sec. 38.380.030. - Affordable Housing Plan Required
A. For a development authorized pursuant to 38.380.020.B to request incentives under this
division the applicant must submit an affordable housing plan at the time of submittal of
the application for preliminary plat, master site plan, or site plan. The affordable housing
plan, upon approval of the development, controls the rental rates and occupancy by income
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verified persons of all affordable dwellings within the development for the entire
affordability period.
B. A subdivision preliminary plat, master site plan, or site plan that requests incentives may
not receive approval for the development until the affordable housing plan has been
approved.
C. The affordable housing plan may be approved if the plan is in compliance with the
standards and criteria in this division, including but not limited to the standards in
38.380.020 and any administrative procedures related to this division.
D. An approved affordable housing plan binds the applicant and the applicant's successors in
interest to comply with the plan for the duration of the affordability period. The approved
affordable housing plan must be incorporated into a recorded restrictive covenant, deed
restriction, or other document (referred to as the compliance document) acceptable to the
city attorney, which implements the affordable housing plan. The compliance document
must be recorded in the records of the Gallatin County Clerk and Recorder as follows:
1. For subdivisions where the incentives were requested and approved as part of the
preliminary plat, the compliance document must be recorded with the final plat;
and
2. For site plans, unless a compliance document was recorded with the subdivision,
the compliance document must be recorded prior to the issuance of a building
permit. The affordability period begins on the date of issuance of a certificate of
occupancy.
E. Contents of an Affordable Housing Plan.
1. A description of the requested incentives in 38.380.040.
2. The applicable AMI and maximum rental rates applicable to each affordable
dwelling.
3. The total number of affordable dwellings, and market-rate dwellings in the
development.
4. A narrative describing how the applicant will ensure the rental of the affordable
dwellings is only to income verified people for the duration of the affordability
period. In addition, the narrative must describe the management system the
applicant will use to meet the above requirement.
5. A description of how each affordable dwelling will comply with the development
standards of this division.
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6. A description of common amenities or facilities the applicant will provide and how
the applicant will ensure the occupants of the affordable dwellings will have the
same access to such amenities or facilities.
7. A description of how each incentive will apply to each building within the
development, regardless of whether the building contains affordable dwellings or
market rate dwellings or both.
8. The number of bedrooms in each dwelling in the development.
9. Clearly identify on the preliminary site plan or preliminary plat the specific location
of each affordable dwelling.
10. Information sufficient to determine the timing of construction and distribution of
affordable dwellings and market-rate dwellings throughout the development.
11. If the development is to be constructed in phases, provide a description of how the
affordable dwellings will be distributed among the phases including whether the
applicant proposes to have any subsequent phase of market rate dwellings rely on
affordable dwellings provided with earlier phases.
12. Any other information the review authority determines necessary to evaluate the
compliance of the affordable housing plan with the requirements of this division.
Sec. 38.380.040. - Incentives.
A. The number of affordable dwellings must meet or exceed the minimum standards set forth
in section 38.380.020 needed to qualify for the applicable incentive. Any incentive not
requested in the affordable housing plan in 38.380.030 is waived.
B. Incentives may be applied to dwellings:
1. In a residential-only development; or
2. In a mixed-use development. If the mixed-use development contains a mix of
residential and nonresidential primary uses, the incentives in this section are only
available if 50 percent or more of the gross floor area of the development contains
residential uses.
C. Type A Incentives (Table 38.380.020-1). The applicant may apply the incentives in this
subsection as follows:
1. For single-household detached dwellings, a minimum lot size of 3,000 square feet.
Alternatively, if the applicant demonstrates that all other applicable city regulations
related to lot development, access, and utilities can be met, a minimum lot size of
2,500 square feet is allowed.
2. For single-household attached dwellings (townhouse or rowhouse):
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a. A minimum lot size of 2,200 square feet. Alternatively, if the applicant
demonstrates that all other applicable city regulations related to lot
development, access, and utilities can be met, a minimum lot size of 1,800
square feet is allowable.
b. No minimum lot width, maximum lot coverage, or maximum floor area
ratio requirement if the applicant demonstrates that all other applicable city
regulations related to lot development, access, and utilities can be met.
c. A townhouse or rowhouse development that includes only dwellings of
1,200 square feet or less of livable square footage is exempt from a
minimum on-site parking requirement but may provide one parking space
located within a driveway area in the required front setback, provided that
the building in which the dwellings are located is three or fewer stories in
height.
d. In addition to the above incentives, a townhouse or rowhouse cluster with
four or fewer attached homes that includes only dwellings of 1,200 livable
square feet or less in size is exempt from the following:
i. Minimum lot size;
ii. Lot coverage;
iii. Floor area ratio;
iv. Lot area per dwelling unit density standard;
v. Lot width; and
vi. Minimum parking requirement.
3. For multi-household dwellings and mixed-use buildings:
a. In all zoning districts:
i. The residential off-site parking standards of 38.540.070.A may be
expanded up to 1,000 linear feet from the commonly used entrance
to the residential building.
ii. Up to 80% of the residential open space requirements of 38.520.060
may be met by providing private balconies provided every affordable
dwelling is provided a balcony and access to a ground floor common
open space is provided for all residents.
b. For affordable housing developments in the RS, R-1, R-2, R-3, RMH, R-
4, R-5, R-O, NEHMU, and B-1 districts, one additional story of height
(maximum 15 feet per story), provided that if the development abuts a
lower intensity residential district, the transition height setback provisions
of 38.320.060.B apply.
c. For affordable housing developments in the UMU, REMU, B-2, B-2M,
and B-3 districts, two additional stories of height (maximum 15 feet per
story), provided that if the development is adjacent to a lower intensity
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residential zoning district, the transition height setback provisions of
38.320.060.B apply.
d. Minimum motor vehicle parking requirement of one space per dwelling for
all districts other than B-3; however, the bicycle parking standards and
requirements of 38.540.050 remain applicable.
e. Minimum motor vehicle parking requirement of 0.75 space per dwelling
for B-3 district; however, the bicycle parking standards and requirements
of 38.540.050 remain applicable.
f. For affordable housing developments in R-3, R-4, R-5, R-O and RMH, the
minimum area per dwelling standards in Table 38.320.030.A do not apply.
g. For the M-1 zoning district:
i. An apartment building in an M-1 zoning district is a principal use and
the prohibition on locating residential uses on the ground floor of an
apartment building in M-1 zone in Table 38310.040.C does not
apply.
ii. In determining the maximum allowable residential square footage of
a development in M-1, Table 38.310.040.C fn6 is calculated for the
development as a whole rather than per individual buildings.
D. Type B Incentives (Table 38.380.020-2). If the applicant proposes to construct affordable
dwellings that meet the standards in Table 38.380.020-2 in the same development as
market-rate dwellings, the applicant may apply all of the following incentives to all
buildings in the development in which 50 percent or more of the livable floor area contains
residential uses:
1. For single-household detached dwellings:
a. A minimum lot size of 2,000 square feet. Alternatively, if the applicant
demonstrates that all other applicable city regulations related to lot
development, access, and utilities can be met, a minimum lot size of 1,600
square feet is allowed.
b. Off-street parking requirement of one space per dwelling.
2. For single-household attached dwellings (townhouses and rowhouses):
a. A minimum lot size of 1,600 square feet. Alternatively, if the applicant
demonstrates that all other applicable city regulations related to lot
development, access, and utilities can be met, a minimum lot size of 1,400
square feet is allowed.
b. No minimum lot width requirement if the applicant demonstrates that all
applicable city regulations related to lot development, access, and utilities
can be met.
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c. Off-street parking requirement of one space per dwelling. A townhouse or
rowhouse development that includes only dwellings of 1,200 livable square
feet or less of livable square footage is exempt from a minimum on-site
parking requirement, but may provide one parking space located within a
driveway area in the required front setback, provided that the building in
which the dwellings are located is three or fewer stories in height.
3. For multi-household dwellings and mixed-use buildings:
a. When incentives are requested, the building height of any building in the
development is limited to that permitted in the zoning district or four stories,
whichever is less and the maximum number of dwellings in a single
building is limited to that permitted in the zoning district or 36 dwellings,
whichever is less.
b. ADA parking spaces must be provided in accordance with applicable
building codes.
c. In addition to the ADA parking required, a minimum of .25 vehicle parking
spaces per dwelling are required. One short-term parking space located at
the main building entrance must be provided and identified as a loading
zone.
d. Bicycle parking standards and requirements of 38.540.050 apply. The
number of secure bicycle racks provided must exceed or be equal to 50
percent of the number of dwellings within the development.
e. For multi-household dwellings and mixed-use buildings in all zoning
districts the minimum lot area per dwelling does not apply.
f. For the M-1 zoning district:
i. An apartment building in an M-1 zoning district is a principal use and
the prohibition on locating residential uses on the ground floor of an
apartment building in M-1 zone in Table 38310.040.C does not apply.
ii. In determining the maximum allowable residential square footage of
a development in M-1, Table 38.310.040.C fn6 is calculated for the
development as a whole rather than per individual buildings.
E. Type C Incentives (Table 38.380.020-3). If the applicant proposes to construct affordable
dwellings that meet the standards in Table 38.380.020-3 in the same development as
market-rate dwellings, the applicant may apply the following incentives to all buildings in
the development in which 50 percent or more of the livable floor area contains residential
uses:
1. For single-household detached dwellings:
a. A minimum lot size of 2,000 square feet. Alternatively, if the applicant
demonstrates that all other applicable city regulations related to lot
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development, access, and utilities can be met, a minimum lot size of 1,600
square feet is allowed.
b. Off-street parking requirement of one space per dwelling.
2. For single-household attached dwellings (townhouses and rowhouses):
a. A development that proposes a single grouping of two townhouses or
rowhouses are a principal use in the R-1, RS, and RMH zoning districts.
b. A minimum lot size of 1,600 square feet. Alternatively, if the applicant
demonstrates that all other applicable city regulations related to lot
development, access, and utilities can be met, a minimum lot size of 1,400
square feet is allowed.
c. No minimum lot width requirement if the applicant demonstrates that all
applicable city regulations related to lot development, access, and utilities
can be met.
d. Off-street parking requirement of one space per dwelling. A townhouse or
rowhouse development that includes only dwellings of 1,200 square feet or
less of livable square footage is exempt from minimum on-site parking
requirements, but may provide one parking space located within a driveway
area in the required front setback, provided that the building in which the
dwellings are located is three or fewer stories in height.
3. For multi-household dwellings and mixed-use buildings:
a. One additional story of height (maximum 15 feet per story) beyond that
allowed in the RS, R-1, R-2, R-3, or RMH zoning districts.
b. Two additional stories of height (maximum 15 feet per story) beyond that
allowed in the R-4, R-5, R-O and B-1 zoning districts, provided that where
any building in the development which utilizes building height incentives
abuts a lower intensity residential zoning district, the transition height
setback provisions of 38.320.060.B apply.
c. Four additional stories of height (maximum 15 feet per story) beyond that
allowed in the UMU, REMU, B-2, B-2M, and B-3 zoning districts provided
that where any building in the development which utilizes building height
incentives abuts a lower intensity residential zoning district, the transition
height setback provisions of 38.320.060.B apply.
d. ADA parking spaces must be provided in accordance with applicable
building codes.
e. In addition to ADA parking spaces, a minimum vehicle parking requirement
of 0.5 space per dwelling is required. One short-term parking space located
at the building entrance must be provided and identified as a loading zone.
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f. Bicycle parking standards and requirements of 38.540.050 apply. The
number of bicycle racks provided must exceed or be equal to 50 percent of
the number of dwellings within the development.
g. For multi-household dwellings and mixed-use buildings in all zoning
districts the minimum lot area per dwelling does not apply.
h. For the M-1 zoning district:
i. An apartment building in an M-1 zoning district is a principal use and
the prohibition on locating residential uses on the ground floor of an
apartment building in M-1 zone in Table 38310.040.C does not apply.
ii. In determining the maximum allowable residential square footage of
a development in M-1, Table 38.310.040.C fn6 is calculated for the
development as a whole rather than per individual buildings.
Sec. 38.380.050. - Development Standards for Affordable Dwellings
A. The affordable dwellings must be constructed with the same features, such as appliances,
as market-rate dwellings within the same development but the quality of the features may
vary between market rate and the affordable dwellings.
B. The mix of bedrooms per unit in affordable dwellings must be as similar as possible to the
mix of bedrooms per unit of the market-rate dwellings in the development.
C. A one-bedroom dwelling must include a bedroom separated from other living areas of the
dwelling by a solid door. For the purposes of this division, a one-bedroom dwelling must
be greater than or equal to 450 square feet of floor area.
D. Access to shared amenities, other than parking, by residents of the affordable dwellings
must be the same as those in market-rate dwellings in the development and the cost of any
such amenity must be included in the required affordable rental rate.
E. All the affordable dwellings required to be developed pursuant to this division must be
completed and a certificate of occupancy issued prior to or at the same time as the market-
rate dwellings. The timing of construction and distribution of affordable dwellings
throughout a development must be approved in the affordable housing plan.
F. For multiple-phase developments or developments with more than one building:
1. All affordable dwellings must be constructed prior to the issuance of a building
permit for a building that consists exclusively of market-rate dwellings or at the
same time as market rate dwellings that use the incentives of this division.
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2. An applicant may use the incentives provided by affordable dwellings in a previous
phase of a development in a subsequent phase that consists of market-rate
dwellings.
Sec. 38.380.060. - Alternatives for Land Donation and Cash-in-Lieu
As an alternative to constructing the affordable dwellings required by 38.380.020, the applicant
may qualify for the incentives listed in 38.380.040 by:
A. An applicant may donate one or more parcels of land within the city limits to the city for
the purpose of building affordable dwellings, subject to the following:
1. The donated land may be one or more undeveloped parcels or ready-to-build lots,
but must be capable of building residential dwellings that meet the standards of this
division. All donated land will be used only to support the creation or preservation
of affordable dwellings.
2. The value of the donated land must be equal to or exceed the cost of designing,
obtaining land use and building approvals for, installing or upgrading infrastructure
for, and constructing the number of affordable dwellings the applicant would
otherwise be required to provide in return for the requested incentives in
38.380.040, as established by an independent valuation and economic report dated
no less than one year prior to transfer of the ownership of the land to the city
produced by one or more independent firms selected by the city and paid for by the
applicant.
3. The city commission must approve the donation of land pursuant to 2.08.100.
B. An applicant may provide a cash-in-lieu payment to the city’s community housing fund.
The review authority may establish administrative rules and procedures for the calculation
and implementation of a cash-in-lieu program. The city must use all cash-in-lieu funds to
support the creation or preservation of affordable dwellings. The following apply to
payment of cash-in-lieu:
1. For each affordable dwelling required by 38.380.020, but not provided, the cash-
in-lieu amount will be established based on a per dwelling price adopted by
resolution of the commission.
2. The per dwelling amount must be based on the difference between the average new
construction rental rate for apartments in the city and the established affordable
rental rate calculated over the course of 20 years.
3. The cash-in-lieu amount must be determined on the number, type of dwellings, and
mix of bedrooms identified as affordable in the affordable housing plan and
proposed to be constructed.
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4. Cash-in-lieu payments must be paid prior to issuance of a building permit for any
dwelling in the development.
Sec. 38.380.070. – Administration
A. The applicable review authority shall enforce all rules and regulations, and take all actions
necessary for the effective operation and enforcement of this division, unless such authority
is expressly reserved to the city commission or another city official, including but not
limited to:
1. Promulgate any rule or regulation necessary to the operation and enforcement of
this division, including but not limited to maintenance of the affordable dwellings,
periodic reporting, and notice and tenant protections in the event of foreclosure.
2. Adopting application, monitoring, reporting forms, compliance documents, and
obtaining any other information required from applicants for implementation of this
division.
3. Establishing standards for determining AMI requirements, including income-
averaging, and calculating and making available to the public the AMI required to
qualify for the various incentives listed in this division.
4. Establishing standards for the qualification of renters, ongoing income verification
and eligibility, primary occupancy requirements, and reporting and performance of
property management entities.
5. Establishing standards that would allow the review authority to approve an upward
adjustment of the AMI standards for renter qualification if an affordable dwelling
remains vacant for more than 30 calendar days and no person qualifying within the
required AMI applies for the affordable dwelling.
6. Monitoring compliance with this division, notifying the subdivider, applicant, or
current owner of the property of noncompliance, and ordering compliance,
including imposing sanctions permitted by this division.
B. All rules and regulations established by the applicable review authority are subject to city
commission review and modification.
Sec. 38.380.080. - Noncompliance and Sanctions
A. If the city determines an applicant, its successor, or the current owner of a property fails to
comply with any requirements of the affordable housing plan, or the requirements of this
division, or with the provisions of a compliance document, the applicable review authority
must notify the applicant, its successor, or the current owner of the property of the
noncompliance in writing and order compliance. Notification must describe the date by
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which the person or entity must be in full compliance and must describe the nature of the
noncompliance and the sanctions for noncompliance.
B. In addition to other remedies available to the city pursuant to this chapter, if the person or
entity remains in noncompliance on the date by which compliance was required, the city
may impose one or more sanctions, including but not limited to the following:
1. Issuing a civil penalty pursuant to 24.02.040;
2. Enforcing the requirements of the compliance documents;
3. Withholding or revoking building permits;
4. Issuing stop-work orders;
5. Withholding or revoking certificates of occupancy; and
6. Any other sanction available under local, state, or federal law.”
Section 3
That Section 38.540.050.A.1.b(1) of the Bozeman Municipal Code be amended as follows:
“Affordable dwellings housing. When calculating the amount of required parking for
affordable dwellings housing, as defined in section 38.700.020, of this chapter if the project is
guaranteed for use as affordable housing for a minimum period of 30 years and the use as
affordable housing is subject to long term monitoring to ensure compliance and continued use as
affordable housing, required parking spaces must be calculated based on number of bedrooms
outlined in Table 38.540.050-1, but may not exceed 1.5 spaces per unit. if the project is subject to
an approved affordable housing plan, then required parking spaces must be provided pursuant to
division 38.380.”
Section 4
That Division 38.700 of the Bozeman Municipal Code be amended as follows:
1. That the definition of “affordable home” in 38.700.020. – A definitions be amended as
follows: “Affordable dwelling home. A residential dwelling unit for rent or purchase
that a subdivider or developer has committed to making affordable as an affordable
home at the AMI levels to qualify for the incentives in pursuant to 38.380.
2. That the definition of “affordable housing” in 38.700.020. – A definitions be repealed.
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3. That the definition of “yield street” in 38.700.170. - S definitions (subsection 9 within
the definition of "Street Types") is hereby repealed.
Section 5
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 6
Savings Provision.
This ordinance does not affect the rights and duties that matured, penalties that were
incurred or proceedings that were begun before the effective date of this ordinance. All other
provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full
force and effect.
Section 7
Severability.
That should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so
decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 8
Codification.
This Ordinance shall be codified as appropriate in Sections 2 – 4.
Section 9
Effective Date.
This ordinance shall be in full force and effect thirty (30) days after final adoption.
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PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman, Montana, on
first reading at a regular session held on the _____ day of ________________, 2025.
____________________________________
TERENCE 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
____________________, 2025. The effective date of this ordinance is __________, __, 2025.
_________________________________
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TERENCE CUNNINGHAM
Mayor
ATTEST:
_______________________________
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney