HomeMy WebLinkAbout10-07-25 Public Comment - C. Stoddard - Affordable HousingFrom:Chris Stoddard
To:Bozeman Public Comment
Subject:[EXTERNAL]Public comment city commissioners
Date:Wednesday, October 1, 2025 8:22:33 PM
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Really, no housing shortage? Why Bozeman needs both more supply and more support
for low income households
-Chris Stoddard--city resident and homeowner
Last week I attended a lecture by retired professor Dr. Kirk McClure, who was invited by
some Bozeman residents to discuss whether there is a housing shortage in Bozeman. I
am an economist at MSU currently teaching a class on state and local policy, and I was
surprised when his conclusion—that there is no housing shortage—contradicted my
impression of the literature. I dug into the research to understand how Dr. McClure
reached such different conclusions and wanted to share what I learned so we can all
work with the best information as we address Bozeman's housing issues.
Dr. McClure's conclusion contradicts the general research consensus. An Urban
Institute report this year presented six different national estimates, and all except Dr.
McClure's found shortages of 1-7 million units nationally.
Why is there such a disparity?
In the article the talk was based on, McClure and Schwartz (2024) compare the growth in
the number of households and the number of housing units. Since there is more growth
in units than households, Dr. McClure argued that there is not a housing shortage in the
US generally or in Bozeman specifically, although there is a problem of affordability.
This approach has been heavily criticized. Researchers commonly note that high
housing costs cause people to double up, which reduces the number of households
formed. This includes adult children living longer with parents, working adults sharing
apartments when they would prefer to live alone, or couples staying together due to
housing costs when they would prefer to separate. As the Harvard Joint Center for
Housing Policy researchers observe, “While conventional wisdom would conclude these
people were doubling up because of a housing shortage, McClure and Schwartz’s
methodology concludes there was no housing shortage because these people were
doubling up.”
When I asked about this during the presentation based on my own personal experience,
Dr. McClure suggested that doubling up happens so infrequently that it is not a
significant factor. However, this contradicts all the research I was able to find:
According to the Census 2023 data, there were 8.1 million families sharing homes
with people not related to them. This doesn't even count adult children living with
parents, who may also do so due to high housing costs.
Freddie Mac estimates how many households are "missing" based on age,
children, marital status, housing costs, and other factors. They find 1 million fewer
households than would be expected if housing costs had remained at 2000
levels.
McClure’s article appeared in a special journal issue on housing shortages. In that
same issue, Galster (2024), Freemark (2024), and Airgood-Obrycki and McCue
(2024) all criticize McClure’s methodology, and show that ignoring housing
limitations on household formation is misleading and that household formation is
sensitive to housing costs.
Other studies track indicators of market dysfunction and document widespread housing
shortages.
The key question for Bozeman
The real question for our community is whether allowing more housing to be built will
slow the growth in rental and home prices. Dr. McClure did not directly address this in
his presentation, but in his response to the critiquing literature, he acknowledges that
"expanding supply can help to reduce housing prices" (McClure, 2025). Numerous other
studies agree that supply restrictions lead to higher housing costs. (I summarized some
of this below for details.)
That said, I agree with Dr. McClure that supply alone will not necessarily solve the issue
in Bozeman, and that more zoning for multi-family units and more support for low-
income households are important parts of the solution. Based on the research, my view
is that we need both more support for low-income households and policies that allow
builders to continue adding a diverse range of multi-family and single-family housing in
our area.
Thank you for the work you do to help Bozeman address these issues.
Chris Stoddard
Research on housing supply and affordability:
Been et al. (2019, 2024) are two excellent overviews of the research and many of
the common misconceptions about housing. Both articles conclude that new
market-rate supply reduces rents in other properties in the area. The 2024
research review states
“our review of rigorous recent studies finds that: (a) increases in housing
supply reduce rents or slow the growth in rents in the region; (b) in some
circumstances, new construction also reduces rents or rent growth in the
surrounding neighborhood; (c) while new supply is associated with
measures of gentrification, it has not been shown to heighten
displacement of lower income households; and (d) the chains of moves
resulting from new supply free up both for-sale and rented dwelling units
that are then occupied by households across the income spectrum, and
provide higher income households with alternatives to the older units for
which they might otherwise outbid lower income residents.”
Mast (2023) also examines how newer higher priced builds also help lower income
households. New market-rate units cause chains of moves, freeing units down the
price ladder and loosening the low-income housing market
Baum Snow (2023) “Housing supply constraints have meant that demand growth
has increasingly manifested as price growth rather than as increases in housing
units or population in larger and denser metropolitan areas and neighborhoods.
New housing is provided at increasingly higher cost in areas that have higher
intensity of existing development and more restrictive regulatory environments.”
Hanley 2023 Restrictive land use regulations and zoning laws have been linked
to higher housing prices, reduced construction activity, and decreased elasticity
of housing supply, with density restrictions being a main cause.
Freemark (2022) “Research on regional upzoning impacts is nascent but
outcomes appear positive. Downzonings limit construction and worsen
affordability.”
Pennington 2021"increasing the supply of market rate housing has beneficial
spillover effects for incumbent renters, reducing rents and displacement
pressure while improving neighborhood quality.”
-- Christiana Stoddard
ProfessorDept. of Ag. Economics and Economics
Montana State UniversityBozeman, MT 59717
(406) 994-5634Fax: (406) 994-4838