HomeMy WebLinkAbout05-05-26z Public Comment - S. Knight - Long-Term Economic Impacts of Housing Policy on Residents and Property TaxpayersFrom:Sam Knight
To:Bozeman Public Comment
Subject:[EXTERNAL][SENDER UNVERIFIED]Long-Term Economic Impacts of Housing Policy on Residents and Property
Taxpayers
Date:Tuesday, May 5, 2026 5:03:01 PM
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To the Bozeman City Commission,
I began writing a comment for the meeting regarding the project to extend Fowler Lane and amultistory housing development. Though I don't favor this project, I believe it more important
to offer a perspective on the long-term economic realities facing communities that pursueaffordable housing primarily by encouraging and approving multifamily developments, which
often diminishes the supply of single-family homes.
At the outset, it is important to acknowledge that multifamily housing plays a valuable and
necessary role in addressing immediate housing needs. It allows for increased density, fasterconstruction timelines, and more efficient use of infrastructure. From a municipal standpoint,
these developments can generate strong tax revenue per acre while lowering the cost of deliveringpublic services. In the short term, this approach can help relieve housing shortages and provide
accessible options for a growing population.
However, when this strategy becomes the dominant approach over time, it sets into motion a
series of interconnected economic effects that significantly impact both residents and propertytaxpayers.
One of the most consequential outcomes is the gradual reduction in the availability of single-family homes. As fewer of these homes are built, supply tightens while demand remains steady or
increases. This imbalance drives up home values, particularly the price per square foot, oftenbeyond what would be expected based on construction costs alone. In this environment, even
modest or older homes begin to command premium prices, reflecting scarcity rather than intrinsicvalue.
As home prices rise, the pathway to ownership becomes increasingly difficult for many individualsand families. First-time buyers are often the most affected, finding themselves priced out of the
market or forced to delay purchasing indefinitely. This shift results in a larger share of thepopulation remaining in the rental market for longer periods, not by preference, but by necessity.
The effect of this transition is both immediate and compounding. As more people compete forrental housing, demand intensifies, vacancy rates tighten, and rents rise. At the same time, the
elevated price per square foot in the ownership market influences the economics of newdevelopment. Developers and investors rely on these benchmarks to justify project costs and
expected returns, which in turn requires higher rental rates to make new multifamily projectsfinancially viable. In this way, the housing system becomes a self-reinforcing cycle: reduced
ownership supply leads to higher home prices, which increases rental demand, which drives rentshigher, which then supports even higher development costs.
For residents, this cycle has long-term implications for financial stability and opportunity.
Homeownership has historically been one of the primary means of building wealth and achieving
economic security. When access to ownership is limited, fewer residents are able to accumulateequity over time. Instead, a growing portion of household income is directed toward rent
payments, often to property owners or investment groups that may not be locally based. Thisrepresents not only a shift in individual financial outcomes, but also a broader redistribution of
wealth away from the community.
For property taxpayers, particularly existing homeowners, the consequences are equally
significant. As single-family homes become more scarce and valuable, property assessmentsincrease accordingly. While this may suggest rising wealth on paper, it does not provide additional
income to meet the resulting tax obligations. Homeowners often experience steadily increasingproperty taxes, creating financial pressure that can be especially challenging for those on fixed or
moderate incomes. Over time, this pressure can lead to the displacement of long-term residentswho can no longer afford to remain in their homes.
At the same time, as fewer residents are able to enter homeownership, the base of propertytaxpayers becomes more concentrated. A smaller group of homeowners carries a larger share of
the long-term tax burden, while a greater portion of the housing market shifts toward rental units.This dynamic can alter not only the financial structure of the community, but also its economic
character.
There are additional considerations related to ownership and capital flow. Multifamily properties
are often owned by institutional investors or entities located outside the community. While these
developments contribute to the tax base, the income they generate, through rent payments, doesnot always circulate locally. By contrast, owner-occupied housing tends to anchor wealth within
the community, as homeowners invest in their properties, neighborhoods, and local businesses.Over time, a shift toward externally owned housing can result in a portion of the community’s
economic value being exported rather than reinvested.
Furthermore, the emphasis on multifamily development can place upward pressure on land
prices. As developers compete for available land, costs increase, making it more difficult to buildattainable ownership housing such as starter homes, townhomes, or other “missing middle”
options. This reinforces the cycle, further limiting opportunities for residents to transition fromrenting to owning.
The cumulative effect of these trends is a gradual transformation of the housing market into a
rent-dominant system, one characterized by higher costs, reduced access to ownership, andincreasing economic separation between those who own property and those who do not. While
multifamily housing remains an important part of a healthy housing ecosystem, an over-relianceon it as the primary strategy risks undermining long-term affordability, economic mobility, and
community stability.
A more balanced approach, one that preserves and promotes opportunities for homeownership
alongside rental development, offers a stronger foundation for sustainable growth. Encouraging abroader mix of housing types, including single-family homes and “missing middle” options, can
help maintain accessibility, support wealth-building for residents, and protect the long-terminterests of property taxpayers.
As communities continue to grow and evolve, it is worth considering not only how many housingunits are being built, but also what kind of economic future those units create. A strategy that
balances efficiency with opportunity, and short-term gains with long-term stability, will ultimately
serve residents, property taxpayers, and the broader community more effectively.
Thank you for your time and thoughtful consideration.
Sincerely,
-- SAM KNIGHT
Business Development Consultant
Cell: (407) 758-8089
Office: (406) 315-5657
Toll Free: (888) 335-2514
Email: samk@knightsalesgroup.com