HomeMy WebLinkAboutA4 ORD 1922 Housing
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Wendy Thomas, Director of Community Development
SUBJECT: Open for discussion Ordinance 1922, for rescission of the Existing Workforce
Housing provisions in Chapter 10, Section 8 and Creating Article 43 in Chapter 38, Unified Development Code,
for an Inclusionary Housing Program including definitions, incentives and requirements for the provision of
affordable housing. The item was tabled on September 21, 2015.
MEETING DATE: November 16, 2015
AGENDA ITEM TYPE: Action
RECOMMENDATION MOTION: I move to take from the table Ordinance 1922.
RECOMMENDATION MOTION: Having reviewed the staff report, considered public comment, and
considered all of the information presented, I hereby adopt the findings presented in the staff report for
application Z-15358 and move to recommend approval of Ordinance 1922, creating an Inclusionary
Housing Program.
EXECUTIVE SUMMARY: On September 21, 2015, the City Commission heard the staff presentation and
public comment on proposed Ordinance 1922 to create an inclusionary housing program. The ordinance
proposed a two part program. The first phase of the program would be a voluntary program with incentives and
goals for the creation of affordable housing. The second phase of the program would become effective when the
housing creation goals were not met. The second phase also contains incentives; however all site plans and
subdivisions submitted after the effective date would be required to create affordable housing. The Commission
voted to table the item.
On the morning of September 22, 2015, Daniel Werwath, the affordable housing consultant working with the city,
Luke Howard, Government Affairs representative for the Southwest Montana Building Industry Association
(SWMBIA) and I met for four hours to discuss concerns SWMBIA had regarding the proposed ordinance. As we
worked our through the ordinance, issues were discussed and proposed changes to the ordinance were
incorporated into the Ordinance 1922, Version II that is included as an attachment to this memorandum. A
number of the comments that were raised by SWMBIA but not incorporated into the ordinance were proposed
changes that wouldn’t provide the flexibility that makes a program successful. However, the input created a
better ordinance that will result in a program, if adopted by the City Commission, which is customized for the
City of Bozeman based on community input. Revisions to the ordinance are noted in the strikethrough/underline
format. To make finding these changes easier we have hi-lighted the text that has been changed.
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There are three issues that would benefit from Commission consideration:
1. Should the program be structured to focus on first time homebuyers?
2. Should the financial commitment (down payment) be at a low level to compete with housing programs
available in Gallatin County?
3. Should household occupancy assumptions be adjusted to match those historically used by not for profit
housing providers in Gallatin County?
STAFF RECOMMENDATION:
Staff is recommending a series of changes to the ordinance. The major issues as outlined above are generally
policy changes and not technical issues within the ordinance.
First Time Homebuyer: Many programs are geared toward first time homebuyers. In large part this was a result
of programs that were developed on the federal level to make home ownership more accessible. These programs
are generally successful and continue today. Often these programs help to stabilize communities by allowing
working households the opportunity to purchase a home and become (in)vested in a community.
Not restricting the program to first time home buyers allows households that have owned homes in other areas the
ability to relocate to Bozeman and purchase an affordable home. For example, such a change would allow a
homeowner in Gallatin County, who meets the qualifications of the program, the ability to purchase an affordable
home in Bozeman and move into the city, perhaps allowing them to live closer to work. Not limiting the
program to first time buyers would widen the pool of potential buyers.
Financial Commitment/Down Payment:
In the original ordinance staff recommended at 3% down payment. This recommendation was based on the input
from bankers during the ordinance drafting and review process. The Version II of the Ordinance includes
reducing the down payment or financial contribution from three percent (3%) to $1,000. During ordinance review
with advisory boards and local banks, bankers noted that in most circumstances the purchasers are required to put
down 3%. In further conversations, Werwath and affordable housing providers noted that in some circumstances
purchasers may be able to layer funding in order to put as little as $1000 toward the purchase at the time of
closing. Based on this input Version II has reduced the cash contribution to allow the most flexibility. It should
be noted that the purchaser will be required to meet the cash contribution as specified by the mortgage lender.
Staff recommends that the lesser amount be incorporated into the ordinance.
Household Occupancy:
The change to household occupancy would change the ordinance to set a minimum price based on an occupancy
of one person per bedroom, up to three bedrooms. This change would align the ordinance with the practice that
HRDC has been using in the community. In the pricing spreadsheets that I have used to calculate affordability in
the quarterly updates that were provided to the Commission over the last two years, I have used the calculations
and occupancy levels used by the HRDC which are one person per bedroom. The HRDC uses this occupancy, as
do many affordable housing providers, because it accurately reflects the demographic of their clientele. Many
two bedroom units are sought not by a traditional household of two adults and one child, but one adult and one
child. As many single parents seek the financial and emotional stability homeownership provides, they seek a unit
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that provides adequate bedrooms for a parent and child(ren). It is important to consider that these price points are
used to provide sideboards for construction cost as well as for buyers; however, because many homes in Bozeman
are built for a specific family and not spec built it may well be that a two bedroom unit would be priced and sold
to a household of three.
Version I
Version II
Persons 80% AMI
Price Point*
Persons 80% AMI
Price Point*
Studio 1 $163,000 1 $163,000
One bedroom 2 $186,000 2 $186,000
Two bedroom 3 $209,000 2 $186,000
Three bedroom 4 $232,000 4 $232,000
*Price Point is for illustrative purposes only
Other proposed changes:
No changes were made to the incentives chart. SWMBIA advocated that impact fees assistance be provided to
housing units in the 90% area median income (AMI) category. This addition would add a layer of complexity to
the sale of the housing unit, both initially and upon resale. In addition, the contribution would use money that is
needed to make housing affordable to lower AMI categories. SWMBIA also advocated for a tiered reduction in
parkland dedication. Thoroughly addressed in the staff report for your September 21 meeting, staff has
determined this incentive should continue to be reserved for a small number of homes in the 70% AMI category.
The language regarding adjustments or changes interest rates was amended to reflect a change either up or down.
The language regarding bedroom count was amended based on SWMBIA input. They sought to not have the
bedroom count included in the affordable housing plan; however, Werwath and staff felt that having a plan that
addressed the number of anticipated bedrooms would help with advance sales and bringing together builders and
future homeowners. In addition, it provides a known housing unit count as well as number of bedrooms which is
very important to buyers.
A measure of uncertainty from builders remains regarding the pricing of affordable housing units. It is important
to remember that pricing is a guideline as each household will have a different level of income and down
payment. In addition, homes may have features that will push the price from the benchmark rate of 70% AMI.
Specific price points will be outlined in the affordable housing plan, but using a targeted price of 70% AMI will
create a larger pool of potential buyers. Werwath noted that having price point targets at 80% AMI will result in a
very small pool of buyers for the unit. It is in the best interest of all stakeholders to ensure that there is a pool of
qualified buyers available to purchase homes.
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ALTERNATIVES: As directed by the Commission.
Report compiled on: November 10, 2015
Attachments:
Ordinance 1922 Version II
Ordinance 1922, Original
Public Comment
Staff Report from September 21, 2015
City Commission Minutes, September 21, 2015
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ORDINANCE NO. 1922
VERSION II
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA REPEALING CHAPTER 10, ARTICLE 8 OF THE BOZEMAN MUNICIPAL
CODE, ADOPTING A NEW ARTICLE REGARDING AFFORDABLE HOUSING TO
TERMINATE ONLY UPON THE OCCURRENCE OF CERTAIN CONTINGENCIES,
AND ADOPTING AN ARTICLE REGARDING AFFORDABLE HOUSING TO BE
EFFECTIVE ON THE OCCURRENCE OF SPECIFIC CONTINGENCIES AND
PROVIDING EFFECTIVE DATES
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY
OF BOZEMAN, MONTANA:
Section 1
Chapter 10, Article 8 of the Bozeman Municipal Code is repealed in its entirety.
Section 2
A new article shall be added to Chapter 38, BMC to be entitled “Affordable Housing” to read as follows:
“[(Temporary) ARTICLE 43
DIVISION 1. – FINDINGS AND PURPOSE.
38.43.010. - Legislative findings.
The city commission hereby finds:
A. The Bozeman Community Plan establishes a goal to encourage an adequate supply of
affordable housing and land for affordable housing in Bozeman. A lack of affordable
housing affects the ability of many residents to find housing which is adequate for their
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basic housing needs. A lack of adequate housing affects health, social stability, and other
issues which can have negative and intergenerational effects. To fulfill this goal, the
Community Plan establishes an objective to promote the development of a variety of
housing types, designs, and costs to meet the wide range of needs of Bozeman residents.
B. The Affordable Housing Action Plan: 2012 - 2016 (Action Plan) analyzed housing needs
and existing market conditions and determined housing affordability has become an acute
problem as demonstrated by the number of households paying over 30% of their incomes
for housing. A 2015 update to the city’s housing needs analysis (Action Plan Update)
concluded that the group of homebuyers with significant affordability gaps have incomes
at or below 80% of the area medium income and are in need of subsidies and/or below-
market home prices. The Action Plan Update also determined that buying opportunities are
increasingly scarce for homebuyers with incomes between 60% and 100% of AMI, and
that housing and land prices have increased faster than incomes for many of Bozeman’s
residents.
C. Since the adoption of the Bozeman Community Plan and the Action Plan, the median sales
price of housing has continued to climb. According to the Action Plan Update, as of the
end of November 2014, the median home price was $287,000.
D. The Action Plan Update states that the number of detached homes priced below $250,000,
a rough indicator of housing affordability for a family of three at 100% of AMI, has fallen
from 48.4% of the market in 2012 to just 18.6% in 2014.
E. There is a critical shortage of for-sale housing affordable to Bozeman households with
incomes at and below the area median income, as currently calculated by the U.S.
Department of Housing and Urban Development. As a result, some residents pay excessive
amounts of income for housing, reducing the amounts available for other necessities and a
decent and adequate standard of living.
F. Limited housing opportunities within the city requires households to seek housing outside
of the city limits which has a negative impact on transportation infrastructure by adding
unnecessary trips to the network. Increased driving distance to affordable housing also
negatively impacts air and water quality. To maintain a sufficient resident workforce in all
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fields of employment, and to ensure the public safety and general welfare of the residents
of the city of Bozeman, affordable housing needs must be addressed.
G. The city can achieve its goals of promoting the development of more affordable housing
and its goal of achieving an economically balanced community only if part of the new
housing built is affordable to households with low and moderate incomes.
H. The inclusionary housing regulations codified in this ordinance will substantially advance
the city’s legitimate interest in assuring that additional housing is built in the city that is
affordable to residents, including low- and moderate-income households and dispersed
throughout the city in order to encourage economic integration of the city’s residents.
I. This ordinance is adopted pursuant to the city’s self-governing powers and the city’s
independent general police power to protect public health, safety, and welfare.
Encouraging the construction of affordable housing within certain developments is
consistent with the community’s housing goals of protecting the public welfare by fostering
an adequate supply of housing for persons at all economic levels and maintaining both
economic diversity and geographically dispersed affordable housing.
J. Providing housing affordable to low and moderate-income households is reasonably
related to the impacts of newly created market-rate housing projects because:
1. Rising land prices are a key factor in preventing development of new affordable
housing. New market-rate housing construction in Bozeman has generally created
strong and increasing demand for a finite stock of unbuilt land within the city, and thus
continues to drive up the price of remaining land. New development without affordable
units reduces the amount of land development opportunities available for the
construction of affordable housing.
2. New residents of market-rate housing place demands on services provided by both
public and private sectors, creating a demand for new employees. Some of these public
and private sector employees needed to meet the needs of the new residents earn
incomes only adequate to pay for affordable housing. Because affordable housing is in
short supply in the city, such employees may be forced to live in less than adequate
housing within the city, pay a disproportionate share of their incomes to live in adequate
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housing in the city, or commute ever increasing distances to their jobs from housing
located outside the city. These circumstances harm the city's ability to attain
employment and housing goals articulated in the Community Plan and place strains on
the city's ability to accept and service new market-rate housing development.
38.43.020. - Purpose.
The purpose of this article is to promote the public health, safety, and welfare by
encouraging the creation of affordable housing for the residents of Bozeman. In addition, the
purpose of this article is to promote the dispersal of quality affordable housing throughout
Bozeman’s neighborhoods for households of a variety of income levels including low- and
moderate-income residents to meet the goals of the Community Plan and the Action Plan by
encouraging a mix of housing types throughout the city and integrating affordable housing so as
to not concentrate affordable housing in a particular area.
In addition, the ordinance is intended to alleviate the impacts that would result from the use of
available residential land solely for the benefit of households that are able to afford market-rate
housing and to mitigate the service burden imposed by households in new market-rate residential
developments by making additional affordable housing available for service employees. The
ordinance is also intended to mitigate environmental and other impacts that accompany new
residential development by reducing traffic, transit and related air quality impacts, promoting
jobs/housing balance and reducing the demands placed on transportation infrastructure.
The ordinance provides incentives for housing developers to ensure houses are constructed and
sold in a manner that furthers the city’s affordable housing goals.
DIVISION 2. – APPLICABILITY AND DEFINITIONS.
38.43.030. – Applicability.
This article applies to developments seeking to use incentives to develop affordable housing.
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38.43.040. – Definitions.
1. Affordable housing or affordable home – A dwelling for purchase by an owner-occupant
that requires no more than 33% of a household’s income for housing payments and meets
the definition of a lower-priced home or moderate-priced home.
2. Area Median Income or AMI – As calculated by the U.S. Department of Housing and
Urban Development (HUD), AMI is the median income for a family of four within a
specific geographical area, such as Gallatin County. For each such region, HUD adjusts
this AMI calculation for households of different sizes and updates the calculations
annually based on estimated changes in area incomes. For purposes of this article, the city
hereby adopts HUD’s AMI calculations as an equitable and reasonable method to
determine affordability, based on percentages of AMI specified in this article.
3. Developer – For purposes of this article, a developer is the person or legal entity, or their
successor(s) in interest who: (a) submits an affordable housing plan for a subject property
along with other submissions required for land use approvals, zoning, or permit reviews
by the city, and/or (b) is the owner of property subject to this article during the
development phase or a successor in title, such as a builder, obligated to implement an
approved affordable housing plan with respect to one or more lots or parcels of land
and/or (c) receives incentives for the production of affordable housing.
4. Lower-priced home – Newly created dwelling for purchase, determined by the city in
accordance with this article to be affordable to a household with an income between 65%
and 80% of AMI.
5. Market-rate home – Any dwelling subject to this article which is not an affordable home,
including detached dwellings, attached town houses, and condominium units but not
including housing units that are developed for exclusive use as a rental.
6. Moderate-priced home – Newly created dwelling for purchase, affordable to a household
with an income between 81% and 100% of AMI.
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DIVISION 3. – Reserved.
38.43.050. – Pricing of affordable homes.
A. The city will calculate on an annual basis the maximum sales price a developer may charge
for each category of affordable home included in a developer’s affordable housing plan as
follows:
1. Lower-priced homes. The sales price for lower-priced homes affordable to buyer-
households with incomes from 65% to 80% of AMI will be calculated based on a
household income of 70% of AMI.
2. Moderate-priced homes. The sales price for moderate-priced homes affordable to
buyer-households with incomes from 81% to 100% of AMI will be calculated based
on a household income of 90% of AMI.
B. Affordable home sales price schedule.
1. The city will annually publish a schedule of sales prices for low-priced homes and
moderate-priced homes within 30 calendar days of the HUD’s annual publication of
updated AMI calculations. The sales price schedule will be effective on the date of
publication by the city. The new sales price schedule will apply to applications for
building permits received after the effective date of the new sales price schedule. A
developer may request that a new sales price schedule apply to the sale of an affordable
home approved under a previous sales price schedule.
2. The city, at the city’s sole discretion, may recalculate the sales price schedule if
prevailing mortgage interest rates have increased adjusted by 50 basis points or more
over the assumption used for the previous schedule.
3. Considerations. The following factors will be considered by the city in calculating the
sales price schedule. The Planning Director may make de minimis exceptions to
application of these factors:
a. AMI for the Bozeman area;
b. Gross monthly income will be calculated as the appropriate HUD AMI
calculations income divided by 12;
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c. The maximum monthly payment will be 33% of gross monthly income. The
maximum monthly payment will include costs directly applicable to a mortgage
such as payment of principal, interest, as well as assumptions for typical costs of
taxes, public assessments, property insurance premiums, mortgage insurance
premiums (assuming the higher of either government or private mortgage insurance),
and homeowner/condominium association fees;
d. The interest rate will be determined by the city by a survey of at least three local
mortgage lenders, averaging their current rates for loans for homes with price
ranges within the low-priced homes range and the moderate-priced homes range;
e. The financing will be a conventional or government-insured fixed-rate
loan within one hundred basis points of prevailing interest rates with a term of 30
years or less; and
f. A borrower will typically provide a down payment of $1,000. 3% of the purchase
price.
C. Household occupancy assumptions. To determine the maximum sales prices of affordable
homes with different numbers of bedrooms, the city will base its calculation on the AMIs
for households of different sizes, as follows:
1. Zero bedroom or studio unit – AMI for a one-person household;
2. One bedroom unit – AMI for a two-person household;
3. Two bedroom unit – AMI for a two three-person household; and
4. Three bedroom unit or larger – AMI for a four-person household.
38.43.060. – Timing of delivery of affordable homes.
Affordable homes included in an approved affordable housing plan must be provided in
accordance with the following:
A. In each development in which more than one affordable home is proposed to be sold, the
affordable housing plan shall specify that affordable homes are to be sold concurrently and
in proportion to the sale of unimproved lots or market-rate homes. Such timing will be
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represented in an affordable homes pricing and delivery schedule as described in section
38.43.080, as outlined in an approved affordable housing plan.
B. A developer may sell affordable homes earlier than required in an affordable housing plan.
38.43.070. – Minimum design and construction standards for affordable homes.
A. Required numbers of bedrooms in affordable homes. In each development subject to the
requirements of an approved affordable housing plan, affordable homes shall represent a
mix of bedrooms per unit as similar as possible (given rounding of numbers) to the mix of
bedrooms per unit of the market-rate homes in the development.
B. Standards for design and construction. The city shall define reasonable standards for the
design and construction of affordable homes to ensure livability and compatibility with
nearby market-rate homes in the development. Affordable homes may have different
interior finishes and features than other dwellings within the development, as long as the
finishes and features are functionally equivalent and of good quality. Finishes include, but
are not limited to, design and materials, the provision of appliances, cabinets, and floor
treatment. Features include, but are not limited to, the numbers of bathrooms, garages and
parking areas, mechanical equipment and hookups, and green building features.
C. Amenities. Affordable homes shall have the same amenities as the market-rate homes in
the development, including the same access to and enjoyment of common open space and
facilities in the development.
38.43.080. – Submission of affordable housing plan; approval.
A. Affordable housing plan. The applicant for any development seeking to utilize the
incentives to create affordable housing must submit an affordable housing plan in a form
provided by or approved by the city that describes how the provisions of this article will
be satisfied. When approved by the city, the affordable housing plan must be incorporated
by reference in the recorded subdivision plat, site plan or annexation agreement.
B. Affordable housing plan as binding agreement. An affordable housing plan approved by
the city will be considered a binding contract between the developer and the developer’s
successors in interest to the lot or dwelling. Such plan will be included in a separate
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recorded written agreement between the developer and the city, or incorporated into
another recorded document wherein the developer is required to implement the affordable
housing plan.
C. Contents of affordable housing plan. The affordable housing plan submitted by the
developer must include, at a minimum:
1. Number of affordable homes proposed in each affordable home category;
2. The minimum number of bedrooms in each affordable home;
3. Number of market-rate homes in the development;
4. The anticipated or estimated number of bedrooms in each market-rate home;
5. Location of affordable homes in the development (lots in the plat or units within a site
plan);
6. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development;
7. Marketing plan describing how affordable homes will be offered to the public;
8. Plan for construction of affordable homes in phased developments. It is anticipated
that in developments being built in phases, the number of market-rate homes may not
be certain at the time the developer submits the affordable housing plan. In such cases,
the developer must estimate the number of market-rate homes and number of affordable
homes for each phase. If the number of homes in the first phase of such development
is certain at the time of the city’s approval of the affordable housing plan, a separate
affordable homes pricing and delivery schedule for that phase shall be incorporated in
the affordable housing plan at the time of development or construction of each
subsequent phase. As the number of homes in future phases becomes certain, the
affordable housing plan shall provide for subsequent affordable homes pricing and
delivery schedules for future phases of the development, consistent with the affordable
housing plan; and
9. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article.
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D. Pricing and delivery schedules in affordable housing plans. The affordable homes pricing
and delivery schedule shall be in the form of a chart that contains the numbers of required
affordable homes by bedroom count and affordable home category, and shall indicate the
current affordable home prices as calculated by the city.
E. Approval of affordable housing plan. The affordable housing plan will be reviewed as part
of the initial application approval process for the type of development proposed. A
condition shall be attached to the approval of any subdivision plat or site plan to require
recordation of the affordable housing plan or other separate agreement obligating the
developer to meet the requirements of this article.
38.43.090. – Marketing, sales and occupancy of affordable homes.
Developers subject to this article shall market and sell affordable homes in accordance with
provisions described in the city’s published instructions for preparing affordable housing plans.
These provisions will address factors such as waiting list management, marketing materials, the
city’s and the developer’s respective responsibilities for marketing affordable homes and finding
qualified buyers, actions to be taken in the event of inability to identify qualified buyers,
procedures for certification of buyer eligibility, purchase contracts, and full disclosures to buyers
of their obligations and rights under this article.
38.43.100. – Recording requirements upon sale of affordable home.
The developer, or the city or its agent, if the city is involved in the sale of selling an affordable
home, shall cause to be recorded in the offices of the Gallatin County Clerk and Recorder,
simultaneously with the recording of the deed of conveyance, a restrictive covenant, deed of trust
or other legal instrument, approved as to form by the Bozeman City Attorney that fulfills the resale
and recapture requirements described in section 38.43.130.
DIVISION 4 – INCENTIVES
38.43.110. – Incentives available for affordable housing.
Developers may apply for incentives in conjunction with a development application by submitting
an affordable housing plan pursuant to section 38.43.080.
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Incentives Description Lower-priced homes
Moderate-
priced homes
70% AMI 80% AMI 90% AMI
Impact fee subsidy
Full or partial subsidization of impact fees,
paid from municipal funds if such funds are
available; such subsidization must be secured with a lien instrument due upon
sale, transfer or non-rate/term refinance of the home.
X X
Down payment
assistance
Subject to the availability of funds, the city will provide on a first-come first-served basis, down payment assistance not to
exceed $10,000 per home benefiting households. Down-payment assistance will
only be provided directly to the qualifying
homebuyer. This assistance shall be secured with a lien instrument due upon sale, transfer or non-rate/term refinance of the
home.
X X
Waiver of subdivision pre-
application
Waive pre-application for subdivision when
10% of units are designated for lower price homes.
X X
Reduction of parkland 1
Allow a 1:1 square foot reduction in the amount of parkland dedication required per
square foot of lot size for lower homes. If a
developer provides more than the required number of lower priced homes, the lot area
square footage of the additional lower
priced homes shall not further reduce the required parkland dedication.
X
Reduced Minimum Lot Sizes
Per the provisions in this chapter, affordable
homes may utilize reduced setback
requirements and reduced sized lots. The reduction in lot size shall be allowed to
create an increase in maximum unit density
beyond the maximum currently allowed in a given zoning district.
X X X
1 This incentive is available only until the city has approved affordable housing plan(s) that include the number of
lower-priced homes at 70% AMI as established by commission resolution. In addition, a developer seeking to use
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Incentives Description Lower-priced homes
Moderate-
priced homes
70% AMI 80% AMI 90% AMI
Concurrent infrastructure housing construction
Concurrent construction of infrastructure
and housing development at the installation
of gravel-base roads, provided the developer has provided assurance through a
performance bond, letter of credit or other financial security acceptable to the City Attorney ensuring the completion of
infrastructure.
X X
Expedited
review for affordable housing
1+1
Detached homes and attached homes in
groups of less than 6 units will receive expedited (3 business day) building permit
review for affordable housing. For each
building permit for an affordable home, a market rate unit will receive the same
expedited review.
X X X
Reduced
parking requirements
Reduced parking requirement of two spaces per three-bedroom dwelling. X X
DIVISION 5 – BUYER QUALIFICATION AND SUBSIDY RECAPTURE
38.43.120. – Qualification of buyers of affordable homes.
A. Lower-priced homes. To qualify for purchase of a lower-priced home, a buyer must meet
the following criteria:
1. A household income in the 65%-80% AMI range, as verified and certified by the city;
such certification must have been provided no more than one year prior to the closing
date of the purchase. Income verification will be performed using HUD’s online
income certification tool or a similar method that meets Code of Federal Regulations
this incentive may only do so if the affordable homes at 70% AMI constitute no more than 10% of the total units in a
development or the unit is to be constructed on a single lot wherein the parkland dedication requirement has not previously been provided.
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(CFR) 24 part 5, as amended, which adjusts gross incomes based on extraordinary
expenses and imputation of assets to income.
2. Maximum assets of $25,000. Assets will be determined using 24 CFR part 5.603, as
amended.
3. The household occupying the lower-priced home must meet the definition of
“Household” in 38.42.1420.
4. The buyer must meet one of the following definitions of “First-Time Homebuyer”:
a. An individual who has had no ownership interest in a principal residence during
the 3-year period ending with the date of purchase; or
b. A single parent whose only prior home was owned with a former spouse while
married; or
c. An individual who is a displaced homemaker and has only owned with a spouse;
or
d. An individual who has only owned a principal residence not permanently affixed
to a permanent foundation in accordance with applicable regulations; or
e. An individual who has only owned a property that was not in compliance with
state, local or model building codes and which cannot be brought into compliance
for less than the cost of construction a permanent structure.
5. The buyer must contribute at least $1,000 three percent of the home purchase
price towards the purchase of the home unless waived in writing by the city because
of extraordinary circumstances, such as death of primary or secondary income earner
or qualification as displaced homemaker.
6. The buyer must utilize conventional or government-insured fixed-rate first-mortgage
financing with a term of 15 to 30 years.
7. The household in a lower-priced home must occupy the home as its primary residence.
Lower-priced homes may not be rented to another party, since the intent of the
program is to provide these homes only for income-qualified owner occupants, with
the exception of rentals for a limited period of time necessitated by a family hardship
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or a temporary move for one year or less, if approved in advance by the city.
B. Moderate-priced homes. To purchase a moderate-priced home, a buyer must occupy the
home as ahis primary residence. The developer must provide evidence satisfactory to the
city verifying the initial owner will use the home as their primary residence at time of
sale.
38.43.130. – Subsidy recapture for lower-priced homes.
To ensure that the community investment in affordable housing is perpetuated and that
beneficiaries of affordable housing programs do not receive a windfall financial benefit, the city
requires repayment of subsidies as follows:
A. Requirement for repayment of cash subsidy. The buyer of a lower-priced home that
received cash support in the form of funds from the Affordable Housing Fund or other
funding through the city, including but not limited to down payment assistance, impact fee
payment, or other funding shall be required to repay the subsidy, at 0% interest, when the
dwelling or property is sold, transferred, refinanced or when the initial buyer who qualified
for the subsidy has failed to abide by the requirements of this article. The subsidy will be
recorded as a lien against the property at the Gallatin County Clerk and Recorders office.
B. Requirement for repayment of non-cash subsidy. Because most or all lower-priced homes
will be sold at a discount from market value, defined as the difference between the
appraised value and the maximum allowed price of a lower-priced home at the time of the
initial sale to a qualified buyer, the city commission finds that it gives a subsidy with cash
value to the initial buyer which may be recaptured under certain circumstances. Therefore,
upon resale or transfer of a lower-priced home, the city aims to further its housing
affordability goals by recapturing the principal amount of the subsidy by use of a lien in
favor of the city in that amount, which will be due and payable to the city, at 0% interest,
when the home is sold or transferred or when the initial buyer who qualified for the
affordable home has failed to abide by the terms of this article. The appraisal used to
calculate the amount of subsidy may be the appraisal obtained by the buyer’s mortgage
lender or, if that is not available, a professional appraisal provided by the purchaser.
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C. Use of repayments to the city. The city shall only use repayments of the lien amounts to
fund:
1. Down payment assistance for buyers of new or existing homes in Bozeman with
household incomes at or below 80% of AMI;
2. Affordable rental opportunities for residents of Bozeman with incomes at or below 60%
of AMI; or
3. Any other use approved by the city commission that increases affordable
homeownership opportunities for residents of Bozeman with income at or below 80%
of AMI.
DIVISION 6 – ADMINISTRATION AND ENFORCEMENT
38.43.140. – Administration.
A. Planning director authority. The Director of Community Development or designee an
agent designated by the city commission shall have authority to promulgate and enforce all
reasonable rules and regulations and take all actions necessary to the effective operation
and enforcement of this article, unless such authority is expressly reserved to the city
commission or another city official, including but not limited to:
1. Reviewing a developers’ affordable housing plan for compliance with this article;
2. Adopting all forms and prescribing the information to be given therein;
3. Monitoring developers’ compliance with their approved affordable housing plan,
notifying the developer of noncompliance, and ordering compliance;
4. Imposing any and all sanctions permitted by this article; and
5. Calculating the annual pricing targets for affordable homes and causing a sales price
schedule to be published. The planning director may make de minimis exceptions to
the factors considered in calculating the price targets.
B. Administrative manual. The city will publish administrative rules and instructions
approved by the city commission, including but not limited to instructions for completing
the affordable housing plan, valuations required by this article, and the distribution of the
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required number of affordable homes between the two affordable home categories and
required number of bedrooms. Such distribution by affordable home category shall be
based primarily upon an assessment by the city of housing needs among the income groups
corresponding to each affordable home category, but shall take into account the economic
impact on developments subject to the requirements of this article.
C. Verification of sales prices and income certification prior to closing. The City Manager
may create standards for documentation the city will use to verify the sale price of a home
created pursuant to this article. For the initial sale of an affordable home, the seller must
provide the city with a copy of the HUD-1 form prepared by an attorney or title company
indicating the sales price. The final sales price on the HUD-1 form may not exceed the
maximum price for a specific affordable home as described in the current price schedule
pursuant to section 38.43.050 plus an allowed maximum of $3,000 in buyer selected
upgrades, if allowed by the first mortgage lender underwriters. In addition, the city shall
require certification satisfactory to the city of homebuyer income qualification.
D. Monitoring completed sales. Upon receipt of a settlement statement for an affordable home,
the city will determine if the completed affordable home sale complies with the approved
affordable housing plan and the requirements of this article, and if not, respond to the non-
compliance as provided in section 38.43.150.
38.43.150. – Noncompliance; sanctions.
A. Discovery of noncompliance. If the city determines a developer subject to an affordable
housing plan has failed to comply with any terms or conditions of the affordable housing
plan or this article, the planning director or authorized agent shall notify the developer of
the noncompliance in writing and order compliance by the most reasonable and expeditious
means as determined by the city. Notification shall describe a date certain by which the
developer must be in full compliance (which may not be less than one week or more than
one year from the date of the notice), and shall describe: (i) the exact nature of the
noncompliance; and (ii) the possible sanctions for noncompliance with this notification.
B. Cancellation of incentives provided. If a developer sells a home for a price not in
compliance with the approved affordable housing plan or any other recorded
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documentation obligating developer to comply with this article, the developer must, prior
to the release by the city of the dwelling from the affordable housing plan or binding
agreement, pay the city the difference between the sales price and the price of the affordable
home as set out in the approved affordable housing plan.
C. Sanctions for noncompliance. In addition to other remedies available to the city pursuant
to this article, if on a date certain by which compliance has been ordered by the planning
director or authorized agent, the developer remains in noncompliance, the planning director
or authorized agent shall notify the City Attorney of the noncompliance and request that
sanctions be imposed. The city shall have the authority to impose one or more sanctions
including but not limited to the following which the city deems most effective and
appropriate considering the nature of the noncompliance:
1. Withholding or revoking building permits,
2. Issuing stop-work orders, and/or
3. Withholding certificates of occupancy.
(temporary)]”
Section 3
A new article shall be added to Chapter 38, BMC effective upon the occurrence of contingencies as stated
in Section 10 of this Ordinance to be entitled “Affordable Housing” to read as follows:
“[(Effective upon the occurrence of the contingencies provided for in Section 10 of this Ordinance)
ARTICLE 43
DIVISION 1. – FINDINGS AND PURPOSE.
38.43.010. - Legislative findings.
The city commission hereby finds:
A. The Bozeman Community Plan establishes a goal to encourage an adequate supply of
affordable housing and land for affordable housing in Bozeman. A lack of affordable
housing affects the ability of many residents to find housing which is adequate for their
basic housing needs. A lack of adequate housing affects health, social stability, and other
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issues which can have negative and intergenerational effects. To fulfill this goal, the
Community Plan establishes an objective to promote the development of a variety of
housing types, designs, and costs to meet the wide range of needs of Bozeman residents.
B. The Affordable Housing Action Plan: 2012 - 2016 (Action Plan) analyzed housing needs
and existing market conditions and determined housing affordability has become an acute
problem as demonstrated by the number of households paying over 30% of their incomes
for housing. A 2015 update to the city’s housing needs analysis (Action Plan Update)
concluded that the group of homebuyers with significant affordability gaps have incomes
at or below 80% of the area medium income and are in need of subsidies and/or below-
market home prices. The Action Plan Update also determined that buying opportunities are
increasingly scarce for homebuyers with incomes between 60% and 100% of AMI, and
that housing and land prices have increased faster than incomes for many of Bozeman’s
residents.
C. Since the adoption of the Bozeman Community Plan and the Action Plan, the median sales
price of housing has continued to climb. According to the Action Plan Update, as of the
end of November 2014, the median home price was $287,000.
D. The Action Plan Update states that the number of detached homes priced below $250,000,
a rough indicator of housing affordability for a family of three at 100% of AMI, has fallen
from 48.4% of the market in 2012 to just 18.6% in 2014.
E. There is a critical shortage of for-sale housing affordable to Bozeman households with
incomes at and below the area median income, as currently calculated by the U.S.
Department of Housing and Urban Development. As a result, some residents pay excessive
amounts of income for housing, reducing the amounts available for other necessities and a
decent and adequate standard of living.
F. Limited housing opportunities within the city requires households to seek housing outside
of the city limits which has a negative impact on transportation infrastructure by adding
unnecessary trips to the network. Increased driving distance to affordable housing also
negatively impacts air and water quality. To maintain a sufficient resident workforce in all
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fields of employment, and to ensure the public safety and general welfare of the residents
of the city of Bozeman, affordable housing needs must be addressed.
G. The city can achieve its goals of providing more affordable housing and its goal of
achieving an economically balanced community only if part of the new housing built is
affordable to households with low and moderate incomes.
H. The inclusionary housing regulations codified in this ordinance will substantially advance
the city’s legitimate interest in assuring that additional housing is built in the city that is
affordable to residents, including low- and moderate-income households and dispersed
throughout the city in order to encourage economic integration of the city’s residents.
I. This ordinance is adopted pursuant to the city’s self-governing powers and the city’s
independent general police power to protect public health, safety, and welfare. Requiring
affordable housing within certain developments is consistent with the community’s
housing goals of protecting the public welfare by fostering an adequate supply of housing
for persons at all economic levels and maintaining both economic diversity and
geographically dispersed affordable housing.
J. Requiring developers of newly created market-rate housing to provide some housing
affordable to low and moderate-income households is reasonably related to the impacts of
their projects because:
a. Rising land prices are a key factor in preventing development of new affordable
housing. New market-rate housing construction in Bozeman has generally created
strong and increasing demand for a finite stock of unbuilt land within the city, and thus
continues to drive up the price of remaining land. New development without affordable
units reduces the amount of land development opportunities available for the
construction of affordable housing.
b. New residents of market-rate housing place demands on services provided by both
public and private sectors, creating a demand for new employees. Some of these public
and private sector employees needed to meet the needs of the new residents earn
incomes only adequate to pay for affordable housing. Because affordable housing is in
short supply in the city, such employees may be forced to live in less than adequate
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housing within the city, pay a disproportionate share of their incomes to live in adequate
housing in the city, or commute ever increasing distances to their jobs from housing
located outside the city. These circumstances harm the city's ability to attain
employment and housing goals articulated in the Community Plan and place strains on
the city's ability to accept and service new market-rate housing development.
38.43.020. - Purpose.
The purpose of this article is to promote the public health, safety, and welfare by ensuring
that the affordable housing needs of the residents of Bozeman are addressed. In addition, the
purpose of this article is to ensure that quality housing is dispersed throughout Bozeman’s
neighborhoods for households of a variety of income levels including low- and moderate-income
residents to meet the goals of the Community Plan and the Action Plan by encouraging a mix of
housing types throughout the city and integrating affordable housing so as to not concentrate
affordable housing in a particular area.
In addition, the ordinance is intended to alleviate the impacts that would result from the use of
available residential land solely for the benefit of households that are able to afford market-rate
housing and to mitigate the service burden imposed by households in new market-rate residential
developments by making additional affordable housing available for service employees. The
ordinance is also intended to mitigate environmental and other impacts that accompany new
residential development by reducing traffic, transit and related air quality impacts, promoting
jobs/housing balance and reducing the demands placed on transportation infrastructure.
The ordinance provides residential developers with a menu of options from which to select
alternatives to the construction of inclusionary units on the same site as market-rate residential
developments, and provides incentives for housing developers to ensure houses are constructed
and sold in a manner that furthers the city’s affordable housing goals.
Finally, the ordinance provides incentives for housing developers who are not legally required to
comply with the requirements for construction of inclusionary housing, but nevertheless choose to
construct affordable housing.
DIVISION 2. – APPLICABILITY AND DEFINITIONS.
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38.43.030. – Applicability.
A. This article applies to:
1. Subdivisions and site plans which propose 10 or more market-rate homes, to be created
through development, new construction, substantial improvement or reuse.
2. Annexations where the net developable area of the annexing parcel when considering
the applicable zoning could result in 10 or more dwellings. In such a case, the
annexation agreement shall require the provision of affordable housing pursuant to this
article.
3. Developments seeking to use incentives to develop affordable housing.
B. Contiguous tracts under common ownership and control. A developer may not avoid the
requirements for construction of affordable homes by submitting piecemeal applications
for development. At the time of the initial application for approval of a subdivision or site
plan, the developer shall identify all contiguous property under common ownership and
control in the affordable housing plan required by section 38.43.100.
C. Development applications approved prior to the effective date of this article. A site plan or
subdivision having received sufficiency approval as of the effective date of this article or
a preliminary site plan or preliminary plat granted approval prior to the effective date of
this article may apply for one or more of the incentives described herein. Only that portion
of the amended preliminary plat or site plan pertaining to the request for approval of one
or more incentives will be subject to review. The requirements of section 38.19.130 for the
amendment of plans will not apply.
D. Newly proposed residential developments which include affordable housing in excess of
this article’s requirements for building affordable homes are eligible for incentives as
provided in section 38.43.130. Such request shall require the preliminary plat or site plan
to evidence compliance with all other requirements of this article.
E. Exemptions. Developments comprised exclusively of rental housing units are exempt from
these requirements.
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38.43.040. – Definitions.
1. Affordable housing or affordable home – A dwelling for purchase by an owner-occupant
that requires no more than 33% of a household’s income for housing payments and meets
the definition of a lower-priced home or moderate-priced home.
2. Area Median Income or AMI – As calculated by the U.S. Department of Housing and
Urban Development (HUD), AMI is the median income for a family of four within a
specific geographical area, such as Gallatin County. For each such region, HUD adjusts
this AMI calculation for households of different sizes and updates the calculations
annually based on estimated changes in area incomes. For purposes of this article, the city
hereby adopts HUD’s AMI calculations as an equitable and reasonable method to
determine affordability, based on percentages of AMI specified in this article.
3. Common ownership or control – “Common ownership or control” refers to property
owned or controlled by the same person, persons, or entity, or by separate entities in
which any shareholder, partner, member, or family member of an investor of the entity
owns ten percent (10%) or more of the interest in the property.
4. Developer – For purposes of this article, a developer is the person or legal entity, or their
successor(s) in interest who: (a) submits an affordable housing plan for a subject property
along with other submissions required for land use approvals, zoning, or permit reviews
by the city, and/or (b) is the owner of property subject to this article during the
development phase or a successor in title, such as a builder, obligated to implement the
affordable housing plan required by this article with respect to one or more lots or parcels
of land and/or (c) receives incentives for the production of affordable housing.
5. Liquid Assets – Assets such as cash, stocks, bonds or similar that can readily be
converted to cash with no significant loss in value, but excluding long retirement assets
such as IRA accounts, 401K accounts, pension funds, etc. Explicitly excluding retirement
6. Lower-priced home – Newly created dwelling for purchase, determined by the city in
accordance with this article to be affordable to a household with an income between 65%
and 80% of AMI.
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7. Market-rate home – Any dwelling subject to this article which is not an affordable home,
including detached dwellings, attached town houses, and condominium units but not
including housing units that are developed for exclusive use as a rental. The number of
market-rate homes in a development is used to determine the required number of affordable
homes, as described in this article.
8. Moderate-priced home – Newly created dwelling for purchase, affordable to a household
with an income between 81% and 100% of AMI.
DIVISION 3. – REQUIREMENTS.
38.43.050. – Requirement to build and sell affordable homes.
All development subject to this article must include affordable homes.
38.43.060. – Number of affordable homes required.
The number of affordable homes a developer is required to build is a percentage of the total
dwellings in the development plan.
A. The developer may:
1. Build and sell low-priced homes. 10% of the total dwellings constructed within the
subdivision or site plan must be built and sold at price targets as established by the city
pursuant to section 38.43.070 to households with incomes at or below 80% of AMI; or
2. Build and sell moderate-priced homes. 30% of the total dwellings proposed must be
sold at price targets as established by the city pursuant to section 38.43.070 to
households with incomes from 81% to 100% of AMI; or
3. Build and sell a mix of both types of homes. If a developer proposes a mix of both
lower-priced and moderate-priced homes, the developer starts with the 10% calculation
for lower-priced homes. For each lower-priced home eliminated from the resulting
number, the developer may substitute three moderate-priced homes.
The distribution of homes between the two categories of affordable homes will be
identified in the affordable housing plan required by section 38.43.100. In some cases, the
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city may prescribe the distribution of affordable homes to be built between the two
categories pursuant to section 38.43.170.
B. Fractions. If the calculation of the required number of affordable homes results in a
fraction of a home, this obligation will be satisfied by payment of a fee-in-lieu pursuant to
section 38.43.140 or by providing an additional moderate-priced home.
C. Calculating number of affordable homes in phased developments. It is anticipated that in
developments being built in phases, the number of market-rate homes may not be certain
at the time the developer submits the affordable housing plan pursuant to section 38.43.100.
In such cases, the developer must estimate the number of market-rate homes and number
of affordable homes required for all phases. If the number of homes in the first phase of
such development is certain at the time of the city’s approval of the affordable housing
plan, a separate affordable homes pricing and delivery schedule for that phase shall be
incorporated in the affordable housing plan at the time of development or construction of
each subsequent phase. As the number of homes in future phases becomes certain, the
affordable housing plan shall provide for subsequent affordable homes pricing and delivery
schedules for future phases of the development, consistent with the affordable housing plan
and section 38.43.070.B.
38.43.070. – Pricing of affordable homes.
A. The city will calculate on an annual basis the maximum sales price a developer may charge
for each category of affordable home required by this article as follows:
1. Lower-priced homes. The sales price for lower-priced homes affordable to buyer-
households with incomes from 65% to 80% of AMI will be calculated based on a
household income of 70% of AMI.
2. Moderate-priced homes. The sales price for moderate-priced homes affordable to
buyer-households with incomes from 81% to 100% of AMI will be calculated based
on a household income of 90% of AMI.
B. Affordable home sales price schedule.
1. The city will annually publish a schedule of sales prices for low-priced homes and
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moderate-priced homes within 30 calendar days of the HUD’s annual publication of
updated AMI calculations. The sales price schedule will be effective on the date of
publication by the city. The new sales price schedule will apply to applications for
building permits received after the effective date of the new sales price schedule. A
developer may request that a new sales price schedule apply to the sale of an affordable
home approved under a previous sales price schedule.
2. The city, at the city’s sole discretion, may recalculate the sales price schedule if
prevailing mortgage interest rates have increasedadjusted by 50 basis points or more
over the assumption used for the previous schedule.
3. Considerations. The following factors will be considered by the city in calculating the
sales price schedule. The Planning Director may make de minimis exceptions to
application of these factors:
a. AMI for the Bozeman area;
b. Gross monthly income will be calculated as the appropriate HUD AMI
calculations income divided by 12;
c. The maximum monthly payment will be 33% of gross monthly income. The
maximum monthly payment will include costs directly applicable to a mortgage
such as payment of principal, interest, as well as assumptions for typical costs of
taxes, public assessments, property insurance premiums, mortgage insurance
premiums (assuming the higher of either government or private mortgage insurance),
and homeowner/condominium association fees;
d. The interest rate will be determined by the city by a survey of at least three local
mortgage lenders, averaging their current rates for loans for homes with price
ranges within the low-priced homes range and the moderate-priced homes range;
e. The financing will be a conventional or government-insured fixed-rate loan with
a term of 15 to 30 years; and
f. A borrower will typically contribute $1,000 toward the purchase price.
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C. Household occupancy assumptions. To determine the maximum sales prices of affordable
homes with different numbers of bedrooms, the city will base its calculation on the AMIs
for households of different sizes, as follows:
1. Zero bedroom or studio unit – AMI for a one-person household;
2. One bedroom unit – AMI for a two-person household;
3. Two bedroom unit – AMI for a two or three-person household; and
4. Three bedroom unit or larger – AMI for a four-person household.
38.43.080. – Timing of delivery of affordable homes.
Required affordable homes must be provided in accordance with the following:
A. In each development in which more than one affordable home is required to be sold, the
affordable housing plan shall specify that affordable homes are to be sold concurrently and
in proportion to the sale of unimproved lots or market-rate homes. Such timing of
compliance will be represented in an affordable homes pricing and delivery schedule as
described in section 38.43.100.
B. A developer may build and sell affordable homes earlier than required in an affordable
housing plan.
38.43.090. – Minimum design and construction standards for affordable homes.
A. Required number of bedrooms in affordable homes. In each development subject to the
requirements of this article, affordable homes shall represent a mix of bedrooms per unit
as similar as possible (given rounding of numbers) to the mix of bedrooms per unit of the
market-rate homes in the development.
B. Standards for design and construction. The city shall define reasonable standards for the
design and construction of affordable homes to ensure livability and compatibility with
nearby market-rate homes in the development. Affordable homes may have different
interior finishes and features than other dwellings within the development, as long as the
finishes and features are functionally equivalent and of good quality. Finishes include, but
are not limited to, design and materials, the provision of appliances, cabinets, and floor
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treatment. Features include, but are not limited to, the numbers of bathrooms, garages and
parking areas, mechanical equipment and hookups, and green building features.
C. Amenities. Affordable homes shall have the same amenities as the market-rate homes in
the development, including the same access to and enjoyment of common open space and
facilities in the development.
38.43.100. – Submission of affordable housing plan; approval.
A. Affordable housing plan. The applicant for any development seeking to utilize the
incentives to create affordable housing or subject to the requirements of this article must
submit an affordable housing plan in a form provided by or approved by the city that
describes how the requirements of this article will be satisfied. When approved by the city,
the affordable housing plan must be incorporated by reference in the recorded subdivision
plat, site plan or annexation agreement. The applicant will provide only one affordable
housing plan to meet the requirements of this article.
B. Affordable housing plan as binding agreement. An affordable housing plan approved by
the city will be considered a binding contract between the developer and the developer’s
successors in interest to the lot or dwelling. Such plan will be included in a separate
recorded written agreement between the developer and the city, or incorporated into
another recorded document wherein the developer is required to implement the affordable
housing plan.
C. Contents of affordable housing plan. The affordable housing plan submitted by the
developer must include, at a minimum:
1. Number of affordable homes proposed in each affordable home category;
2. The number of bedrooms in each affordable home;
3. Number of market-rate homes in the development;
4. The number of bedrooms in each market-rate home;
5. Location of affordable homes in the development (lots in the plat or units within a site
plan);
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6. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development;
7. Marketing plan describing how affordable homes will be offered to the public;
8. Plan for construction of affordable homes in phased developments. It is anticipated
that in developments being built in phases, the number of market-rate homes may not
be certain at the time the developer submits the affordable housing plan. In such cases,
the developer must estimate the number of market-rate homes and number of affordable
homes for each phase. If the number of homes in the first phase of such development
is certain at the time of the city’s approval of the affordable housing plan, a separate
affordable homes pricing and delivery schedule for that phase shall be incorporated in
the affordable housing plan at the time of development or construction of each
subsequent phase. As the number of homes in future phases becomes certain, the
affordable housing plan shall provide for subsequent affordable homes pricing and
delivery schedules for future phases of the development, consistent with the affordable
housing plan; and
9. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article.
D. Pricing and delivery schedules in affordable housing plans. The affordable homes pricing
and delivery schedule shall be in the form of a chart that contains the numbers of required
affordable homes by bedroom count and affordable home category, and shall indicate the
current affordable home prices as calculated by the city.
E. Approval of affordable housing plan. The affordable housing plan will be reviewed as part
of the initial application approval process for the type of development proposed. A
condition shall be attached to the approval of any subdivision plat or site plan to require
recordation of the affordable housing plan or other separate agreement obligating the
developer to meet the requirements of this article.
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38.43.110. – Marketing, sales and occupancy of affordable homes.
Developers subject to this article shall market and sell affordable homes in accordance with
provisions described in the city’s published instructions for preparing affordable housing plans.
These provisions will address factors such as waiting list management, marketing materials,
responsibilities for marketing affordable homes, actions to be taken in the event of inability to
identify qualified buyers, procedures for certification of buyer eligibility, purchase contracts, and
full disclosures to buyers of their obligations and rights under this article.
38.43.120. – Recording requirements upon sale of affordable home.
The developer, or the city or its agent if the city is involved in the sale of an affordable home shall
cause to be recorded in the offices of the Gallatin County Clerk and Recorder, simultaneously with
the recording of the deed of conveyance, a restrictive covenant, deed of trust or other legal
instrument, approved as to form by the Bozeman City Attorney that fulfills the resale and recapture
requirements described in section 38.43.160.
DIVISION 4 – INCENTIVES
38.43.130. – Incentives available for affordable housing.
Developers may apply for incentives in conjunction with a development application by submitting
an affordable housing plan pursuant to section 38.43.100.
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Incentives Description
Lower-priced
homes
Moderate-
priced homes
70%
AMI
80%
AMI 90% AMI
Impact fee subsidy
Full or partial subsidization of impact fees, paid from municipal funds if such funds are available; such subsidization must be secured with a lien
instrument due upon sale, transfer or non-rate/term refinance of the home.
X X
Down payment assistance
Subject to the availability of funds, the city will
provide on a first-come first-served basis, down
payment assistance not to exceed $10,000 per home
benefiting households. Down-payment assistance will only be provided directly to the qualifying
homebuyer. This assistance shall be secured with a
lien instrument due upon sale, transfer or non-rate/term refinance of the home.
X X
Waiver of
subdivision pre-application
Waive pre-application for subdivision when 10% of units are designated for lower price homes.
X X
Reduction of parkland 1
Allow a 1:1 square foot reduction in the amount of
parkland dedication required per square foot of lot size for lower homes. If a developer provides more than the required number of lower priced homes, the
lot area square footage of the additional lower priced homes shall not further reduce the required parkland dedication.
X
Reduced
Minimum Lot Sizes
Per the provisions in this chapter, affordable homes
may utilize reduced setback requirements and reduced sized lots. The reduction in lot size shall be allowed to create an increase in maximum unit
density beyond the maximum currently allowed in a
given zoning district.
X X X
1 This incentive is available only until the city has approved affordable housing plan(s) that include the number of lower-priced homes at 70% AMI as established by commission resolution. In addition, a developer seeking to use
this incentive may only do so if the affordable homes at 70% AMI constitute no more than 10% of the total units in a development or the unit is to be constructed on a single lot wherein the parkland dedication requirement has not
previously been provided.
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Incentives Description
Lower-priced
homes
Moderate-
priced homes
70%
AMI
80%
AMI 90% AMI
Concurrent infrastructure housing
construction
Concurrent construction of infrastructure and housing development at the installation of gravel-base roads, provided the developer has provided
assurance through a performance bond, letter of credit or other financial security acceptable to the
City Attorney ensuring the completion of
infrastructure.
X X
Expedited
review for affordable housing
1+1
Detached homes and attached homes in groups of less than 6 units will receive expedited (3 business day) building permit review for affordable housing. For each
building permit for an affordable home, a market rate unit will receive the same expedited review.
X X X
Reduced parking
requirements
Reduced parking requirement of two spaces per three-
bedroom dwelling. X X
DIVISION 5 – ALTERNATIVE MEANS OF COMPLIANCE
38.43.140. – Alternative means of compliance; payments of fees-in-lieu.
A. Alternatives to building lower-priced homes. The city may authorize a developer otherwise
required to provide affordable homes within a development to provide an alternative means
of compliance of equal value to the affordable homes otherwise required to be constructed
pursuant to this article.
B. Allowable alternative means of compliance. If approved by the city, a developer may
satisfy the affordable housing requirements of this article by providing (i) a cash or in-kind
payment in lieu or (ii) a donation of land.
1. Payment of cash in lieu. Payment shall be made to the city of a payment of cash-in-
lieu per a fee schedule adopted annually by the city commission. For each required
affordable home not built, the cash-in-lieu amount will be the difference between the
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sales price of a lower-priced home according to the then-current schedule of affordable
home prices and the sales price of a market-rate home. The sale price for the market-
rate home will be based on a median sale price of dwellings of a similar type, location
and square footage for the prior two years. Cash-in-lieu payments shall be paid prior to
issuance of a certificate of occupancy for any dwelling or building in the development
subject to this article.
2. Donation of land. Credits for donation of house lots or multi-family parcels. The city
may accept donations to a city-designated community housing nonprofit entity of: (a)
ready-to-build house lots; or (b) parcels of land suitable for construction of affordable
multifamily housing. Restrictions on the donated lots or parcels will run with the land.
Such donations, if approved, will provide credits against this article’s requirements for
building lower-priced homes. The credits will be determined as follows:
a. House lots. The value of the lot or lots, as determined by a professional appraisal paid
for by the developer, will be divided by the city’s then-current average of cash-in-
lieu payments for homes of different sizes. The product of that division to two
decimal points will constitute the credit against the otherwise required number of
lower-priced homes.
b. Parcels of land. The city shall periodically adopt a valuation for donation of parcels
of land intended for multifamily development, for purposes of determining credits
against the number of affordable homes that would otherwise be required in a
development subject to this article. The parcel of land must be zoned R-4 for the
development of multi-family housing, such as R-3, R-4 and REMU.
C. Timing of delivery of alternative means of compliance.
1. Timing of providing in-lieu contributions. In-lieu contributions when permitted shall
be due and deliverable to the city before the recordation of the affordable housing plan.
A developer may propose an alternative to this requirement in which staged
contributions are made upon the predicted occurrence of certain events, such as the sale
of lots, which alternative may be approved at the sole discretion of the city.
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2. Staged delivery of in-lieu contributions. In the case of staged delivery of in-lieukind
contributions, when permitted, the city’s determination of the value of each
contribution shall take into account the differential financial value of payments that are
made later than recordation of the affordable housing plan using conventional methods
of discounting future cash flows to present value.
DIVISION 6 – BUYER QUALIFICATION AND SUBSIDY RECAPTURE
38.43.150. – Qualification of buyers of affordable homes.
A. Lower-priced homes. To qualify for purchase of a lower-priced home, a buyer must meet
the following criteria:
1. A household income in the 65%-80% AMI range, as verified and certified by the city;
such certification must have been provided no more than one year prior to the closing
date of the purchase. Income verification will be performed using HUD’s online
income certification tool or a similar method that meets Code of Federal Regulations
(CFR) 24 part 5, as amended, which adjusts gross incomes based on extraordinary
expenses and imputation of assets to income.
2. Maximum liquid assets of $25,000 at the time of income certification. Exceptions
may be granted by the Director of Community Development based on extraordinary
circumstances. Assets will be determined using 24 CFR part 5.603, as amended.
3. The household occupying the lower-priced home must meet the definition of
“Household” in 38.42.1420.
4. The buyer must meet one of the following definitions of “First-Time Homebuyer”:
a. An individual who has had no ownership interest in a principal residence during
the 3-year period ending with the date of purchase; or
b. A single parent whose only prior home was owned with a former spouse while
married; or
c. An individual who is a displaced homemaker and has only owned with a spouse;
or
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d. An individual who has only owned a principal residence not permanently affixed
to a permanent foundation in accordance with applicable regulations; or
e. An individual who has only owned a property that was not in compliance with
state, local or model building codes and which cannot be brought into compliance
for less than the cost of construction a permanent structure.
5. The buyer must contribute at least $1,000 towards the purchase of the home unless
waived in writing by the city because of extraordinary circumstances, such as death
of primary or secondary income earner or qualification as displaced homemaker.
6. The buyer must utilize conventional or government-insured fixed-rate first-mortgage
financing with a term of 15 to 30 years.
7. The household in a lower-priced home must occupy the home as its primary residence.
Lower-priced homes may not be rented to another party, since the intent of the
program is to provide these homes only for income-qualified owner occupants, with
the exception of rentals for a limited period of time necessitated by a family hardship
or a temporary move for one year or less, if approved in advance by the city.
B. Moderate-priced homes. To purchase a moderate-priced home, a buyer must occupy the
home as his a primary residence. The developer must provide evidence satisfactory to the
city verifying the initial owner will use the home as their primary residence at time of sale.
38.43.160. – Subsidy recapture for lower-priced homes.
To ensure that the community investment in affordable housing is perpetuated and that
beneficiaries of affordable housing programs do not receive a windfall financial benefit, the city
requires repayment of subsidies as follows:
A. Requirement for repayment of cash subsidy. The buyer of a lower-priced home that
received cash support in the form of funds from the Affordable Housing Fund or other
funding through the city, including but not limited to down payment assistance, impact fee
payment, or other funding shall be required to repay the subsidy, at 0% interest, when the
dwelling or property is sold, transferred, refinanced with equity converted to cash out or
when the initial buyer who qualified for the subsidy has failed to abide by the requirements
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of this article. The subsidy will be recorded as a lien against the property at the Gallatin
County Clerk and Recorders office.
B. Requirement for repayment of non-cash subsidy. Because most or all lower-priced homes
will be sold at a discount from market value, defined as the difference between the
appraised value and the maximum allowed price of a lower-priced home at the time of the
initial sale to a qualified buyer, the city commission finds that it gives a subsidy with cash
value to the initial buyer which may be recaptured under certain circumstances. Therefore,
upon resale or transfer of a lower-priced home, the city aims to further its housing
affordability goals by recapturing the principal amount of the subsidy by use of a lien in
favor of the city in that amount, which will be due and payable to the city, at 0% interest,
when the home is sold or transferred or when the initial buyer who qualified for the
affordable home has failed to abide by the terms of this article. The appraisal used to
calculate the amount of subsidy may be the appraisal obtained by the buyer’s mortgage
lender or, if that is not available, a professional appraisal provided by the purchaser.
C. Use of repayments to the city. The city shall only use repayments of the lien amounts to
fund:
1. Down payment assistance for buyers of new or existing homes in Bozeman with
household incomes at or below 80% of AMI;
2. Affordable rental opportunities for residents of Bozeman with incomes at or below 60%
of AMI; or
3. Any other use approved by the city commission that increases affordable
homeownership opportunities for residents of Bozeman with income at or below 80%
of AMI.
DIVISION 7 – ADMINISTRATION AND ENFORCEMENT
38.43.170. – Administration.
A. Planning director authority. The planning director or an agent designated by the city
commission shall have authority to promulgate and enforce all reasonable rules and
regulations and take all actions necessary to the effective operation and enforcement of this
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article, unless such authority is expressly reserved to the city commission or another city
official, including but not limited to:
1. Reviewing a developers’ affordable housing plan for compliance with this article;
2. Adopting all forms and prescribing the information to be given therein;
3. Monitoring developers’ compliance with this article, notifying the developer of
noncompliance, and ordering compliance;
4. Imposing any and all sanctions permitted by this article; and
5. Calculating the annual pricing targets for affordable homes and causing a sales price
schedule to be published. The planning director may make de minimis exceptions to
the factors considered in calculating the price targets.
B. Administrative manual. The city will publish administrative rules and instructions
approved by the city commission, including but not limited to instructions for completing
the affordable housing plan, valuations required by this article, and the distribution of the
required number of affordable homes between the two affordable home categories and
required number of bedrooms. Such distribution by affordable home category shall be
based primarily upon an assessment by the city of housing needs among the income groups
corresponding to each affordable home category, but shall take into account the economic
impact on developments subject to the requirements of this article.
C. Verification of sales prices and income certification prior to closing. The City Manager
may create standards for documentation the city will use to verify the sale price of a home
created pursuant to this article. For the initial sale of an affordable home, the seller must
provide the city with a copy of the HUD-1 form prepared by an attorney or title company
indicating the sales price. The final sales price on the HUD-1 form may not exceed the
maximum price for a specific affordable home as described in the current price schedule
pursuant to section 38.43.070 plus an allowed maximum of $3,000 in buyer selected
upgrades, if allowed by the first mortgage lender underwriters. In addition, the city shall
require certification satisfactory to the city of homebuyer income qualification.
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D. Monitoring completed sales. Upon receipt of a settlement statement for an affordable home,
the city will determine if the completed affordable home sale complies with the approved
affordable housing plan and the requirements of this article, and if not, respond to the non-
compliance as provided in section 38.43.180.
38.43.180. – Noncompliance; sanctions.
A. Discovery of noncompliance. If the city determines a developer subject to an affordable
housing plan has failed to comply with any terms or conditions of the affordable housing
plan or this article, the planning director or authorized agent shall notify the developer of
the noncompliance in writing and order compliance by the most reasonable and expeditious
means as determined by the city. Notification shall describe a date certain by which the
developer must be in full compliance (which may not be less than one week or more than
one year from the date of the notice), and shall describe: (i) the exact nature of the
noncompliance; and (ii) the possible sanctions for noncompliance with this notification.
B. Cancellation of incentives provided. If a developer sells a home for a price not in
compliance with the approved affordable housing plan or any other recorded
documentation obligating developer to comply with this article, the developer must, prior
to the release by the city of the dwelling from the affordable housing plan or binding
agreement, pay the city the difference between the sale price and the price of the affordable
home as set out in the approved affordable housing plan.
C. Sanctions for noncompliance. In addition to other remedies available to the city pursuant
to this article, if on a date certain by which compliance has been ordered by the planning
director or authorized agent, the developer remains in noncompliance, the planning director
or authorized agent shall notify the City Attorney of the noncompliance and request that
sanctions be imposed. The city shall have the authority to impose one or more sanctions
including but not limited to the following which the city deems most effective and
appropriate considering the nature of the noncompliance:
1. Withholding or revoking building permits,
2. Issuing stop-work orders, and/or
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3. Withholding or revoking certificates of occupancy.
Section 4
Contingent termination.
Section 2 terminates only on the occurrence of any of the contingencies provided for in Section
10 of this Ordinance.
Section 5
Savings clause.
Any approval or requirement applied to any subdivision or site plan created to Chapter 10, Article
8 (Workforce Housing) adopted, applied, imposed, or required prior to the effective date of this Ordinance
continues in full force and effect. Sections 1, 2, and 3 of this Ordinance does not affect the rights,
responsibilities, duties, or requirements imposed upon a subdivision or site plan pursuant to Chapter 10,
Article 8 (Workforce Housing) pursuant to a final approval of such prior to the 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 6
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 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 indicated in Sections 1 – 3.
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Section 9
Cross references and codification orders.
Any necessary cross reference to any portion of this Ordinance that is necessary to be made
elsewhere in the municipal code is hereby amended to reflect this Ordinance. The City Attorney is
authorized to issue codification orders to implement this Section.
Section 10
Effective date – Contingent effective date.
Sections 1 and 2 of this Ordinance shall be in full force and effect sixty (60) days after final
adoption. Section 3 of this Ordinance shall be effective upon the occurrence of any one of the following
contingencies:
i. If less than 14 (fourteen) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to September 12, 2016 and of these 14 affordable
homes no less than four (4) qualify as lower-priced homes; or
ii. If less than 27 (twenty seven) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to June 12, 2017 and of these 27 affordable homes no
less than seven (7) qualify as lower-priced homes; or
iii. If less than 54 (fifty four) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to December 12, 2017 and of these 54 affordable
homes no less than 12 (twelve) qualify as lower-priced homes.
Section 11
Applicability.
This Ordinance applies to applications received by the City on or after [the effective date of this
Ordinance].
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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 16th day of November, 2015.
____________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
____________________________________
STACY ULMEN, CMC
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
____________________, 2015. The effective date of this ordinance is __________, __, 2015.
____________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_______________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
_____________________________________
GREG SULLIVAN
City Attorney
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ORDINANCE NO. 1922
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA REPEALING CHAPTER 10, ARTICLE 8 OF THE BOZEMAN MUNICIPAL
CODE, ADOPTING A NEW ARTICLE REGARDING AFFORDABLE HOUSING TO
TERMINATE ONLY UPON THE OCCURRENCE OF CERTAIN CONTINGENCIES,
AND ADOPTING AN ARTICLE REGARDING AFFORDABLE HOUSING TO BE
EFFECTIVE ON THE OCCURRENCE OF SPECIFIC CONTINGENCIES AND
PROVIDING EFFECTIVE DATES
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY
OF BOZEMAN, MONTANA:
Section 1
Chapter 10, Article 8 of the Bozeman Municipal Code is repealed in its entirety.
Section 2
A new article shall be added to Chapter 38, BMC to be entitled “Affordable Housing” to read as follows:
“[(Temporary) ARTICLE 43
DIVISION 1. – FINDINGS AND PURPOSE.
38.43.010. - Legislative findings.
The city commission hereby finds:
A. The Bozeman Community Plan establishes a goal to encourage an adequate supply of
affordable housing and land for affordable housing in Bozeman. A lack of affordable
housing affects the ability of many residents to find housing which is adequate for their
basic housing needs. A lack of adequate housing affects health, social stability, and other
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issues which can have negative and intergenerational effects. To fulfill this goal, the
Community Plan establishes an objective to promote the development of a variety of
housing types, designs, and costs to meet the wide range of needs of Bozeman residents.
B. The Affordable Housing Action Plan: 2012 - 2016 (Action Plan) analyzed housing needs
and existing market conditions and determined housing affordability has become an acute
problem as demonstrated by the number of households paying over 30% of their incomes
for housing. A 2015 update to the city’s housing needs analysis (Action Plan Update)
concluded that the group of homebuyers with significant affordability gaps have incomes
at or below 80% of the area medium income and are in need of subsidies and/or below-
market home prices. The Action Plan Update also determined that buying opportunities are
increasingly scarce for homebuyers with incomes between 60% and 100% of AMI, and
that housing and land prices have increased faster than incomes for many of Bozeman’s
residents.
C. Since the adoption of the Bozeman Community Plan and the Action Plan, the median sales
price of housing has continued to climb. According to the Action Plan Update, as of the
end of November 2014, the median home price was $287,000.
D. The Action Plan Update states that the number of detached homes priced below $250,000,
a rough indicator of housing affordability for a family of three at 100% of AMI, has fallen
from 48.4% of the market in 2012 to just 18.6% in 2014.
E. There is a critical shortage of for-sale housing affordable to Bozeman households with
incomes at and below the area median income, as currently calculated by the U.S.
Department of Housing and Urban Development. As a result, some residents pay excessive
amounts of income for housing, reducing the amounts available for other necessities and a
decent and adequate standard of living.
F. Limited housing opportunities within the city requires households to seek housing outside
of the city limits which has a negative impact on transportation infrastructure by adding
unnecessary trips to the network. Increased driving distance to affordable housing also
negatively impacts air and water quality. To maintain a sufficient resident workforce in all
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fields of employment, and to ensure the public safety and general welfare of the residents
of the city of Bozeman, affordable housing needs must be addressed.
G. The city can achieve its goals of promoting the development of more affordable housing
and its goal of achieving an economically balanced community only if part of the new
housing built is affordable to households with low and moderate incomes.
H. The inclusionary housing regulations codified in this ordinance will substantially advance
the city’s legitimate interest in assuring that additional housing is built in the city that is
affordable to residents, including low- and moderate-income households and dispersed
throughout the city in order to encourage economic integration of the city’s residents.
I. This ordinance is adopted pursuant to the city’s self-governing powers and the city’s
independent general police power to protect public health, safety, and welfare.
Encouraging the construction of affordable housing within certain developments is
consistent with the community’s housing goals of protecting the public welfare by fostering
an adequate supply of housing for persons at all economic levels and maintaining both
economic diversity and geographically dispersed affordable housing.
J. Providing housing affordable to low and moderate-income households is reasonably
related to the impacts of newly created market-rate housing projects because:
1. Rising land prices are a key factor in preventing development of new affordable
housing. New market-rate housing construction in Bozeman has generally created
strong and increasing demand for a finite stock of unbuilt land within the city, and thus
continues to drive up the price of remaining land. New development without affordable
units reduces the amount of land development opportunities available for the
construction of affordable housing.
2. New residents of market-rate housing place demands on services provided by both
public and private sectors, creating a demand for new employees. Some of these public
and private sector employees needed to meet the needs of the new residents earn
incomes only adequate to pay for affordable housing. Because affordable housing is in
short supply in the city, such employees may be forced to live in less than adequate
housing within the city, pay a disproportionate share of their incomes to live in adequate
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housing in the city, or commute ever increasing distances to their jobs from housing
located outside the city. These circumstances harm the city's ability to attain
employment and housing goals articulated in the Community Plan and place strains on
the city's ability to accept and service new market-rate housing development.
38.43.020. - Purpose.
The purpose of this article is to promote the public health, safety, and welfare by
encouraging the creation of affordable housing for the residents of Bozeman. In addition, the
purpose of this article is to promote the dispersal of quality affordable housing throughout
Bozeman’s neighborhoods for households of a variety of income levels including low- and
moderate-income residents to meet the goals of the Community Plan and the Action Plan by
encouraging a mix of housing types throughout the city and integrating affordable housing so as
to not concentrate affordable housing in a particular area.
In addition, the ordinance is intended to alleviate the impacts that would result from the use of
available residential land solely for the benefit of households that are able to afford market-rate
housing and to mitigate the service burden imposed by households in new market-rate residential
developments by making additional affordable housing available for service employees. The
ordinance is also intended to mitigate environmental and other impacts that accompany new
residential development by reducing traffic, transit and related air quality impacts, promoting
jobs/housing balance and reducing the demands placed on transportation infrastructure.
The ordinance provides incentives for housing developers to ensure houses are constructed and
sold in a manner that furthers the city’s affordable housing goals.
DIVISION 2. – APPLICABILITY AND DEFINITIONS.
38.43.030. – Applicability.
This article applies to developments seeking to use incentives to develop affordable housing.
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38.43.040. – Definitions.
1. Affordable housing or affordable home – A dwelling for purchase by an owner-occupant
that requires no more than 33% of a household’s income for housing payments and meets
the definition of a lower-priced home or moderate-priced home.
2. Area Median Income or AMI – As calculated by the U.S. Department of Housing and
Urban Development (HUD), AMI is the median income for a family of four within a
specific geographical area, such as Gallatin County. For each such region, HUD adjusts
this AMI calculation for households of different sizes and updates the calculations
annually based on estimated changes in area incomes. For purposes of this article, the city
hereby adopts HUD’s AMI calculations as an equitable and reasonable method to
determine affordability, based on percentages of AMI specified in this article.
3. Developer – For purposes of this article, a developer is the person or legal entity, or their
successor(s) in interest who: (a) submits an affordable housing plan for a subject property
along with other submissions required for land use approvals, zoning, or permit reviews
by the city, and/or (b) is the owner of property subject to this article during the
development phase or a successor in title, such as a builder, obligated to implement an
approved affordable housing plan with respect to one or more lots or parcels of land
and/or (c) receives incentives for the production of affordable housing.
4. Lower-priced home – Newly created dwelling for purchase, determined by the city in
accordance with this article to be affordable to a household with an income between 65%
and 80% of AMI.
5. Market-rate home – Any dwelling subject to this article which is not an affordable home,
including detached dwellings, attached town houses, and condominium units but not
including housing units that are developed for exclusive use as a rental.
6. Moderate-priced home – Newly created dwelling for purchase, affordable to a household
with an income between 81% and 100% of AMI.
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DIVISION 3. – Reserved.
38.43.050. – Pricing of affordable homes.
A. The city will calculate on an annual basis the maximum sales price a developer may charge
for each category of affordable home included in a developer’s affordable housing plan as
follows:
1. Lower-priced homes. The sales price for lower-priced homes affordable to buyer-
households with incomes from 65% to 80% of AMI will be calculated based on a
household income of 70% of AMI.
2. Moderate-priced homes. The sales price for moderate-priced homes affordable to
buyer-households with incomes from 81% to 100% of AMI will be calculated based
on a household income of 90% of AMI.
B. Affordable home sales price schedule.
1. The city will annually publish a schedule of sales prices for low-priced homes and
moderate-priced homes within 30 calendar days of the HUD’s annual publication of
updated AMI calculations. The sales price schedule will be effective on the date of
publication by the city. The new sales price schedule will apply to applications for
building permits received after the effective date of the new sales price schedule. A
developer may request that a new sales price schedule apply to the sale of an affordable
home approved under a previous sales price schedule.
2. The city, at the city’s sole discretion, may recalculate the sales price schedule if
prevailing mortgage interest rates have increased by 50 basis points or more over the
assumption used for the previous schedule.
3. Considerations. The following factors will be considered by the city in calculating the
sales price schedule. The Planning Director may make de minimis exceptions to
application of these factors:
a. AMI for the Bozeman area;
b. Gross monthly income will be calculated as the appropriate HUD AMI
calculations income divided by 12;
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c. The maximum monthly payment will be 33% of gross monthly income. The
maximum monthly payment will include costs directly applicable to a mortgage
such as payment of principal, interest, as well as assumptions for typical costs of
taxes, public assessments, property insurance premiums, mortgage insurance
premiums (assuming the higher of either government or private mortgage insurance),
and homeowner/condominium association fees;
d. The interest rate will be determined by the city by a survey of at least three local
mortgage lenders, averaging their current rates for loans for homes with price
ranges within the low-priced homes range and the moderate-priced homes range;
e. The financing will be a conventional or government-insured fixed-rate loan with
a term of 15 to 30 years; and
f. A borrower will typically provide a down payment of 3% of the purchase price.
C. Household occupancy assumptions. To determine the maximum sales prices of affordable
homes with different numbers of bedrooms, the city will base its calculation on the AMIs
for households of different sizes, as follows:
1. Zero bedroom or studio unit – AMI for a one-person household;
2. One bedroom unit – AMI for a two-person household;
3. Two bedroom unit – AMI for a three-person household; and
4. Three bedroom unit or larger – AMI for a four-person household.
38.43.060. – Timing of delivery of affordable homes.
Affordable homes included in an approved affordable housing plan must be provided in
accordance with the following:
A. In each development in which more than one affordable home is proposed to be sold, the
affordable housing plan shall specify that affordable homes are to be sold concurrently and
in proportion to the sale of unimproved lots or market-rate homes. Such timing will be
represented in an affordable homes pricing and delivery schedule as described in section
38.43.080.
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B. A developer may sell affordable homes earlier than required in an affordable housing plan.
38.43.070. – Minimum design and construction standards for affordable homes.
A. Required numbers of bedrooms in affordable homes. In each development subject to the
requirements of an approved affordable housing plan, affordable homes shall represent a
mix of bedrooms per unit as similar as possible (given rounding of numbers) to the mix of
bedroom of the market-rate homes in the development.
B. Standards for design and construction. The city shall define reasonable standards for the
design and construction of affordable homes to ensure livability and compatibility with
nearby market-rate homes in the development. Affordable homes may have different
interior finishes and features than other dwellings within the development, as long as the
finishes and features are functionally equivalent and of good quality. Finishes include, but
are not limited to, design and materials, the provision of appliances, cabinets, and floor
treatment. Features include, but are not limited to, the numbers of bathrooms, garages and
parking areas, mechanical equipment and hookups, and green building features.
C. Amenities. Affordable homes shall have the same amenities as the market-rate homes in
the development, including the same access to and enjoyment of common open space and
facilities in the development.
38.43.080. – Submission of affordable housing plan; approval.
A. Affordable housing plan. The applicant for any development seeking to utilize the
incentives to create affordable housing must submit an affordable housing plan in a form
provided by or approved by the city that describes how the provisions of this article will
be satisfied. When approved by the city, the affordable housing plan must be incorporated
by reference in the recorded subdivision plat, site plan or annexation agreement.
B. Affordable housing plan as binding agreement. An affordable housing plan approved by
the city will be considered a binding contract between the developer and the developer’s
successors in interest to the lot or dwelling. Such plan will be included in a separate
recorded written agreement between the developer and the city, or incorporated into
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another recorded document wherein the developer is required to implement the affordable
housing plan.
C. Contents of affordable housing plan. The affordable housing plan submitted by the
developer must include, at a minimum:
1. Number of affordable homes proposed in each affordable home category;
2. The number of bedrooms in each affordable home;
3. Number of market-rate homes in the development;
4. The number of bedrooms in each market-rate home;
5. Location of affordable homes in the development (lots in the plat or units within a site
plan);
6. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development;
7. Marketing plan describing how affordable homes will be offered to the public; and
8. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article.
D. Pricing and delivery schedules in affordable housing plans. The affordable homes pricing
and delivery schedule shall be in the form of a chart that contains the numbers of required
affordable homes by bedroom count and affordable home category, and shall indicate the
current affordable home prices as calculated by the city.
E. Approval of affordable housing plan. The affordable housing plan will be reviewed as part
of the initial application approval process for the type of development proposed. A
condition shall be attached to the approval of any subdivision plat or site plan to require
recordation of the affordable housing plan or other separate agreement obligating the
developer to meet the requirements of this article.
38.43.090. – Marketing, sales and occupancy of affordable homes.
Developers subject to this article shall market and sell affordable homes in accordance with
provisions described in the city’s published instructions for preparing affordable housing plans.
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These provisions will address factors such as waiting list management, marketing materials,
responsibilities for marketing affordable homes, actions to be taken in the event of inability to
identify qualified buyers, procedures for certification of buyer eligibility, purchase contracts, and
full disclosures to buyers of their obligations and rights under this article.
38.43.100. – Recording requirements upon sale of affordable home.
A developer selling an affordable home shall cause to be recorded in the offices of the Gallatin
County Clerk and Recorder, simultaneously with the recording of the deed of conveyance, a
restrictive covenant, deed of trust or other legal instrument, approved as to form by the Bozeman
City Attorney that fulfills the resale and recapture requirements described in section 38.43.130.
DIVISION 4 – INCENTIVES
38.43.110. – Incentives available for affordable housing.
Developers may apply for incentives in conjunction with a development application by submitting
an affordable housing plan pursuant to section 38.43.080.
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Incentives Description Lower-priced homes
Moderate-
priced homes
70% AMI 80% AMI 90% AMI
Impact fee
subsidy
Full or partial subsidization of impact fees,
paid from municipal funds if such funds are
available; such subsidization must be
secured with a lien instrument due upon
sale, transfer or non-rate/term refinance of
the home.
X X
Down
payment
assistance
Subject to the availability of funds, the city
will provide on a first-come first-served
basis, down payment assistance not to
exceed $10,000 per home benefiting
households. Down-payment assistance will
only be provided directly to the qualifying
homebuyer. This assistance shall be secured
with a lien instrument due upon sale,
transfer or non-rate/term refinance of the
home.
X X
Waiver of
subdivision
pre-
application
Waive pre-application for subdivision when
10% of units are designated for lower price
homes.
X X
Reduction of
parkland 1
Allow a 1:1 square foot reduction in the
amount of parkland dedication required per
square foot of lot size for lower homes. If a
developer provides more than the required
number of lower priced homes, the lot area
square footage of the additional lower
priced homes shall not further reduce the
required parkland dedication.
X
Reduced
Minimum Lot
Sizes
Per the provisions in this chapter, affordable
homes may utilize reduced setback
requirements and reduced sized lots. The
reduction in lot size shall be allowed to
create an increase in maximum unit density
beyond the maximum currently allowed in a
given zoning district.
X X X
1 This incentive is available only until the city has approved affordable housing plan(s) that include the number of
lower-priced homes at 70% AMI as established by commission resolution. In addition, a developer seeking to use
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Incentives Description Lower-priced homes
Moderate-
priced homes
70% AMI 80% AMI 90% AMI
Concurrent
infrastructure
housing
construction
Concurrent construction of infrastructure
and housing development at the installation
of gravel-base roads, provided the developer
has provided assurance through a
performance bond, letter of credit or other
financial security acceptable to the City
Attorney ensuring the completion of
infrastructure.
X X
Expedited
review for
affordable
housing
1+1
Detached homes and attached homes in
groups of less than 6 units will receive
expedited (3 business day) building permit
review for affordable housing. For each
building permit for an affordable home, a
market rate unit will receive the same
expedited review.
X X X
Reduced
parking
requirements
Reduced parking requirement of two spaces
per three-bedroom dwelling. X X
DIVISION 5 – BUYER QUALIFICATION AND SUBSIDY RECAPTURE
38.43.120. – Qualification of buyers of affordable homes.
A. Lower-priced homes. To qualify for purchase of a lower-priced home, a buyer must meet
the following criteria:
1. A household income in the 65%-80% AMI range, as verified and certified by the city;
such certification must have been provided no more than one year prior to the closing
date of the purchase. Income verification will be performed using HUD’s online
income certification tool or a similar method that meets Code of Federal Regulations
this incentive may only do so if the affordable homes at 70% AMI constitute no more than 10% of the total units in a
development or the unit is to be constructed on a single lot wherein the parkland dedication requirement has not
previously been provided.
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(CFR) 24 part 5, as amended, which adjusts gross incomes based on extraordinary
expenses and imputation of assets to income.
2. Maximum assets of $25,000. Assets will be determined using 24 CFR part 5.603, as
amended.
3. The household occupying the lower-priced home must meet the definition of
“Household” in 38.42.1420.
4. The buyer must meet one of the following definitions of “First-Time Homebuyer”:
a. An individual who has had no ownership interest in a principal residence during
the 3-year period ending with the date of purchase; or
b. A single parent whose only prior home was owned with a former spouse while
married; or
c. An individual who is a displaced homemaker and has only owned with a spouse;
or
d. An individual who has only owned a principal residence not permanently affixed
to a permanent foundation in accordance with applicable regulations; or
e. An individual who has only owned a property that was not in compliance with
state, local or model building codes and which cannot be brought into compliance
for less than the cost of construction a permanent structure.
5. The buyer must contribute at least three percent of the home purchase price towards
the purchase of the home unless waived in writing by the city because of extraordinary
circumstances, such as death of primary or secondary income earner or qualification
as displaced homemaker.
6. The buyer must utilize conventional or government-insured fixed-rate first-mortgage
financing with a term of 15 to 30 years.
7. The household in a lower-priced home must occupy the home as its primary residence.
Lower-priced homes may not be rented to another party, since the intent of the
program is to provide these homes only for income-qualified owner occupants, with
the exception of rentals for a limited period of time necessitated by a family hardship
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or a temporary move for one year or less, if approved in advance by the city.
B. Moderate-priced homes. To purchase a moderate-priced home, a buyer must occupy the
home as his primary residence. The developer must provide evidence satisfactory to the
city verifying the initial owner will use the home as their primary residence at time of sale.
38.43.130. – Subsidy recapture for lower-priced homes.
To ensure that the community investment in affordable housing is perpetuated and that
beneficiaries of affordable housing programs do not receive a windfall financial benefit, the city
requires repayment of subsidies as follows:
A. Requirement for repayment of cash subsidy. The buyer of a lower-priced home that
received cash support in the form of funds from the Affordable Housing Fund or other
funding through the city, including but not limited to down payment assistance, impact fee
payment, or other funding shall be required to repay the subsidy, at 0% interest, when the
dwelling or property is sold, transferred, refinanced or when the initial buyer who qualified
for the subsidy has failed to abide by the requirements of this article. The subsidy will be
recorded as a lien against the property at the Gallatin County Clerk and Recorders office.
B. Requirement for repayment of non-cash subsidy. Because most or all lower-priced homes
will be sold at a discount from market value, defined as the difference between the
appraised value and the maximum allowed price of a lower-priced home at the time of the
initial sale to a qualified buyer, the city commission finds that it gives a subsidy with cash
value to the initial buyer which may be recaptured under certain circumstances. Therefore,
upon resale or transfer of a lower-priced home, the city aims to further its housing
affordability goals by recapturing the principal amount of the subsidy by use of a lien in
favor of the city in that amount, which will be due and payable to the city, at 0% interest,
when the home is sold or transferred or when the initial buyer who qualified for the
affordable home has failed to abide by the terms of this article. The appraisal used to
calculate the amount of subsidy may be the appraisal obtained by the buyer’s mortgage
lender or, if that is not available, a professional appraisal provided by the purchaser.
C. Use of repayments to the city. The city shall only use repayments of the lien amounts to
fund:
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1. Down payment assistance for buyers of new or existing homes in Bozeman with
household incomes at or below 80% of AMI;
2. Affordable rental opportunities for residents of Bozeman with incomes at or below 60%
of AMI; or
3. Any other use approved by the city commission that increases affordable
homeownership opportunities for residents of Bozeman with income at or below 80%
of AMI.
DIVISION 6 – ADMINISTRATION AND ENFORCEMENT
38.43.140. – Administration.
A. Planning director authority. The planning director or an agent designated by the city
commission shall have authority to promulgate and enforce all reasonable rules and
regulations and take all actions necessary to the effective operation and enforcement of this
article, unless such authority is expressly reserved to the city commission or another city
official, including but not limited to:
1. Reviewing a developers’ affordable housing plan for compliance with this article;
2. Adopting all forms and prescribing the information to be given therein;
3. Monitoring developers’ compliance with their approved affordable housing plan,
notifying the developer of noncompliance, and ordering compliance;
4. Imposing any and all sanctions permitted by this article; and
5. Calculating the annual pricing targets for affordable homes and causing a sales price
schedule to be published. The planning director may make de minimis exceptions to
the factors considered in calculating the price targets.
B. Administrative manual. The city will publish administrative rules and instructions
approved by the city commission, including but not limited to instructions for completing
the affordable housing plan, valuations required by this article, and the distribution of the
required number of affordable homes between the two affordable home categories and
required number of bedrooms. Such distribution by affordable home category shall be
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based primarily upon an assessment by the city of housing needs among the income groups
corresponding to each affordable home category, but shall take into account the economic
impact on developments subject to the requirements of this article.
C. Verification of sales prices and income certification prior to closing. The City Manager
may create standards for documentation the city will use to verify the sale price of a home
created pursuant to this article. For the initial sale of an affordable home, the seller must
provide the city with a copy of the HUD-1 form prepared by an attorney or title company
indicating the sales price. The final sales price on the HUD-1 form may not exceed the
maximum price for a specific affordable home as described in the current price schedule
pursuant to section 38.43.050 plus an allowed maximum of $3,000 in buyer selected
upgrades, if allowed by the first mortgage lender underwriters. In addition, the city shall
require certification satisfactory to the city of homebuyer income qualification.
D. Monitoring completed sales. Upon receipt of a settlement statement for an affordable home,
the city will determine if the completed affordable home sale complies with the approved
affordable housing plan and the requirements of this article, and if not, respond to the non-
compliance as provided in section 38.43.150.
38.43.150. – Noncompliance; sanctions.
A. Cancellation of incentives provided. If a developer fails to comply with the terms of the
approved affordable housing plan or any other recorded documentation obligating
developer to comply with this article, the developer must, prior to the release by the city of
the dwelling from the affordable housing plan or binding agreement, pay the city the cash
in lieu fee for each unconstructed dwelling or any dwelling not sold to an income qualified
household as defined in this article.
B. Discovery of noncompliance. If the city determines a developer subject to an affordable
housing plan has failed to comply with any terms or conditions of the affordable housing
plan or this article, the planning director or authorized agent shall notify the developer of
the noncompliance in writing and order compliance by the most reasonable and expeditious
means as determined by the city. Notification shall describe a date certain by which the
developer must be in full compliance (which may not be less than one week or more than
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one year from the date of the notice), and shall describe: (i) the exact nature of the
noncompliance; and (ii) the possible sanctions for noncompliance with this notification.
C. Sanctions for noncompliance. In addition to other remedies available to the city pursuant
to this article, if on a date certain by which compliance has been ordered by the planning
director or authorized agent, the developer remains in noncompliance, the planning director
or authorized agent shall notify the City Attorney of the noncompliance and request that
sanctions be imposed. The city shall have the authority to impose one or more sanctions
including but not limited to the following which the city deems most effective and
appropriate considering the nature of the noncompliance:
1. Withholding or revoking building permits,
2. Issuing stop-work orders, and/or
3. Withholding or revoking certificates of occupancy.
(temporary)]”
Section 3
A new article shall be added to Chapter 38, BMC effective upon the occurrence of contingencies as stated
in Section 10 of this Ordinance to be entitled “Affordable Housing” to read as follows:
“[(Effective upon the occurrence of the contingencies provided for in Section 10 of this Ordinance)
ARTICLE 43
DIVISION 1. – FINDINGS AND PURPOSE.
38.43.010. - Legislative findings.
The city commission hereby finds:
A. The Bozeman Community Plan establishes a goal to encourage an adequate supply of
affordable housing and land for affordable housing in Bozeman. A lack of affordable
housing affects the ability of many residents to find housing which is adequate for their
basic housing needs. A lack of adequate housing affects health, social stability, and other
issues which can have negative and intergenerational effects. To fulfill this goal, the
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Community Plan establishes an objective to promote the development of a variety of
housing types, designs, and costs to meet the wide range of needs of Bozeman residents.
B. The Affordable Housing Action Plan: 2012 - 2016 (Action Plan) analyzed housing needs
and existing market conditions and determined housing affordability has become an acute
problem as demonstrated by the number of households paying over 30% of their incomes
for housing. A 2015 update to the city’s housing needs analysis (Action Plan Update)
concluded that the group of homebuyers with significant affordability gaps have incomes
at or below 80% of the area medium income and are in need of subsidies and/or below-
market home prices. The Action Plan Update also determined that buying opportunities are
increasingly scarce for homebuyers with incomes between 60% and 100% of AMI, and
that housing and land prices have increased faster than incomes for many of Bozeman’s
residents.
C. Since the adoption of the Bozeman Community Plan and the Action Plan, the median sales
price of housing has continued to climb. According to the Action Plan Update, as of the
end of November 2014, the median home price was $287,000.
D. The Action Plan Update states that the number of detached homes priced below $250,000,
a rough indicator of housing affordability for a family of three at 100% of AMI, has fallen
from 48.4% of the market in 2012 to just 18.6% in 2014.
E. There is a critical shortage of for-sale housing affordable to Bozeman households with
incomes at and below the area median income, as currently calculated by the U.S.
Department of Housing and Urban Development. As a result, some residents pay excessive
amounts of income for housing, reducing the amounts available for other necessities and a
decent and adequate standard of living.
F. Limited housing opportunities within the city requires households to seek housing outside
of the city limits which has a negative impact on transportation infrastructure by adding
unnecessary trips to the network. Increased driving distance to affordable housing also
negatively impacts air and water quality. To maintain a sufficient resident workforce in all
fields of employment, and to ensure the public safety and general welfare of the residents
of the city of Bozeman, affordable housing needs must be addressed.
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G. The city can achieve its goals of providing more affordable housing and its goal of
achieving an economically balanced community only if part of the new housing built is
affordable to households with low and moderate incomes.
H. The inclusionary housing regulations codified in this ordinance will substantially advance
the city’s legitimate interest in assuring that additional housing is built in the city that is
affordable to residents, including low- and moderate-income households and dispersed
throughout the city in order to encourage economic integration of the city’s residents.
I. This ordinance is adopted pursuant to the city’s self-governing powers and the city’s
independent general police power to protect public health, safety, and welfare. Requiring
affordable housing within certain developments is consistent with the community’s
housing goals of protecting the public welfare by fostering an adequate supply of housing
for persons at all economic levels and maintaining both economic diversity and
geographically dispersed affordable housing.
J. Requiring developers of newly created market-rate housing to provide some housing
affordable to low and moderate-income households is reasonably related to the impacts of
their projects because:
a. Rising land prices are a key factor in preventing development of new affordable
housing. New market-rate housing construction in Bozeman has generally created
strong and increasing demand for a finite stock of unbuilt land within the city, and thus
continues to drive up the price of remaining land. New development without affordable
units reduces the amount of land development opportunities available for the
construction of affordable housing.
b. New residents of market-rate housing place demands on services provided by both
public and private sectors, creating a demand for new employees. Some of these public
and private sector employees needed to meet the needs of the new residents earn
incomes only adequate to pay for affordable housing. Because affordable housing is in
short supply in the city, such employees may be forced to live in less than adequate
housing within the city, pay a disproportionate share of their incomes to live in adequate
housing in the city, or commute ever increasing distances to their jobs from housing
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located outside the city. These circumstances harm the city's ability to attain
employment and housing goals articulated in the Community Plan and place strains on
the city's ability to accept and service new market-rate housing development.
38.43.020. - Purpose.
The purpose of this article is to promote the public health, safety, and welfare by ensuring
that the affordable housing needs of the residents of Bozeman are addressed. In addition, the
purpose of this article is to ensure that quality housing is dispersed throughout Bozeman’s
neighborhoods for households of a variety of income levels including low- and moderate-income
residents to meet the goals of the Community Plan and the Action Plan by encouraging a mix of
housing types throughout the city and integrating affordable housing so as to not concentrate
affordable housing in a particular area.
In addition, the ordinance is intended to alleviate the impacts that would result from the use of
available residential land solely for the benefit of households that are able to afford market-rate
housing and to mitigate the service burden imposed by households in new market-rate residential
developments by making additional affordable housing available for service employees. The
ordinance is also intended to mitigate environmental and other impacts that accompany new
residential development by reducing traffic, transit and related air quality impacts, promoting
jobs/housing balance and reducing the demands placed on transportation infrastructure.
The ordinance provides residential developers with a menu of options from which to select
alternatives to the construction of inclusionary units on the same site as market-rate residential
developments, and provides incentives for housing developers to ensure houses are constructed
and sold in a manner that furthers the city’s affordable housing goals.
Finally, the ordinance provides incentives for housing developers who are not legally required to
comply with the requirements for construction of inclusionary housing, but nevertheless choose to
construct affordable housing.
DIVISION 2. – APPLICABILITY AND DEFINITIONS.
38.43.030. – Applicability.
A. This article applies to:
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1. Subdivisions and site plans which propose 10 or more market-rate homes, to be created
through development, new construction, substantial improvement or reuse.
2. Annexations where the net developable area of the annexing parcel when considering
the applicable zoning could result in 10 or more dwellings. In such a case, the
annexation agreement shall require the provision of affordable housing pursuant to this
article.
3. Developments seeking to use incentives to develop affordable housing.
B. Contiguous tracts under common ownership and control. A developer may not avoid the
requirements for construction of affordable homes by submitting piecemeal applications
for development. At the time of the initial application for approval of a subdivision or site
plan, the developer shall identify all contiguous property under common ownership and
control in the affordable housing plan required by section 38.43.100.
C. Development applications approved prior to the effective date of this article. A site plan or
subdivision having received sufficiency approval as of the effective date of this article or
a preliminary site plan or preliminary plat granted approval prior to the effective date of
this article may apply for one or more of the incentives described herein. Only that portion
of the amended preliminary plat or site plan pertaining to the request for approval of one
or more incentives will be subject to review. The requirements of section 38.19.130 for the
amendment of plans will not apply.
D. Newly proposed residential developments which include affordable housing in excess of
this article’s requirements for building affordable homes are eligible for incentives as
provided in section 38.43.130. Such request shall require the preliminary plat or site plan
to evidence compliance with all other requirements of this article.
E. Exemptions. Developments comprised exclusively of rental housing units are exempt from
these requirements.
38.43.040. – Definitions.
1. Affordable housing or affordable home – A dwelling for purchase by an owner-occupant
that requires no more than 33% of a household’s income for housing payments and meets
the definition of a lower-priced home or moderate-priced home.
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2. Area Median Income or AMI – As calculated by the U.S. Department of Housing and
Urban Development (HUD), AMI is the median income for a family of four within a
specific geographical area, such as Gallatin County. For each such region, HUD adjusts
this AMI calculation for households of different sizes and updates the calculations
annually based on estimated changes in area incomes. For purposes of this article, the city
hereby adopts HUD’s AMI calculations as an equitable and reasonable method to
determine affordability, based on percentages of AMI specified in this article.
3. Common ownership or control – “Common ownership or control” refers to property
owned or controlled by the same person, persons, or entity, or by separate entities in
which any shareholder, partner, member, or family member of an investor of the entity
owns ten percent (10%) or more of the interest in the property.
4. Developer – For purposes of this article, a developer is the person or legal entity, or their
successor(s) in interest who: (a) submits an affordable housing plan for a subject property
along with other submissions required for land use approvals, zoning, or permit reviews
by the city, and/or (b) is the owner of property subject to this article during the
development phase or a successor in title, such as a builder, obligated to implement the
affordable housing plan required by this article with respect to one or more lots or parcels
of land and/or (c) receives incentives for the production of affordable housing.
5. Lower-priced home – Newly created dwelling for purchase, determined by the city in
accordance with this article to be affordable to a household with an income between 65%
and 80% of AMI.
6. Market-rate home – Any dwelling subject to this article which is not an affordable home,
including detached dwellings, attached town houses, and condominium units but not
including housing units that are developed for exclusive use as a rental. The number of
market-rate homes in a development is used to determine the required number of affordable
homes, as described in this article.
7. Moderate-priced home – Newly created dwelling for purchase, affordable to a household
with an income between 81% and 100% of AMI.
DIVISION 3. – REQUIREMENTS.
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38.43.050. – Requirement to build and sell affordable homes.
All development subject to this article must include affordable homes.
38.43.060. – Number of affordable homes required.
The number of affordable homes a developer is required to build is a percentage of the total
dwellings in the development plan.
A. The developer may:
1. Build and sell low-priced homes. 10% of the total dwellings constructed within the
subdivision or site plan must be built and sold at price targets as established by the city
pursuant to section 38.43.070 to households with incomes at or below 80% of AMI; or
2. Build and sell moderate-priced homes. 30% of the total dwellings proposed must be
sold at price targets as established by the city pursuant to section 38.43.070 to
households with incomes from 81% to 100% of AMI; or
3. Build and sell a mix of both types of homes. If a developer proposes a mix of both low-
priced and moderate-priced homes, the developer starts with the 10% calculation for
low-priced homes. For each low-priced home eliminated from the resulting number,
the developer may substitute three moderate-priced homes.
The distribution of homes between the two categories of affordable homes will be
identified in the affordable housing plan required by section 38.43.100. In some cases, the
city may prescribe the distribution of affordable homes to be built between the two
categories pursuant to section 38.43.170.
B. Fractions. If the calculation of the required number of affordable homes results in a
fraction of a home, this obligation will be satisfied by payment of a fee-in-lieu pursuant to
section 38.43.140 or by providing an additional moderate-priced home.
C. Calculating number of affordable homes in phased developments. It is anticipated that in
developments being built in phases, the number of market-rate homes may not be certain
at the time the developer submits the affordable housing plan pursuant to section 38.43.100.
In such cases, the developer must estimate the number of market-rate homes and number
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of affordable homes required for all phases. If the number of homes in the first phase of
such development is certain at the time of the city’s approval of the affordable housing
plan, a separate affordable homes pricing and delivery schedule for that phase shall be
incorporated in the affordable housing plan at the time of development or construction of
each subsequent phase. As the number of homes in future phases becomes certain, the
affordable housing plan shall provide for subsequent affordable homes pricing and delivery
schedules for future phases of the development, consistent with the affordable housing plan
and section 38.43.070.B.
38.43.070. – Pricing of affordable homes.
A. The city will calculate on an annual basis the maximum sales price a developer may charge
for each category of affordable home required by this article as follows:
1. Lower-priced homes. The sales price for lower-priced homes affordable to buyer-
households with incomes from 65% to 80% of AMI will be calculated based on a
household income of 70% of AMI.
2. Moderate-priced homes. The sales price for moderate-priced homes affordable to
buyer-households with incomes from 81% to 100% of AMI will be calculated based
on a household income of 90% of AMI.
B. Affordable home sales price schedule.
1. The city will annually publish a schedule of sales prices for low-priced homes and
moderate-priced homes within 30 calendar days of the HUD’s annual publication of
updated AMI calculations. The sales price schedule will be effective on the date of
publication by the city. The new sales price schedule will apply to applications for
building permits received after the effective date of the new sales price schedule. A
developer may request that a new sales price schedule apply to the sale of an affordable
home approved under a previous sales price schedule.
2. The city, at the city’s sole discretion, may recalculate the sales price schedule if
prevailing mortgage interest rates have increased by 50 basis points or more over the
assumption used for the previous schedule.
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3. Considerations. The following factors will be considered by the city in calculating the
sales price schedule. The Planning Director may make de minimis exceptions to
application of these factors:
a. AMI for the Bozeman area;
b. Gross monthly income will be calculated as the appropriate HUD AMI
calculations income divided by 12;
c. The maximum monthly payment will be 33% of gross monthly income. The
maximum monthly payment will include costs directly applicable to a mortgage
such as payment of principal, interest, as well as assumptions for typical costs of
taxes, public assessments, property insurance premiums, mortgage insurance
premiums (assuming the higher of either government or private mortgage insurance),
and homeowner/condominium association fees;
d. The interest rate will be determined by the city by a survey of at least three local
mortgage lenders, averaging their current rates for loans for homes with price
ranges within the low-priced homes range and the moderate-priced homes range;
e. The financing will be a conventional or government-insured fixed-rate loan with
a term of 15 to 30 years; and
f. A borrower will typically provide a down payment of 3% of the purchase price.
C. Household occupancy assumptions. To determine the maximum sales prices of affordable
homes with different numbers of bedrooms, the city will base its calculation on the AMIs
for households of different sizes, as follows:
1. Zero bedroom or studio unit – AMI for a one-person household;
2. One bedroom unit – AMI for a two-person household;
3. Two bedroom unit – AMI for a three-person household; and
4. Three bedroom unit or larger – AMI for a four-person household.
38.43.080. – Timing of delivery of affordable homes.
Required affordable homes must be provided in accordance with the following:
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A. In each development in which more than one affordable home is required to be sold, the
affordable housing plan shall specify that affordable homes are to be sold concurrently and
in proportion to the sale of unimproved lots or market-rate homes. Such timing of
compliance will be represented in an affordable homes pricing and delivery schedule as
described in section 38.43.100.
B. A developer may sell affordable homes earlier than required in an affordable housing plan.
38.43.090. – Minimum design and construction standards for affordable homes.
A. Required numbers of bedrooms in affordable homes. In each development subject to the
requirements of this article, affordable homes shall represent a mix of bedrooms as similar
as possible (given rounding of numbers) to the mix of bedrooms of the market-rate homes
in the development.
B. Standards for design and construction. The city shall define reasonable standards for the
design and construction of affordable homes to ensure livability and compatibility with
nearby market-rate homes in the development. Affordable homes may have different
interior finishes and features than other dwellings within the development, as long as the
finishes and features are functionally equivalent and of good quality. Finishes include, but
are not limited to, design and materials, the provision of appliances, cabinets, and floor
treatment. Features include, but are not limited to, the numbers of bathrooms, garages and
parking areas, mechanical equipment and hookups, and green building features.
C. Amenities. Affordable homes shall have the same amenities as the market-rate homes in
the development, including the same access to and enjoyment of common open space and
facilities in the development.
38.43.100. – Submission of affordable housing plan; approval.
A. Affordable housing plan. The applicant for any development seeking to utilize the
incentives to create affordable housing or subject to the requirements of this article must
submit an affordable housing plan in a form provided by or approved by the city that
describes how the requirements of this article will be satisfied. When approved by the city,
the affordable housing plan must be incorporated by reference in the recorded subdivision
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plat, site plan or annexation agreement. The applicant will provide only one affordable
housing plan to meet the requirements of this article.
B. Affordable housing plan as binding agreement. An affordable housing plan approved by
the city will be considered a binding contract between the developer and the developer’s
successors in interest to the lot or dwelling. Such plan will be included in a separate
recorded written agreement between the developer and the city, or incorporated into
another recorded document wherein the developer is required to implement the affordable
housing plan.
C. Contents of affordable housing plan. The affordable housing plan submitted by the
developer must include, at a minimum:
1. Number of affordable homes proposed in each affordable home category;
2. The number of bedrooms in each affordable home;
3. Number of market-rate homes in the development;
4. The number of bedrooms in each market-rate home;
5. Location of affordable homes in the development (lots in the plat or units within a site
plan);
6. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development;
7. Marketing plan describing how affordable homes will be offered to the public; and
8. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article.
D. Pricing and delivery schedules in affordable housing plans. The affordable homes pricing
and delivery schedule shall be in the form of a chart that contains the numbers of required
affordable homes by bedroom count and affordable home category, and shall indicate the
current affordable home prices as calculated by the city.
E. Approval of affordable housing plan. The affordable housing plan will be reviewed as part
of the initial application approval process for the type of development proposed. A
condition shall be attached to the approval of any subdivision plat or site plan to require
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recordation of the affordable housing plan or other separate agreement obligating the
developer to meet the requirements of this article.
38.43.110. – Marketing, sales and occupancy of affordable homes.
Developers subject to this article shall market and sell affordable homes in accordance with
provisions described in the city’s published instructions for preparing affordable housing plans.
These provisions will address factors such as waiting list management, marketing materials,
responsibilities for marketing affordable homes, actions to be taken in the event of inability to
identify qualified buyers, procedures for certification of buyer eligibility, purchase contracts, and
full disclosures to buyers of their obligations and rights under this article.
38.43.120. – Recording requirements upon sale of affordable home.
A developer selling an affordable home shall cause to be recorded in the offices of the Gallatin
County Clerk and Recorder, simultaneously with the recording of the deed of conveyance, a
restrictive covenant, deed of trust or other legal instrument, approved as to form by the Bozeman
City Attorney that fulfills the resale and recapture requirements described in section 38.43.160.
DIVISION 4 – INCENTIVES
38.43.130. – Incentives available for affordable housing.
Developers may apply for incentives in conjunction with a development application by submitting
an affordable housing plan pursuant to section 38.43.100.
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Incentives Description
Lower-priced
homes
Moderate-
priced homes
70%
AMI
80%
AMI 90% AMI
Impact fee
subsidy
Full or partial subsidization of impact fees, paid
from municipal funds if such funds are available;
such subsidization must be secured with a lien
instrument due upon sale, transfer or non-rate/term
refinance of the home.
X X
Down
payment
assistance
Subject to the availability of funds, the city will
provide on a first-come first-served basis, down
payment assistance not to exceed $10,000 per home
benefiting households. Down-payment assistance
will only be provided directly to the qualifying
homebuyer. This assistance shall be secured with a
lien instrument due upon sale, transfer or non-
rate/term refinance of the home.
X X
Waiver of
subdivision
pre-
application
Waive pre-application for subdivision when 10% of
units are designated for lower price homes.
X X
Reduction of
parkland 1
Allow a 1:1 square foot reduction in the amount of
parkland dedication required per square foot of lot
size for lower homes. If a developer provides more
than the required number of lower priced homes, the
lot area square footage of the additional lower priced
homes shall not further reduce the required parkland
dedication.
X
Reduced
Minimum Lot
Sizes
Per the provisions in this chapter, affordable homes
may utilize reduced setback requirements and
reduced sized lots. The reduction in lot size shall be
allowed to create an increase in maximum unit
density beyond the maximum currently allowed in a
given zoning district.
X X X
1 This incentive is available only until the city has approved affordable housing plan(s) that include the number of
lower-priced homes at 70% AMI as established by commission resolution. In addition, a developer seeking to use
this incentive may only do so if the affordable homes at 70% AMI constitute no more than 10% of the total units in a
development or the unit is to be constructed on a single lot wherein the parkland dedication requirement has not
previously been provided.
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Incentives Description
Lower-priced
homes
Moderate-
priced homes
70%
AMI
80%
AMI 90% AMI
Concurrent
infrastructure
housing
construction
Concurrent construction of infrastructure and
housing development at the installation of gravel-
base roads, provided the developer has provided
assurance through a performance bond, letter of
credit or other financial security acceptable to the
City Attorney ensuring the completion of
infrastructure.
X X
Expedited
review for
affordable
housing
1+1
Detached homes and attached homes in groups of less
than 6 units will receive expedited (3 business day)
building permit review for affordable housing. For each
building permit for an affordable home, a market rate unit
will receive the same expedited review.
X X X
Reduced
parking
requirements
Reduced parking requirement of two spaces per three-
bedroom dwelling. X X
DIVISION 5 – ALTERNATIVE MEANS OF COMPLIANCE
38.43.140. – Alternative means of compliance; payments of fees-in-lieu.
A. Alternatives to building lower-priced homes. The city may authorize a developer otherwise
required to provide affordable homes within a development to provide an alternative means
of compliance of equal value to the affordable homes otherwise required to be constructed
pursuant to this article.
B. Allowable alternative means of compliance. If approved by the city, a developer may
satisfy the affordable housing requirements of this article by providing (i) a cash or in-kind
payment in lieu or (ii) a donation of land.
1. Payment of cash in lieu. Payment shall be made to the city of a payment of cash-in-
lieu per a fee schedule adopted annually by the city commission. For each required
affordable home not built, the cash-in-lieu amount will be the difference between the
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sales price of a lower-priced home according to the then-current schedule of affordable
home prices and the sales price of a market-rate home. The sale price for the market-
rate home will be based on a median sale price of dwellings of a similar type, location
and square footage for the prior two years. Cash-in-lieu payments shall be paid prior to
issuance of a certificate of occupancy for any dwelling or building in the development
subject to this article.
2. Donation of land. Credits for donation of house lots or multi-family parcels. At the
city’s discretion, it may accept donations of: (a) ready-to-build house lots; or (b)
parcels of land suitable for construction of affordable multifamily housing. Such
donations, if approved, will provide credits against this article’s requirements for
building lower-priced homes. The credits will be determined as follows:
a. House lots. The value of the lot or lots, as determined by the city, will be divided by
the city’s then-current average of cash-in-lieu payments for homes of different sizes.
The product of that division to two decimal points will constitute the credit against
the otherwise required number of lower-priced homes.
b. Parcels of land. The city shall periodically adopt a valuation for donation of parcels
of land intended for multifamily development, for purposes of determining credits
against the number of affordable homes that would otherwise be required in a
development subject to this article. The parcel of land must be zoned R-4.
C. Timing of delivery of alternative means of compliance.
1. Timing of providing in-lieu contributions. In-lieu contributions when permitted shall
be due and deliverable to the city before the recordation of the affordable housing plan.
A developer may propose an alternative to this requirement in which staged
contributions are made upon the predicted occurrence of certain events, such as the sale
of lots, which alternative may be approved at the sole discretion of the city.
2. Staged delivery of in-lieu contributions. In the case of staged delivery of in-kind
contributions when permitted, the city’s determination of the value of each contribution
shall take into account the differential financial value of payments that are made later
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than recordation of the affordable housing plan using conventional methods of
discounting future cash flows to present value.
DIVISION 6 – BUYER QUALIFICATION AND SUBSIDY RECAPTURE
38.43.150. – Qualification of buyers of affordable homes.
A. Lower-priced homes. To qualify for purchase of a lower-priced home, a buyer must meet
the following criteria:
1. A household income in the 65%-80% AMI range, as verified and certified by the city;
such certification must have been provided no more than one year prior to the closing
date of the purchase. Income verification will be performed using HUD’s online
income certification tool or a similar method that meets Code of Federal Regulations
(CFR) 24 part 5, as amended, which adjusts gross incomes based on extraordinary
expenses and imputation of assets to income.
2. Maximum assets of $25,000. Assets will be determined using 24 CFR part 5.603, as
amended.
3. The household occupying the lower-priced home must meet the definition of
“Household” in 38.42.1420.
4. The buyer must meet one of the following definitions of “First-Time Homebuyer”:
a. An individual who has had no ownership interest in a principal residence during
the 3-year period ending with the date of purchase; or
b. A single parent whose only prior home was owned with a former spouse while
married; or
c. An individual who is a displaced homemaker and has only owned with a spouse;
or
d. An individual who has only owned a principal residence not permanently affixed
to a permanent foundation in accordance with applicable regulations; or
e. An individual who has only owned a property that was not in compliance with
state, local or model building codes and which cannot be brought into compliance
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for less than the cost of construction a permanent structure.
5. The buyer must contribute at least three percent of the home purchase price towards
the purchase of the home unless waived in writing by the city because of extraordinary
circumstances, such as death of primary or secondary income earner or qualification
as displaced homemaker.
6. The buyer must utilize conventional or government-insured fixed-rate first-mortgage
financing with a term of 15 to 30 years.
7. The household in a lower-priced home must occupy the home as its primary residence.
Lower-priced homes may not be rented to another party, since the intent of the
program is to provide these homes only for income-qualified owner occupants, with
the exception of rentals for a limited period of time necessitated by a family hardship
or a temporary move for one year or less, if approved in advance by the city.
B. Moderate-priced homes. To purchase a moderate-priced home, a buyer must occupy the
home as his primary residence. The developer must provide evidence satisfactory to the
city verifying the initial owner will use the home as their primary residence at time of sale.
38.43.160. – Subsidy recapture for lower-priced homes.
To ensure that the community investment in affordable housing is perpetuated and that
beneficiaries of affordable housing programs do not receive a windfall financial benefit, the city
requires repayment of subsidies as follows:
A. Requirement for repayment of cash subsidy. The buyer of a lower-priced home that
received cash support in the form of funds from the Affordable Housing Fund or other
funding through the city, including but not limited to down payment assistance, impact fee
payment, or other funding shall be required to repay the subsidy, at 0% interest, when the
dwelling or property is sold, transferred, refinanced or when the initial buyer who qualified
for the subsidy has failed to abide by the requirements of this article. The subsidy will be
recorded as a lien against the property at the Gallatin County Clerk and Recorders office.
B. Requirement for repayment of non-cash subsidy. Because most or all lower-priced homes
will be sold at a discount from market value, defined as the difference between the
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appraised value and the maximum allowed price of a lower-priced home at the time of the
initial sale to a qualified buyer, the city commission finds that it gives a subsidy with cash
value to the initial buyer which may be recaptured under certain circumstances. Therefore,
upon resale or transfer of a lower-priced home, the city aims to further its housing
affordability goals by recapturing the principal amount of the subsidy by use of a lien in
favor of the city in that amount, which will be due and payable to the city, at 0% interest,
when the home is sold or transferred or when the initial buyer who qualified for the
affordable home has failed to abide by the terms of this article. The appraisal used to
calculate the amount of subsidy may be the appraisal obtained by the buyer’s mortgage
lender or, if that is not available, a professional appraisal provided by the purchaser.
C. Use of repayments to the city. The city shall only use repayments of the lien amounts to
fund:
1. Down payment assistance for buyers of new or existing homes in Bozeman with
household incomes at or below 80% of AMI;
2. Affordable rental opportunities for residents of Bozeman with incomes at or below 60%
of AMI; or
3. Any other use approved by the city commission that increases affordable
homeownership opportunities for residents of Bozeman with income at or below 80%
of AMI.
DIVISION 7 – ADMINISTRATION AND ENFORCEMENT
38.43.170. – Administration.
A. Planning director authority. The planning director or an agent designated by the city
commission shall have authority to promulgate and enforce all reasonable rules and
regulations and take all actions necessary to the effective operation and enforcement of this
article, unless such authority is expressly reserved to the city commission or another city
official, including but not limited to:
1. Reviewing a developers’ affordable housing plan for compliance with this article;
2. Adopting all forms and prescribing the information to be given therein;
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3. Monitoring developers’ compliance with this article, notifying the developer of
noncompliance, and ordering compliance;
4. Imposing any and all sanctions permitted by this article; and
5. Calculating the annual pricing targets for affordable homes and causing a sales price
schedule to be published. The planning director may make de minimis exceptions to
the factors considered in calculating the price targets.
B. Administrative manual. The city will publish administrative rules and instructions
approved by the city commission, including but not limited to instructions for completing
the affordable housing plan, valuations required by this article, and the distribution of the
required number of affordable homes between the two affordable home categories and
required number of bedrooms. Such distribution by affordable home category shall be
based primarily upon an assessment by the city of housing needs among the income groups
corresponding to each affordable home category, but shall take into account the economic
impact on developments subject to the requirements of this article.
C. Verification of sales prices and income certification prior to closing. The City Manager
may create standards for documentation the city will use to verify the sale price of a home
created pursuant to this article. For the initial sale of an affordable home, the seller must
provide the city with a copy of the HUD-1 form prepared by an attorney or title company
indicating the sales price. The final sales price on the HUD-1 form may not exceed the
maximum price for a specific affordable home as described in the current price schedule
pursuant to section 38.43.070 plus an allowed maximum of $3,000 in buyer selected
upgrades, if allowed by the first mortgage lender underwriters. In addition, the city shall
require certification satisfactory to the city of homebuyer income qualification.
D. Monitoring completed sales. Upon receipt of a settlement statement for an affordable home,
the city will determine if the completed affordable home sale complies with the approved
affordable housing plan and the requirements of this article, and if not, respond to the non-
compliance as provided in section 38.43.180.
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38.43.180. – Noncompliance; sanctions.
A. Cancellation of incentives provided. If a developer fails to comply with the terms of the
approved affordable housing plan or any other recorded documentation obligating
developer to comply with this article, the developer must, prior to the release by the city of
the dwelling from the affordable housing plan or binding agreement, pay the city the cash
in lieu fee for each unconstructed dwelling or any dwelling not sold to an income qualified
household as defined in this article.
B. Discovery of noncompliance. If the city determines a developer subject to an affordable
housing plan has failed to comply with any terms or conditions of the affordable housing
plan or this article, the planning director or authorized agent shall notify the developer of
the noncompliance in writing and order compliance by the most reasonable and expeditious
means as determined by the city. Notification shall describe a date certain by which the
developer must be in full compliance (which may not be less than one week or more than
one year from the date of the notice), and shall describe: (i) the exact nature of the
noncompliance; and (ii) the possible sanctions for noncompliance with this notification.
C. Sanctions for noncompliance. In addition to other remedies available to the city pursuant
to this article, if on a date certain by which compliance has been ordered by the planning
director or authorized agent, the developer remains in noncompliance, the planning director
or authorized agent shall notify the City Attorney of the noncompliance and request that
sanctions be imposed. The city shall have the authority to impose one or more sanctions
including but not limited to the following which the city deems most effective and
appropriate considering the nature of the noncompliance:
1. Withholding or revoking building permits,
2. Issuing stop-work orders, and/or
3. Withholding or revoking certificates of occupancy.]”
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Section 4
Contingent termination.
Section 2 terminates only on the occurrence of any of the contingencies provided for in Section
10 of this Ordinance.
Section 5
Savings clause.
Any approval or requirement applied to any subdivision or site plan created to Chapter 10, Article
8 (Workforce Housing) adopted, applied, imposed, or required prior to the effective date of this Ordinance
continues in full force and effect. Sections 1, 2, and 3 of this Ordinance does not affect the rights,
responsibilities, duties, or requirements imposed upon a subdivision or site plan pursuant to Chapter 10,
Article 8 (Workforce Housing) pursuant to a final approval of such prior to the 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 6
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 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 indicated in Sections 1 – 3.
Section 9
Cross references and codification orders.
Any necessary cross reference to any portion of this Ordinance that is necessary to be made
elsewhere in the municipal code is hereby amended to reflect this Ordinance. The City Attorney is
authorized to issue codification orders to implement this Section.
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Section 10
Effective date – Contingent effective date.
Sections 1 and 2 of this Ordinance shall be in full force and effect sixty (60) days after final
adoption. Section 3 of this Ordinance shall be effective upon the occurrence of any one of the following
contingencies:
i. If less than 14 (fourteen) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to September 12, 2016 and of these 14 affordable
homes no less than four (4) qualify as lower-priced homes; or
ii. If less than 27 (twenty seven) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to June 12, 2017 and of these 27 affordable homes no
less than seven (7) qualify as lower-priced homes; or
iii. If less than 54 (fifty four) affordable homes, as defined in Section 2 of this Ordinance, are
constructed and sold as single household detached dwellings or townhomes and sold
cumulatively throughout the city prior to December 12, 2017 and of these 54 affordable
homes no less than 12 (twelve) qualify as lower-priced homes.
Section 11
Applicability.
This Ordinance applies to applications received by the City on or after [the effective date of this
Ordinance].
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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 ________________, 2015.
____________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
____________________________________
STACY ULMEN, CMC
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
____________________, 2015. The effective date of this ordinance is __________, __, 2015.
____________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_______________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
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