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Bozeman says hundreds of affordable housing units are in the pipeline

An economic development staff member provided a presentation on outcomes from the affordable housing action plan to the city commission on Tuesday.
An economic development staff member provided a presentation on outcomes from the affordable housing action plan to the city commission on Tuesday.

City of Bozeman officials are making progress with the tools they have available to create more affordable housing, but it may not be enough to keep up with demand.

When the city adopted its community housing action plan in 2019, a needs assessment showed 5,800 units would be needed by 2025 to address the housing shortfall for residents and workers.

YPR asked the city how many units have been added towards this goal, but that data was not available by deadline.

Economic Development Manager David Fine told YPR the 5,800 number needs to be revised as the goal was set pre-Covid and market dynamics have changed.

“Whatever those goals are, we need to build over a thousand units of housing a year at all price points in order to reach those goals and due to constraints in the availability of construction labor we have never really been able to build that number of units whether they are market-based units or affordable units,” he said.

Fine provided an update to the city commission on Tuesday on how many units have gone into the pipeline the past two years since the city shifted to an incentive-based affordable housing strategy after the Montana legislature banned inclusionary zoning, a primary tool the city had been using.

“In the past two years we’ve been able to advance 11 affordable developments with 1,774 new units of housing total and of those units 592 will be income restricted for at least 30 years. We think that’s a pretty good success in a two year stretch,” he said.

Fine’s presentation to the commission highlighted the various tools the city is utilizing and the affordable developments in the pipeline, including the Lumberyard Project that will create 155 affordable units.

The project near the 19th avenue commercial corridor will receive $7.5 million in tax increment financing where the developer’s eligible public infrastructure costs are reimbursed from tax revenue that’s generated from the project.

The development is also slated to receive $2.5 million of gap financing from the recently formed Gallatin Community Housing Impact Fund. The city put a $1 million grant towards the fund that will be combined with funding from investors to support workforce housing projects.

Other strategies the city is using include code changes that promote density, working with land trusts, and putting $3.5 million towards community housing in fiscal year 2024, among others.

Fine tells YPR a new assessment looking at the number of units needed will soon be conducted as part of an anticipated update to the city’s community housing action plan.

Olivia Weitz covers Bozeman and surrounding communities in Southwest Montana for Yellowstone Public Radio. She has reported for Northwest News Network and Boise State Public Radio and previously worked at a daily print newspaper. She is a graduate of the University of Puget Sound and the Transom Story Workshop.