Fifty years ago, my grandpa saved up and bought a modest house on a small lot in the middle of Missoula for $15,000. Today, the median price for a single-family home is over $400,000.
In growing areas across Montana, the prospects for an average worker to achieve the dream of home ownership like my grandpa — or even simply find any affordable place to live — are increasingly bleak. The consensus emerging from experts is the supply of homes isn’t keeping up with demand.
The answer is obvious: build more homes. What’s less obvious are the dynamics holding back development. It’s time for our state and local leaders to set aside their differences and listen closely to residents demanding attention to this issue.
In the 2021 County Community Survey, 67% of Missoulians said boosting the supply of affordable housing should be the top priority for Missoula County. Most respondents prioritized boosting the supply of housing before expanding subsidy programs, indicating discontent with current subsidies and housing initiatives. As a resident explained:
“Nearly every option on the list above is a subsidy or an after-market intervention, both of which are more challenging and expensive when supply is low and demand is high!”
Despite not being listed as an option on the survey, numerous residents said they are hoping for a more well-rounded (and less costly) approach to boosting the supply of affordable housing, calling out overly restrictive zoning and land use regulations that need reform. One resident’s solution:
"WITHOUT USING ANY MONEY AT ALL, open up zoning in single family neighborhoods in Missoula to all types of housing. No minimum lot sizes, no parking requirements, very little height restrictions etc."
Research backs up this idea, with studies showing that such regulations have substantial effects on the price of homes. A 2018 report from the Missoula Organization of Realtors found 93% of Missoula County had constraints limiting housing development. A more recent report showed it takes an astonishing 138 months on average to move a residential subdivision through combined city and county approval. Once approved, developers must then undergo months of building permit review before actually starting construction.
A growing number of experts and leaders from across the political spectrum have started calling for reform. President Barack Obama developed a toolkit in 2016 providing suggestions for local governments to streamline housing permits and loosen up land-use regulations. In a 2019 executive order, President Donald Trump called regulations “the leading factor in the growth of housing prices” and said “subsidies will only continue to mask the true cost of these onerous regulatory barriers.” Montana Gov. Greg Gianforte said recently “The most effective way to address housing affordability challenges is to reduce the panoply of regulations faced by housing development.”
Residents, local organizations, experts, governors and even presidents all see government regulations as the biggest barrier to affordable housing, yet local officials seem to be focused primarily on government solutions. Case in point: omitting any mention of regulatory reform in the 2021 Missoula County Community Survey. This spring, officials lambasted the Legislature for prohibiting certain zoning mandates, Bozeman is considering an “affordable housing tax” to pay for housing subsidies and Missoula has even resorted to buying up property directly in the inflated market.
Residents appear to understand that subsidies will fall short if they are not accompanied by regulatory reforms that reduce barriers to housing supply. Local leaders ought to take note. To address affordable housing, Montana needs a well-rounded approach that prioritizes regulatory reform.
Kendall Cotton is the president and CEO of the Frontier Institute, a Helena think tank dedicated to breaking down government barriers so that all Montanans can thrive.