Affordable Housing Ordinance
The City Commission adopted the current Affordable Housing Ordinance (AHO), found in Division 38.380 of the municipal code, on September 27, 2022, in response to State legislative action. In 2021, the Montana Legislature passed House Bill 259, which prevents the City from requiring affordable housing in new developments. Since many other tools used to create affordable housing are also prohibited in Montana, the City turned to voluntary incentives to encourage developers to build affordable homes. The current AHO is a response to this policy context.
To develop the current AHO, the City conducted an extensive review of the existing code, identified alternatives, and chose those that would best encourage the construction of new affordable housing. So far, the ordinance has created 387 affordable units with 1,079 more in the project pipeline across 15 projects.
In July 2024, the City Commission asked staff to propose revisions to the AHO, which fall into three categories:
- Administrative changes to provide clarity in its application.
- Enhancements to better incentivize the voluntary creation of new affordable housing units.
- Amend or remove the deep incentives in response to current market conditions and substantial public feedback.
The AHO includes two areas of incentivization known as the “shallow” and “deep” incentives, each option requiring a number of units to be set at a certain Area Median Income (AMI) in exchange for defined code relaxations. Over the next few months, we will be consulting with the public and City boards to evaluate alternatives and share their priorities. We appreciate your engagement on this critical topic for Bozeman!
