Water Adequacy for Residential Development

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On November 4, Bozeman voters will see a ballot question related to water and residential development on their ballot. The WARD citizen special interest group initiative would change the city of Bozeman’s development code, requiring developers of three or more residential units to pay cash-in-lieu of water rights to the city only if the development designates 33% or more of the units as affordable. If the developer does not include 33% affordable units, they are responsible for securing water rights, which, because of state water rights processes, could take 5-8 years. The WARD initiative also removes the ability for developers to meet the water demand of their development through off-site water efficiency or conservation measures. Check out the full description of the initiative. The Initiative was not developed by the City of Bozeman. The City is, however, providing educational information on the Initiative.

Get the Facts on Our Water and Housing:

  • Since 2022, we have 1777 affordable units built, under construction, or in the pipeline

  • Since 2022, $120M has been spent in subsidies on those projects

  • Bozeman residents continue to excel in water conservation, using 188 gallons of water per household per day compared to 314 GPHD in other arid Western states

Get the Facts on Our Water:

Bozeman is not at risk of running out of water. When new housing is proposed, the city ensures there is enough water to support it. Based on the 2024 water use numbers, in a normal water year, the city only uses about 43% of its available supply, and even in a drought year, that number rises to just 60%. Bozeman’s water comes from three main sources—Lyman Spring, Bozeman Creek, and Hyalite Creek, with the Hyalite Reservoir. 

To carefully manage demand, the city uses a Water Supply & Optimization Tool that monitors current usage, projects future needs, and tracks available resources. This tool is critical to ensure the city continues to develop new supplies to meet the needs of our growing community. New water supplies are being developed as prioritized in the City’s Integrated Water Resources Plan. In addition, Bozeman continues to strengthen its long-term water sustainability by developing new conservation measures and following its 2023 Water Conservation Plan.

Get the Facts on Affordable Housing:

Building affordable housing is costly because of rising land, labor, material, and lending expenses. A city study found that developers can typically only make about 5% of their units affordable, as higher percentages aren’t financially viable. 

To address this, the city is partnering with public, private, and nonprofit organizations and shaping policies based on local data and community input to balance affordability, growth, and neighborhood character.

Get the Facts on the Impacts of the WARD Initiative:

The WARD Initiative’s requirement that housing developments of three or more units ensure 33% of units in new developments are affordable in order to access the city’s cash-in-lieu of water rights could limit housing supply. 

Even in housing projects that receive significant government subsidies, developers depend on a balance of market-rate and affordable units to cover construction costs. The result is that WARD’s high affordability requirement (33%) could make it harder for a developer to secure financing, resulting in less interest in building housing in the city. If developers choose not to build in Bozeman, demand for housing in the city may rise without the housing supply to match, driving up prices. Some may instead build in surrounding areas like the County, which could increase commuting and harm the environment.

Additional Information:

This website and related City efforts to educate voters on this initiative are not intended to advocate for or against the initiative; rather, the educational effort is to bring to light how the initiative will affect city operations, including how the City works to accommodate the development of new housing in our community and the City’s effort to provide our community the water it relies on.

We invite all to use our Question-and-Answer feature on this page to learn more.

On November 4, Bozeman voters will see a ballot question related to water and residential development on their ballot. The WARD citizen special interest group initiative would change the city of Bozeman’s development code, requiring developers of three or more residential units to pay cash-in-lieu of water rights to the city only if the development designates 33% or more of the units as affordable. If the developer does not include 33% affordable units, they are responsible for securing water rights, which, because of state water rights processes, could take 5-8 years. The WARD initiative also removes the ability for developers to meet the water demand of their development through off-site water efficiency or conservation measures. Check out the full description of the initiative. The Initiative was not developed by the City of Bozeman. The City is, however, providing educational information on the Initiative.

Get the Facts on Our Water and Housing:

  • Since 2022, we have 1777 affordable units built, under construction, or in the pipeline

  • Since 2022, $120M has been spent in subsidies on those projects

  • Bozeman residents continue to excel in water conservation, using 188 gallons of water per household per day compared to 314 GPHD in other arid Western states

Get the Facts on Our Water:

Bozeman is not at risk of running out of water. When new housing is proposed, the city ensures there is enough water to support it. Based on the 2024 water use numbers, in a normal water year, the city only uses about 43% of its available supply, and even in a drought year, that number rises to just 60%. Bozeman’s water comes from three main sources—Lyman Spring, Bozeman Creek, and Hyalite Creek, with the Hyalite Reservoir. 

To carefully manage demand, the city uses a Water Supply & Optimization Tool that monitors current usage, projects future needs, and tracks available resources. This tool is critical to ensure the city continues to develop new supplies to meet the needs of our growing community. New water supplies are being developed as prioritized in the City’s Integrated Water Resources Plan. In addition, Bozeman continues to strengthen its long-term water sustainability by developing new conservation measures and following its 2023 Water Conservation Plan.

Get the Facts on Affordable Housing:

Building affordable housing is costly because of rising land, labor, material, and lending expenses. A city study found that developers can typically only make about 5% of their units affordable, as higher percentages aren’t financially viable. 

To address this, the city is partnering with public, private, and nonprofit organizations and shaping policies based on local data and community input to balance affordability, growth, and neighborhood character.

Get the Facts on the Impacts of the WARD Initiative:

The WARD Initiative’s requirement that housing developments of three or more units ensure 33% of units in new developments are affordable in order to access the city’s cash-in-lieu of water rights could limit housing supply. 

Even in housing projects that receive significant government subsidies, developers depend on a balance of market-rate and affordable units to cover construction costs. The result is that WARD’s high affordability requirement (33%) could make it harder for a developer to secure financing, resulting in less interest in building housing in the city. If developers choose not to build in Bozeman, demand for housing in the city may rise without the housing supply to match, driving up prices. Some may instead build in surrounding areas like the County, which could increase commuting and harm the environment.

Additional Information:

This website and related City efforts to educate voters on this initiative are not intended to advocate for or against the initiative; rather, the educational effort is to bring to light how the initiative will affect city operations, including how the City works to accommodate the development of new housing in our community and the City’s effort to provide our community the water it relies on.

We invite all to use our Question-and-Answer feature on this page to learn more.

  • Water Video

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    Still have questions on the water side of WARD? Learn more about the Water Adequacy for Residential Development initiative from Shawn Kohtz, our Utilities Director, in this video.

    Shawn explains that we still have room to grow in our current water supply. And if a developer had to get a water right to develop, a process that takes at least 5-8 years with no guarantees, it may not be able to be used at our treatment facilities. That could lead to standalone water systems and an increase in staffing to manage those, which would be more costly to ratepayers.


  • Watch our Video

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    Sit down with David Fine, our Economic Development Manager, in this video and learn all about the housing side of WARD.

    David explains the factors that go into the cost of building a home and why subsidies are a critical component in making affordable housing happen. Without subsidies, building affordable housing often doesn’t pencil out.

    Curious about the numbers? Check out our one page summary of the third-party analysis on WARD.

  • Q+A in One Week

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    Can’t make our Q&A on October 6 at 6 PM at HRDC’s Market Place? Learn more by watching our virtual presentation!

    Use the Q&A function on this page to ask your question virtually, and we’ll provide a response. Thank you!

  • EPS Study

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    The City of Bozeman recently retained Economic Planning Systems (EPS) to look at the Water Adequacy for Residential Development (WARD) initiative’s requirement that a residential development of three or more units seeking to meet its water demand using the City’s cash-in-lieu of water rights provide 33% of the homes at affordable rates. EPS’ analysis includes what the 33% requirement would do to a project attempting to be built in the current market.

    According to the study, a 30-unit single-family home market-rate development without affordability requirements could make a 10% profit in today’s market. With WARD in effect, that same development may lose $25,000 per home, for a total loss of 4%. The model also looked at a 90-unit apartment complex. According to the report, such developments are not currently feasible in today’s market without affordability requirements, and WARD increases the funding needed to make a profit by $2.6 million.

    View the slide deck report in the documents section of the website. You can also watch their City Commission presentation here.

  • Heads Up on Ballot Language

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    Heads up as we get closer to Election Day: as required by Montana law, the ballot contains a statement of purpose but does not contain the full text of the ordinance the initiative seeks to adopt. The text of the complete ordinance the initiative seeks can be found here. The ballot language is below:

    "The Bozeman Water Adequacy Initiative amends 38.410.130.D of the Bozeman Municipal Code to allow development to pay cash-in-lieu of water rights only if the development provides 33% or more of the dwelling units as restricted by deed for 99 years or as long as the law allows and sold at 120% or less of area median income (AMI) or rented at 60% or less of AMI. This applies to all residential development of three units or more. The initiative also repeals the ability of residential development to satisfy its water adequacy requirements by implementing offsite water efficiency or conservation measures."

  • Come to our Q&A!

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    If you want the facts from the City on water and housing and how that relates to the WARD citizen initiative, please come to our Q&A:

    Q&A on WARD

    October 6 at 6 PM

    HRDC Market Place, 206 E Griffin Drive

    We will start with a presentation before moving to Q&A. Hope to see you there!

  • New Documents Available

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    For the past few weeks, Mayor Cunningham has issued a FYI on the WARD citizen initiative during the weekly Commission meetings. Each week, he shared information related to water and housing to help the public better understand these complex topics.

    Interested in hearing these FYIs? You can tune in every Tuesday around 6 p.m. from now until Election Day to listen live. You can also view the past segments on our website or read through them in the documents section of our website.

    We also have a brochure and fast facts that we have been passing out at events. Feel free to review these to learn more as well.

  • Affordable Housing Resource

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    Affordable housing is hard to build. And now you can see just how challenging it is by visiting this website and adjusting some of the levers: https://apps.urban.org/features/cost-of-affordable-housing/.

    This website reviews the major buckets adding to the cost of housing, including land, materials, labor, and lending. It also explains how important outside subsidy is - you can see how tax credits, which are limited and not given to every project, are incredibly impactful in making a building with affordable housing pencil out. This data is from Denver and has not been modeled for Bozeman, but we deal with similar funding challenges.

    This resource is a project of the Urban Institute, a nonprofit, nonpartisan research organization. Its goal in this effort is to provide fact-based analysis about public and assisted housing.

Page last updated: 02 Oct 2025, 09:59 AM