Water Adequacy for Residential Development

Over the past weeks, we’ve heard concerns from residents about the messaging around water in our community. People have been told for several years that we are running out, and understandably, they are now concerned that our messaging has changed to one that sounds like we have plenty of supply. Truthfully, we are glad to have this conversation in our community so we can share more information about the City’s water supply.

One of the major reasons that the messaging has shifted is a success story; we have better data and information to look at our water future and have done great work with our water conservation programs and water supply development.

In years past, the City projected future water supply and demand using the best information available at that time. This inherently required that the City make assumptions about growth rates, available water supplies, and demands. To be conservative and responsible in its planning, the City used a worst-case scenario projection that assumed: 4% continuous annual growth, no demand reductions from water conservation, no additional supply, and very significant impacts from climate change. While a valid approach, this projection was rudimentary, static in nature, and included highly conservative assumptions.

To improve our ability to manage our water supply in the face of growth, the City developed a water supply and optimization tool. This tool, which the City completed and began using in 2023, supports a more sophisticated and accurate water supply and demand projection. The tool evaluates the City’s legal and reliable water supply on a monthly basis alongside existing demands and projected demands associated with approved development projects. The tool puts a placeholder on water for new development as projects are approved and prior to being built. It evaluates future demands based on a land use approach, not an assumed population growth rate. This has resulted in a more accurate water management approach with fewer assumptions and still accounts for the impacts of climate change on our water supplies.

Another major factor shifting the conversation was that we all rolled up our sleeves and got to work: Bozeman residents have taken conservation messages seriously and have worked hard to reduce the demand on our water supply, leaving us in a much better place. Bozeman is still very much drought-prone. We live in a closed basin, meaning that our water supply does have a limit to it, and good environmental stewardship means that we’re using this important resource wisely and planning for current and future needs.

The City is constantly striving to make better decisions; to improve, grow, and make the best-informed decisions possible for our future. Thank you to everyone for the questions and concerns around our water supply. Bozeman residents are the most sustainable water users in the state, and it’s because we all care about this important resource. We appreciate you taking the time to learn more and understand.

View the one-pager.

One Valley Community Foundation’s Regional Housing Coalition presented a policy analysis on WARD. Their findings can be found in the documents section of this website. Their report discusses the drivers of the high cost of housing, the likely impacts on Gallatin County, including environmental concerns around developing on wells and septic, and policies/tools that can be pursued to help create more affordable housing.

Headwaters Community Housing Trust presented results from a poll of 424 registered voters in Bozeman. Their poll looked at a number of issues, from WARD to UDC to housing solutions. Their methodology and memo on the results can be found in the documents section as well.

Thanks for tuning in and staying up to date on all things WARD!

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.

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.

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!

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.

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!

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.