The Montana Housing Miracle

The Montana Housing Miracle — The original term “Montana Miracle” refers to a series of housing reform laws passed here in Montana, primarily in 2023, aimed at addressing the state’s housing crisis by increasing supply and affordability.

These reforms, driven by bipartisan efforts and championed by Governor Greg Gianforte, tackled restrictive zoning and regulatory barriers that had constrained housing development, particularly during a population influx spurred by the COVID-19 pandemic.

Below is a detailed overview based on available information:

Background of the Housing Crisis

Pandemic-Driven Migration:

Montana saw significant in-migration during the pandemic as people sought rural, spacious areas. This led to soaring demand, with home prices nearly doubling from $266,473 in 2018 to $505,419 by 2023, while median household income rose only 28% to about $60,000.

Supply Constraints:

Strict zoning laws, such as single-family-only zoning and bans on duplexes or accessory dwelling units (ADUs), limited housing supply. In cities like Missoula, vacancy rates dropped below 1%, and regulations added up to 40% to the cost of new units.

Impact:

Teachers, nurses, and other essential workers struggled to afford housing, threatening community stability. Renters faced steep increases, with some areas seeing 37% rent hikes in two years.

Key Reforms of the Montana Miracle (2023)

In 2023, Montana’s legislature passed a package of bills, informed by a bipartisan Housing Task Force established by Gianforte in 2022, to deregulate housing development and boost supply.

Key Bills Included

Senate Bill 323: Legalized duplexes in single-family zones in larger municipalities, enabling more affordable “starter homes” for young families or retirees.

Senate Bill 528: Allowed ADUs (e.g., granny flats or garage apartments) statewide, increasing density without sprawling development.

Senate Bill 245: Permitted multifamily and mixed-use housing in commercial zones, maximizing land use in urban areas.

Senate Bill 382 (Land Use Planning Act): Overhauled zoning processes, requiring cities to plan for growth, adopt affordable housing strategies, and streamline permitting.

Other Measures:

Streamlined subdivision reviews (House Bill 211, Senate Bill 170), eliminated discretionary design reviews (Senate Bill 407), and invested $175 million in workforce housing and $105 million in infrastructure.

These reforms aimed to reduce regulatory barriers, encourage denser housing in cities, and preserve Montana’s rural character by avoiding sprawl. They gained broad support from a coalition of developers, environmentalists, and activists, framed as an “anti-California” approach to prevent restrictive zoning like that seen in high-cost coastal states.

Further Reforms in 2025

In 2025, Montana’s legislature continued its pro-housing agenda, passing additional bills to build on the 2023 reforms.

House Bill 492: Eliminated parking mandates for most new housing in larger cities (e.g., homes under 1,200 sq ft, affordable housing), potentially boosting construction by 40–70%.

Senate Bill 243: Allowed six-story apartment buildings in commercial and industrial zones, overriding local height restrictions.

Other Measures:

Limited developer impact fees, reduced condo defect liability, professionalized historic reviews, and legalized single-stair buildings up to six stories and rural ADUs.

These reforms, also bipartisan, focused on cutting costs and increasing flexibility for developers while maintaining community input.

Impact and Early Results

Positive Signs:

In Missoula, apartment vacancy rates rose from 1% to 6%, and rental rates dropped 20% within a year of the 2023 reforms. Bozeman saw similar trends.

Development Activity:

Cities like Whitefish and Bozeman began rewriting zoning codes, and Missoula approved housing for 162 families under new laws.

Long-Term Uncertainty:

Experts caution that affordability remains a challenge. While supply is increasing, it may take years to close the gap, with some doubting whether new housing will be affordable for low- and middle-income residents.

Challenges and Opposition

Legal Challenges:

In late 2023, Montanans Against Irresponsible Densification (MAID) sued to block the 2023 reforms, arguing they violated equal protection by allowing ADUs and duplexes only in areas without restrictive private covenants.

A preliminary injunction was granted in January 2024, halting implementation, but a March 2025 ruling upheld the reforms, allowing them to proceed.

Local Resistance:

Some homeowners feared denser housing would disrupt single-family neighborhoods, citing concerns about property values and community character.

Affordability Concerns:

Critics argue the reforms focus on supply but don’t directly address affordability, leaving some residents, like those in Bozeman paying half their income in rent, feeling no immediate relief.

Why It’s Called a “Miracle”

The term “Montana Miracle,” coined by journalist Kriston Capps, reflects the rarity of a conservative, Republican-led state passing progressive housing reforms, leapfrogging efforts in some liberal states.

The bipartisan coalition spanning developers, environmentalists, and libertarians overcame political divides, and the reforms’ comprehensive scope set a model for other states.

Critical Perspective

While the reforms are ambitious, the “miracle” label may be premature. Montana’s housing crisis stems from decades of under-building and recent migration pressures, and new supply alone may not ensure affordability for essential workers or low-income residents.

The focus on deregulation assumes market forces will lower prices, but without targeted subsidies or rent controls, some fear gentrification or luxury developments could dominate.

Additionally, legal and local push-back highlights ongoing tensions between growth and preservation. Checking back in five years, as suggested by experts, will reveal whether the reforms truly enable teachers, firefighters, and nurses to afford homes.

Montana’s Housing Miracle represents a bold, bipartisan effort to tackle a housing crisis through deregulation and increased supply.

The 2023 and 2025 reforms have begun to ease vacancy rates and rental costs in some cities, but affordability challenges persist, and the full impact will unfold over years.

The state’s model—leveraging a diverse coalition and task force offers lessons for others, though success hinges on sustained implementation and addressing affordability directly.