Oct. 30, 2023
An acute affordable housing shortage has reached all 50 states, according to a recent Up for Growth report on housing underproduction. Montana, among the nation's fastest growing states, is no exception.
A pandemic-influenced migration into rural parts of Montana, spiking home prices, and a substantial drop in homebuilding created a severe housing supply problem for Republican Governor Greg Gianforte when he took office in 2021.
Gianforte, a serial entrepreneur who sold a software company to Oracle for $1.5B in 2011, made affordable housing the centerpiece of his agenda. His efforts resulted in a series of sweeping reforms that included signing the pro-housing Montana Land Use Planning Act, overriding local zoning ordinances and enacting laws that will usher in more multifamily homes and accessory dwelling units.
"Now, ADUs are legal everywhere in Montana," said Gianforte in a recent interview with Angela Brooks, FAICP, the president of the American Planning Association (APA), which was a digital sponsor of the housing underproduction report. "So, now a family that's on a fixed income living in a single-family home can rent out an apartment over the garage or in a basement. A nurse or a teacher can move in there and it's a starter apartment for them. It helps people on a fixed income make ends meet and it creates more dwelling units.
"We also changed the zoning law in Montana," he added. "Anywhere a single-family home is permissible, now a duplex is permissible."
Proposals put forward by a broad, bipartisan housing task force of state and city officials, planners, home builders, and nonprofit organizations were put into bills that received strong support in the Montana State Legislature. Taken together, observers dubbed it the "Montana Miracle" as this conservative, Republican-controlled state enacted progressive new housing laws, leaping ahead of some Blue states attempting to address the housing shortage.
Brooks caught up with the governor in October at the Annual Summit for Housing Changemakers in Washington, D.C., to discuss Montana's successful efforts to create more housing and to learn how planners can partner with state and local officials to find and advance viable solutions to the nation's housing crisis. The following interview has been edited for length and clarity.
BROOKS: You and your state have rightly gained national recognition for the "Montana Miracle" — a package of housing, zoning reform, and land-use bills. Before we talk about what you did legislatively, I'd like to know how and why you decided to prioritize housing and zoning reform.
GIANFORTE: Montana is a big state, and through this pandemic period, many people have chosen to move here. The inflow has greatly exceeded our housing supply and the affordability of housing has declined. As I traveled throughout the state, county commissioners, sheriffs, business owners, and residents said the number one issue for working families is affordability of housing.
We have markets in Montana where vacancy rates are less than one percent. As a consequence, there are few places for teachers, police officers, and nurses to live, and it's really gutting the core of our communities. We knew that if we didn't get our arms around affordable housing, we wouldn't have communities. What we recognized in the process was that government regulations were 40 percent of the cost of every new unit. Recognizing there was more demand than supply, we needed to increase supply.
As I traveled throughout the state, county commissioners, sheriffs, business owners, and residents said the number-one issue for working families is affordability of housing.
— Governor Gianforte
BROOKS: The release of the report, 2023 Housing Underproduction in the U.S., shows that the nation's housing crisis is actually getting worse, faster in the nation's smaller towns and regions. You've been seeing this in Montana for some time and certainly saw it accelerate during and after the pandemic. What's the current state of housing in Montana?
GIANFORTE: So again, it's a problem of massive demand, not enough supply, and regulations and zoning that have gotten in the way. I'll give you an example: a Missoula builder was trying to put up a small apartment building. Finding a lot where he could do multifamily was nearly impossible because the entire town was zoned single-family. It took him an extra seven months to get his permits, which added $70,000 to the cost of every unit he was going to sell.
On the other side, we have very rural communities that haven't grown in a long time. In fact, they've been contracting. A lot of these rural communities haven't built a new home in 40 years so constructing them now is really difficult because there are no general contractors, there are no carpenters, there are no plumbers.
BROOKS: Tell us about the task force which you recently decided to reconvene. Why do you think it was successful?
GIANFORTE: To prepare for this year's biennial legislative session, I issued an executive order in July 2022 that formed a bipartisan housing task force. The chair was the head of our department of environmental quality, and the task force had broad participation from state officials, home builders, city planners, county commissioners, and nonprofit leaders. I said to them: Listen, I want you to cast a really broad net and bring me your best ideas. They came up with dozens of specific statutory changes we could make to expand the affordable housing supply, as well as regulatory relief we could execute without statutory changes.
BROOKS: How did key reforms come to pass?
GIANFORTE: I would say that because we had bipartisan participation, we got bipartisan support. First, we enacted the Montana Land Use Planning Act, which allowed communities to do master planning. That way, once a community agrees on how they're going to grow, if a builder comes in with a subdivision application, if it matches the master plan, and we've already had all the public hearings, they just get their permit. So, it really cuts red tape.
The second thing we observed was that all the infrastructure programs we had for water and sewer were designed for urban renewal, which was a problem for us because we were building new subdivisions. So, we got the Homes Act passed into law, which has over $100 million in a revolving loan fund for municipalities for water and sewers.
BROOKS: I can't imagine municipalities were jumping for joy at the prospect of the legislature getting involved in local land use. How did that go?
GIANFORTE: This was a delicate issue with cities and towns, but we knew their local zoning was inhibiting infill. So, now a family that's on a fixed income living in a single-family home can rent out an apartment over the garage or in a basement. A nurse or a teacher can move in there and it's a starter apartment for them. It helps people on a fixed income make ends meet and it creates more dwelling units.
We also changed the zoning law in Montana. Anywhere a single-family home is permissible, now a duplex is permissible. We overrode local zoning and got some pushback, but eventually key stakeholders supported us on it. So, we showed them the light. We also moved local design review from volunteer boards to employees — the professional planners that are on staff — so we have a little less of the NIMBY and a little more YIMBY for building.
"We also moved local design review from volunteer boards to employees — the professional planners that are on staff — so we have a little less of the NIMBY and a little more YIMBY for building."
— Governor Gianforte
BROOKS: As other states and communities across the country look for their own solutions and policies, what lessons should they take away from your experience in leading reform in Montana?
GIANFORTE: Well, the first thing is: you have to build consensus. That's why we put such a broad committee together. We had Democrats, Republicans, Independents, nonprofits, for-profit companies, state officials — everybody was involved and we gave them a clear charge.
I didn't put a lot of constraints on it. What we have to do is look at free market solutions that encourage the private sector to bring capacity to the table and help the government get out of the way. I told the task force, don't give me motherhood and apple pie. I want specific recommendations that we can act on in this next legislative session. And they did that, and then we put our weight behind the plow and got the stuff enacted into law.
BROOKS: I'm sure Montana communities are varied — from more urban places to those that are quite rural — and that no one approach is going to work for every place.
GIANFORTE: It's a good point, because even within Montana, the problem is different. In a small town like Denton or Malta — where they haven't built a new home in 40 years — there are few general contractors. How do you solve that problem? Well, we just recruited modular home manufacturer Dvele to Montana and they're investing $80 million in a 360,000-square-foot manufacturing plant in Butte. They're going to create 450 jobs. In those smaller communities, you may not be able to find a carpenter to frame up a house, but you can find somebody who will pour a slab and put the basic plumbing in, and then you can truck a manufactured home in. That might be the way we get started in these rural communities.
BROOKS: A lot of the work that you've done is revolutionary. Where do you go from here and how do you see that not only really moving the needle on housing supply, but really changing the landscape of your state?
GIANFORTE: Anybody that's worked with me knows my methodology is very simple. To use a football analogy, we ran a lot of three-yard and five-yard plays instead of throwing Hail Mary passes. We moved the chains, we put some points on the board, but we're not done. I've reconvened my diverse, bipartisan housing task force and asked them to bring us the next set of ideas. We haven't by any means solved this problem in Montana. We still have people sleeping in RVs on the streets. They should be in homes. And it's the commitment of our administration to make that happen.