Bill to deregulate accessory dwellings dies in Montana Senate

Despite bipartisan support, a bill that would prohibit cities and counties from limiting construction of accessory dwelling units appears unlikely to advance after its first hearing before a Montana legislative committee.

Senate Bill 397 was introduced by Sens. Greg Hertz, R-Polson, and Ellie Boldman, D-Missoula, who said it would eliminate onerous zoning rules and allow more Montana homeowners to build accessory dwellings — small cottages or apartments that share properties with larger single-family homes — and thus create more affordable housing in the state's burgeoning urban centers.

Opponents said the bill attempts to strip cities and counties of local control and apply a one-size-fits-all solution to the complex problem of housing affordability. Some raised concerns that accessory dwelling units, or ADUs, too often are used as short-term rentals such as Airbnbs.

After a hearing March 29, the Senate Local Government Committee voted 6-5 to table the bill, and a last-ditch motion by Hertz to debate the legislation on the Senate floor failed on a vote of 29-21.

"It died a slow death in committee," Hertz said in a phone call Thursday.

DURING THE hearing, Hertz said accessory dwellings are "an excellent means of addressing the shortage of housing," but some cities in Montana have placed too many restrictions on where and how they can be built, such as 600-square-foot size limitations and mandatory off-street parking.

"The residents of an ADU are paying only for the housing they need, not that surplus space otherwise underutilized," he said. "Dwellings can be built incrementally, on a small scale, instead of the high-risk complications that come with apartment complexes that some developers are adverse to. The demand for smaller housing exists, and the disconnect between housing supply and the demand is due in part to cities' indirect discouragement of diverse and flexible housing options."

Sam Sill, a lobbyist for the Montana Association of Realtors, agreed. "In our view, ADUs make homeownership more affordable because the owner gets another revenue stream through the rental income," he said. "It can help them afford a mortgage."

The bill also had support from Rep. Danny Tenenbaum, D-Missoula, who wrote on Twitter last week, "Montana's housing crisis gets worse every month. Outdated ordinances rooted in false concerns about 'neighborhood character' should not be allowed to block smaller and less expensive housing options."

REPRESENTATIVES OF several cities testified against the bill. Billings Planning Director Wyeth Friday said his city recently spent more than three years updating its zoning code and paid special attention to the topic of accessory dwellings.

"It was a process filled with debate and disagreement to hammer out what our community was comfortable with to allow ADUs. We heard from stakeholders across the community — homebuilders to neighborhood task forces, architects to Realtors," he told the committee. "Our community had to mitigate impacts like absentee landlords, parking concerns, and how ADUs fit into existing neighborhoods to ensure they would work well here in Billings."

Accessory dwellings are now allowed unconditionally in almost every residential neighborhood in Billings, Friday said. In just one neighborhood, those projects must undergo a special review process. The city requires each accessory dwelling be built with additional parking and an architectural style matching the primary structure on the property. The owner also must occupy either the primary home or the accessory unit — a requirement aimed at preventing accessory dwellings from proliferating for use as short-term rentals.

Hertz's bill would prevent cities from requiring owners to reside at properties that have accessory dwellings.

"The damage this does to local communities' ability to coordinate development, mitigate neighborhood impacts and manage land-use regulations far outweighs any possible benefits," Friday said. "ADUs can be a great housing choice in our communities, but let's leave it to the local residents and elected officials to allow them and regulate them across Montana."

SK ROSSI, a lobbyist representing the city of Bozeman, noted the bill contains no provisions requiring accessory dwellings to be affordable, nor does it place limitations on their size. Rossi jokingly called it an "Airbnb stimulus bill."

"Local governments are doing things at the pace at which they think is best for their cities," Rossi said. "In a lot of cases, you're probably going to find local governments who are trying to more effectively zone for less-restricted ADUs, but they're doing it at a pace that is not going to strain their services, is not going to strain their infrastructure, will address the parking issues, will address all these other things that come along with increased density. And local governments need to be able to do that."

Whitefish and Kalispell have some restrictions on accessory dwellings, but leaders in both cities recently have considered whether to expand the zones where they are permissible. Whitefish City Council member Ben Davis, who chairs the city's Strategic Housing Plan Steering Committee, voiced opposition to Hertz's bill in an email to the Daily Inter Lake last week.

"There are collateral impacts that are not being considered," Davis wrote, "such as impacts on existing neighborhoods and the fact that many of these are built for use as second homes, which does not actually help the local housing issue here in Whitefish, and may in fact exacerbate difficulties for local residents in purchasing single-family homes."