Judge blocks two pro-construction housing laws

Court order keeps two of four laws challenged by Bozeman homeowners group from taking effect Jan. 1.

By Eric Dietrich MONTANA FREE PRESS

A Gallatin County District Court judge has blocked two laws passed by the 2023 Montana Legislature that aimed to promote housing affordability by forcing cities to permit denser development in existing neighborhoods.

The Dec. 29 order, by Judge Mike Salvagni, prevented the two laws from taking effect as scheduled on Jan. 1 while litigation of a legal challenge filed by a Bozeman-based homeowners group last month proceeds. The order doesn’t change the status of two other laws that are also challenged by the same lawsuit, including one that broadly reworks the state’s land use planning statute in an effort to focus resident input on high-level planning discussions and make it harder for not-in-my-backyard-style opposition to derail projects that comply with existing growth plans.

The two blocked laws are Senate Bill 323, which would require cities with 5,000 residents or more to allow duplex housing on any home lot, and Senate Bill 528, which would require cities to adopt regulations allowing more construction of accessory dwelling units, or secondary housing structures that share parcels with larger homes.

Left in effect for the time being is the new Montana Land Use Planning Act, the broader land use planning framework that passed as Senate Bill 382, and Senate Bill 245, which requires cities of 7,000 residents or more to allow apartment-style housing in most areas zoned as commercial. All four laws passed last year’s Legislature with bipartisan support. SB 382 and SB 245 took effect when they were signed by Gov. Greg Gianforte in May 2023. 

In his order, Salvagni wrote that the Legislature had not effectively coordinated the different bills, resulting in contradictions in the resulting laws. 

Salvagni noted, for example, that the Land Use Planning Act lays out a menu of possible housing strategies for towns and cities to pick from that includes changing zoning rules so duplexes can be built on lots previously reserved for single-family homes — even while SB 323 independently mandates that change. Furthermore, he added, the two bills define “duplex” in slightly different ways.

The judge also signaled agreement with the plaintiff’s argument that the new laws unfairly funnel new development into neighborhoods that aren’t subject to density-limiting homeowners association covenants.

“It appears that the disparity in treatment between those protected by restrictive covenants and those not so protected, and the chaotic, uncoordinated, and arbitrary applicability requirements in these various new laws are so arbitrary and capricious and so unrelated to a legitimate governmental purpose that they likely constitute a denial of Plainitff’s rights to Due Process of Law,” the judge wrote. 

The ruling, a preliminary injunction, represents an initial judicial decision that determines what version of the law will be in effect while the full case is litigated. It indicates that the judge believes the plaintiffs have a decent chance of winning their case, but it does not represent a final decision.

The preliminary injunction could be appealed to the Montana Supreme Court. The office of Attorney General Austin Knudsen, which is representing the state in the case, said Tuesday that it is “reviewing the order to determine next steps.”

The homeowners group, Montanans Against Irresponsible Densification, or MAID, describes itself as a group composed of members who live in neighborhoods “characterized by single-family homes, attractive well-maintained yards, and quiet streets.” In legal filings, the group argues that the pro-construction laws will threaten its members’ quality of life and won’t make a significant difference for Montanans who are struggling to find affordable housing.

MAID named only one member, Bozeman resident Glenn Monahan, in its initial Dec. 15 filing, but listed in a subsequent Dec. 19 filing a total of 21 members with addresses in Bozeman, Great Falls, Billings, Kalispell, Missoula, Columbia Falls and Whitefish. The additional members are Kristen and Richard Charron, Jinny and Brad Stratton, Daniel Carty, Kenneth Silvestri, Nancy Schultz, Jane Jelinski, Robert James, Karen and Gene Jarussi, Steve Berglund, Jennifer Young, John Carter, Patrick Malone, Susan and Michael Mayer, Anne Couser, Steve Barrett and Noah Poritz.

The group is represented by prominent Bozeman attorney Jim Goetz.

The lawsuit and subsequent injunction order has drawn criticism from Republican lawmakers and members of Gov. Greg Gianforte’s housing task force, which built support for legislation intended to ease Montana’s housing crisis by promoting the development of new homes. The state has seen typical home prices increase by 60% over the last four years, driving up rents and boxing out many aspiring homeowners.

“We took a very methodical approach to addressing Montana’s housing needs, passing bills to have both an immediate impact in the short term and also rewriting Montana’s land use laws for long-term reform,” Sen. Forrest Mandeville, who sponsored the Land Use Planning Act, said in a written statement. “It’s sad to see the courts are making Montana’s housing crisis even worse  after unprecedented, bipartisan success on housing policy at the Legislature.”

Kelly Lynch, executive director of the Montana League of Cities and Towns, drew a distinction in an interview between the Land Use Planning Act, which she said her organization had been working to develop for years, and the other three bills, which city governments had generally opposed as legislative mandates that they regarded as preempting local control.

“These are really, really complicated issues — and that’s why they are best dealt with, in detail, through the community process and through local elected officials,” she said.

Lynch noted that some Montana municipalities have already adopted local ordinances intended to comply with the new laws. Others, such as Bozeman, are considering such measures.

While the Land Use Planning Act wasn’t enjoined by his order, Salvagni did endorse MAID’s criticisms of it, signaling that the law could be vulnerable to a later ruling.

The homeowners group has taken specific issue with provisions of the Land Use Planning Act intended to focus public land use debates on the policy-level conversations that produce growth plans while scaling back the number of project-specific public hearings.

Lynch has argued that shift will make public planning more efficient and help developers know what they’ll be allowed to build before they spend money buying land.

“Once you make zoning decisions for particular sites based on what the community wanted to happen there, if the developer comes in with a proposal that fits that, why are we making them go through the wringer again?” she said Tuesday.

Salvagni, though, agreed with MAID’s argument to the contrary:

“Plaintiff has established,” he wrote, “that one of the main intents behind the new measure was to cut back on public participation at the project-specific stage — i.e., the stage at which new developments most imminently threaten Montana’s [sic] living in single-family neighborhoods.”