Montana Supreme Court Lifts Hold on Pro-Housing Laws

The Montana Supreme Court has lifted a lower court's injunction on two key pro-housing construction laws, allowing them to proceed as a legal challenge from homeowners continues. These laws, passed by the 2023 Montana Legislature, are designed to alleviate the state's ongoing housing crisis by loosening local zoning regulations and promoting higher-density housing options.

The two laws at the center of the ruling, Senate Bill 323 and Senate Bill 528, focus on increasing the supply of housing by changing how cities regulate residential developments. Senate Bill 323 mandates that cities with populations of 5,000 or more must allow duplexes on any residential lot, aiming to promote more flexible land use and increase the availability of affordable housing. Senate Bill 528 compels cities to permit the construction of accessory dwelling units (ADUs), often referred to as "granny flats" or "carriage houses," which can be built alongside existing homes.

These reforms are part of a larger legislative effort to address Montana's escalating housing crisis, where home prices have risen dramatically in recent years. According to Zillow, the median home price in the state reached $470,000 by July 2024, a staggering 64% increase since 2020. The lack of affordable housing has made it difficult for many residents—especially young families, working-class Montanans, and retirees—to find suitable homes.

The plaintiffs in the case, Montanans Against Irresponsible Densification (MAID), have opposed these laws, arguing that they impose top-down zoning changes that undermine local control and reduce the quality of life in residential neighborhoods. MAID contends that the laws could lead to overdevelopment in areas that lack the infrastructure to support additional housing units, thus straining community resources like schools, roads, and utilities. They further argue that the changes would do little to make housing genuinely affordable.

However, the Montana Supreme Court unanimously disagreed with MAID’s argument, stating that their fears were speculative and not based on concrete evidence. Justice Beth Baker, writing for the court, emphasized that the bills were passed following an extensive and transparent process led by Gov. Greg Gianforte’s housing task force, which recommended zoning changes as a crucial step in addressing the housing crisis. Baker further pointed out that the intent of the laws is to promote the public welfare by addressing a growing housing shortage across Montana.

The broader context of this case highlights a tension between state-level efforts to spur development and local concerns about maintaining community character. While MAID sees the bills as harmful to local neighborhoods, proponents argue that without aggressive measures like those in SB 323 and SB 528, Montana’s housing crisis will only worsen. Housing advocates and lawmakers who support the legislation assert that Montana cannot rely on traditional, low-density housing models to meet current demand, particularly as the state's population continues to grow.

In addition to the two laws in question, MAID is also challenging Senate Bill 245 and Senate Bill 382 in the underlying case. Senate Bill 245 requires cities with 7,000 or more residents to permit apartment-style housing in commercial zones, while Senate Bill 382 establishes the Montana Land Use Planning Act, a new framework for land-use decisions. These bills also aim to ease housing shortages by encouraging higher-density residential developments in urban areas.

As litigation proceeds in Gallatin County District Court, these laws remain under scrutiny. The Montana Supreme Court’s ruling allows SB 323 and SB 528 to move forward for now, but the long-term outcome will depend on the final resolution of MAID’s legal challenge. Despite these hurdles, proponents of the laws, such as Senate President Jason Ellsworth, remain optimistic that the reforms will help ease Montana’s housing woes by creating more opportunities for affordable housing development.

The ConstructionOwners Perspective

From a broader perspective, this case is part of a growing national trend where states are stepping in to address housing shortages by overriding restrictive local zoning rules. Many cities across the U.S. have historically relied on single-family zoning, which limits the types of housing that can be built in certain areas, leading to a shortage of affordable homes and pushing up real estate prices. Laws like Montana's SB 323 and SB 528 are seen as part of a wave of reform aimed at increasing housing density, promoting urban infill, and making better use of existing land in urban areas.

However, the debate over densification reflects deeper issues of governance and community planning. On one hand, there’s a clear need for more affordable housing; on the other, residents often resist changes that they fear could lead to overcrowding, loss of neighborhood character, or strained local services. The resolution of this case will likely set a precedent not only for Montana but also for other states facing similar housing crises. It highlights the ongoing struggle to balance state-level housing goals with local autonomy and concerns over neighborhood preservation.