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Why The Lack of Affordable Housing in Bozeman Has Nothing to do With Bozeman Main Photo

Why The Lack of Affordable Housing in Bozeman Has Nothing to do With Bozeman

Posted: September 30, 2021 by Mark L. Corner

So many people like to point the finger at greedy landlords raising rents in Bozeman for the lack of affordable housing.  It actually has nothing to do with Bozeman but national trends that are happening to most every city across America.

1. We have a national housing supply shortage.
    A. People are staying in their homes longer.  10 - 12 year compared to 7 years.
    B. When people buy a new home, instead of selling their old home, they are keeping it as a
        rental or a short term vacation rental.
    C. Builders can not keep up with the new house demand due to the cost and difficulty to
        develop new subdivisions and lack of skilled labor.
    D. Bozeman estimated we need 6,500 new homes to meet demand yet we are only building
        about 1,200 new units a year.

2. The dramatic rise in the cost of building material makes new homes more expensive 
    so rents 
have to be higher for those new homes and it raises the purchase price of 
    older homes.

    A. Every national disaster like hurricanes and major forest fires put high demand on building     
        materials for people to repair or replace their homes.
    B. Environmental restrictions have sharply reduced timber harvest in American forcing us to 
        import lumber from foreign countries.
    C. National trade policies have sharply increased the cost of cheaper imported materials like
        steel and lumber as well as appliances for homes.

3. Our economy is flourishing. 
    A. As more and more people enter the workforce, they also need housing.

4. Record low home mortgage rates.
    A. As home mortgage rates have reached an all time low over the last 40 years it has spurred
        lots of additional home buyer demand.
    B. Any time supply remains low and demand surges - prices rise.

5. COVID enhanced the ability for more and more people to work remotely and they no
    longer need to live on the congested coasts of the U.S. and have been moving to   
    smaller cities like Bozeman.

Bozeman can pass all the affordable housing initiatives they want but it won't have much effect on the larger national trends that are affecting affordable housing all across America.

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