Much ADU about Accessory Dwelling Units in Montana

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Maggie Collister

Much ADU about Accessory Dwelling Units in Montana

Montana ADUs: Pros and Cons

ADUs in Montana have become more visible in the past decade. Accessory dwelling units are secondary units on a property with a larger, main house. They can be attached or detached, a true tiny house or something a little more spacious. You might also hear them referred to as a “mother-in-law suite.”

And in Montana, each city has different rules for ADUs. In Bozeman, for example, no more than two people may live in the unit. Zoning restrictions in Billings meant that only about 10% of homes were eligible for an ADU before a major overhaul of the city code.

Missoula city code caps ADUs at 600 square feet (but it has to be larger than 350 square feet). Great Falls municipal code prohibits the rental of an accessory living space altogether.

But in many major Montana cities, ADUs are being seen as a part of a solution to the rising housing crisis.

The Pros

Montana ADUs can benefit homeowners who rent out the units, helping to make up some housing costs. Sometimes, “MIL units” is literal, where aging parents or adult children live. As families merge living spaces during the current economic crisis, ADUs fill a key gap.

Advocates also note that smaller homes generally also have a decreased environmental impact. Often, ADU renters are also part of the group seeking workforce housing – a crucial group to house for sustained economic vitality.

Others with an ADU might rent it out for vacation rentals. Especially in bougie vacation destinations like Whitefish or Big Sky, ADU rentals can help make ends meet.

The Cons

Not everyone supports more ADUs, or ADUs used as rentals or tourist homes. Folks often bristle against higher density. ADUs can set off a flurry of negative public comment. There’s pushback for almost any infill – be it apartments, ADUs, or even senior or student housing. 

Some adjacent homeowners express concerns about renters behaving “in accordance with neighborhood standards.” Unruly tourist behavior and increased traffic is also cited as a reason to ban vacation rentals in ADUs.

Other worries include more people, bringing with them more noise and more trash. But with places like Bozeman and Kalispell ranking in the top ten fastest growing micropolitan areas in the US, those people are coming anyway.

Our Take on Montana ADUs

ADUs are just one way to meet growing demand – slowing or banning ADU development won’t stem the tide of new Montana residents.

An adequate supply of rental units is essential for the overall health of a city. Barring some lucky gift or generous family, almost everyone starts out as a renter. Stable, available housing for a population just getting on their feet and securing a job is crucial to fostering and retaining local talent. 

And while ADUs are getting green lights in municipal policies across the state, they aren’t a silver bullet to solve the housing crisis. Tiny home living isn’t for everyone. Small families need room to grow, to begin raising the next generation of Montanans.

Interested in learning more about multifamily housing in Montana? Contact Nick Chaussee or download Sterling CRE market reports here.

Matt Mellott
Matt Mellott, CCIM/SIOR

Much ADU about Accessory Dwelling Units in Montana