At SterlingCRE Advisors, we keep a close eye on the planning decisions shaping Missoula, especially those that impact how people use, develop, and value real estate. Right now, the City of Missoula is in the midst of a major zoning code rewrite that every property owner should be watching closely.
This update is part of the Missoula 2045 Plan, which outlines how the city expects to grow over the coming decades. The overarching goal? To create a zoning code that’s simpler, more transparent, and better aligned with how Missoula is actually developing today—not how it looked decades ago.
What’s Changing?
The revised code reorganizes land uses into updated zoning “districts” that more accurately reflect current development patterns. While that may sound technical, it carries real implications for property owners. Key changes include:
Simplified Zoning Framework
The City is consolidating 38 zoning districts into 22, eliminating many confusing overlays. Fewer, clearer districts mean a more straightforward development process.
More Housing Options and Density
Under the new code, 89% of residential and mixed-use districts will permit apartments, with greater flexibility for duplexes, triplexes, and fourplexes, aiming to support Missoula’s growing housing needs.
Updated Parking Requirements
Recent changes in state law have reduced parking mandates, giving developers more freedom in how they design projects. Parking will still be a market consideration, but not one dictated as heavily by code. In general, parking requirements will be reduced throughout the city.
Build-to-Zone Requirements
For those looking to build or with vacant land, there are new build-to-zone requirements. Build-to zone requirements affect property owners by limiting where buildings can be placed, requiring them to sit close to the street and cover a set portion of the frontage. This reduces layout flexibility but encourages walkable, visually appealing streets that can enhance property value and business visibility. These new requirements make developing in Urban Mixed-Use districts potentially more challenging than under prior C or B zoning.
Major Shift For Commercial: What’s Happening to M1R2 Properties?
One of the most significant impacts of this zoning overhaul is the transformation of some areas previously zoned M1R2. This was an exceptionally flexible zoning designation—allowing for everything from industrial activity to multifamily residential on a site.
Under the new code, that flexibility is being curtailed for many properties..
M1R2 properties are now being rezoned into more narrowly defined categories, including:
- Limited Industrial – excludes residential uses.
- Limited Urban Mixed Use – excludes warehouse uses.
- Industrial Mixed Use – this is most similar to M1-R2 and includes industrial, residential and commercial uses.
Properties shifting to Limited Industrial or Limited Urban Mixed-Use limit the ability to combine industrial, commercial, and residential uses on one property—one of the key advantages of the former M1R2 designation.
Why This Matters
If you currently own or manage property under M1R2 zoning, the new regulations may narrow your permitted uses, shifting your parcel toward either a strictly industrial or more commercially focused future. In many cases, residential development rights will be lost under the new zoning.
What Property Owners Should Do
Now is the time to:
- Review the new zoning map to understand how your property may be reclassified- leave comments to suggest changes and/or attend meetings to address your concerns
- Assess how the changes impact your development or leasing strategy
- Plan accordingly, especially if residential development was part of your long-term vision
- Reach out to SterlingCRE Advisors for an evaluation of what the new zoning may mean for your property
This is the most consequential zoning change Missoula has seen in years. To make sure you aren’t losing value through this zoning change, a proactive review of the new code is critical.
Winners and Losers: Understanding the Impacts
As with any zoning update, some properties will benefit, others may face new constraints.
- If your property is upzoned, you may gain more development options, such as the ability to build additional units or increase site intensity, potentially boosting property value.
- If your property is downzoned, your development potential may be reduced. Often less development potential means less value. However, in most cases, existing uses will be “grandfathered in” as legal nonconforming uses, meaning they can continue even if they’re no longer permitted under the new zoning.
These protections typically remain in place unless the use changes, the property is redeveloped, or it sits vacant for an extended period.
Understanding Legal Nonconforming Uses in Missoula
If a structure or use was legally established before the new zoning took effect, it may qualify as a legal nonconforming use. That means the use can continue, but with some key caveats:
- The burden is on the property owner to prove lawful status.
- Nonconforming rights run with the land, not the owner, so properties can be sold without losing their status.
- Maintenance and improvements are allowed, including major repairs, as long as the use or footprint is not expanded.
- A lapse in use or a change in activity could trigger the loss of nonconforming status, something to monitor closely.
While these uses are still legally viable, they can raise concerns for prospective buyers and may impact valuation due to perceived risk or uncertainty.
Why You Should Take a Look
The City is currently accepting public comments and has created several tools to help property owners navigate the changes. You can:
- View proposed zoning maps
- Compare your current zoning to what’s planned
- Share feedback with the City
If you own—or are considering buying—property in Missoula, now is the time to understand how the new code could affect your plans. SterlingCRE Advisors is happy to help you better understand these changes.
Our Take
Zoning may not be flashy, but it plays a powerful role in shaping Missoula’s neighborhoods, housing stock, and business corridors. Whether your property gains flexibility or faces new limitations, it’s essential to understand what’s changing before the new code is finalized.
At SterlingCRE Advisors, we’re here to help. Whether you’re evaluating a property for acquisition or navigating how the new zoning affects your current portfolio, our team can help you make informed decisions. We are happy to prepare a no-obligation evaluation of what these changes may mean for your property.
Let’s talk.
