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Missoula Zoning Reform Sparks Development Concerns

  //house-home.news-articles.net/content/2026/02/0 .. a-zoning-reform-sparks-development-concerns.html
  Published in House and Home on Sunday, February 8th 2026 at 9:39 GMT by montanarightnow
      Locale: Montana, UNITED STATES

By Colby Meck, Montana Right Now

Missoula, Montana, is on the cusp of a potentially transformative shift in its urban development landscape. A comprehensive zoning reform, currently under consideration by the City Council, aims to address the city's chronic housing shortage and increase affordability. However, the proposed changes are proving to be deeply divisive, pitting city planners and housing advocates against seasoned developers who fear the new rules could inadvertently stifle the very projects they are intended to encourage.

The heart of the debate lies within a 355-page document outlining significant alterations to existing zoning regulations. Proponents argue the changes will unlock density, promoting a greater supply of housing and, theoretically, easing affordability pressures. The plan seeks to streamline permitting processes and encourage more compact development. However, the specifics regarding density bonuses and impact fees are causing significant consternation within the development community.

For years, Missoula developers have leveraged density bonuses - allowances to build beyond standard zoning limits - in exchange for incorporating affordable housing units into their projects. These bonuses, coupled with reductions in impact fees (charges levied to cover infrastructure costs associated with new construction), have been crucial in making financially challenging affordable housing developments viable. The proposed reforms threaten to substantially curtail these incentives.

"It's deeply concerning," states Derek Schaefer, a Missoula developer with a two-decade track record of building affordable housing. "The proposed changes aren't grounded in the realities of development finance. They seem to be designed without a full understanding of how these incentives function." Schaefer argues that reducing these benefits will inevitably increase project costs and extend timelines, potentially rendering some projects unfeasible.

Kim Hansen, of Peak Development, echoes these concerns. "We've relied on those density bonuses and impact fee reductions to bridge the financial gap and make these projects pencil out," she explains. "Without them, the economics become far more challenging, especially in the current economic climate." Hansen stresses that developers aren't opposed to growth or contributing to infrastructure improvements, but rather fear the changes will create an insurmountable obstacle to providing much-needed affordable housing.

The potential ramifications extend beyond individual projects. Developers warn that a diminished incentive structure could discourage investment in affordable housing altogether, leading to a contraction in the supply of units at a time when demand is already far outpacing availability. This could exacerbate the existing housing crisis, pushing prices even higher and further marginalizing vulnerable populations. Some analysts suggest that the changes could also inadvertently shift development towards more lucrative, market-rate projects, leaving affordable housing even further behind.

Supporters of the zoning reforms maintain that the changes are a necessary step to address Missoula's housing crisis. They contend that the modifications will incentivize all development, believing that an increased overall housing supply, even if primarily market-rate, will eventually trickle down and alleviate pressure on lower-income housing options. They also argue that impact fees, while potentially increasing upfront costs, are a fair way for developers to contribute to the city's infrastructure needs.

The debate isn't solely confined to developers and city planners. The Missoula City Council has held several public hearings, attracting a diverse range of voices. Residents have voiced both support and opposition, reflecting the complex interplay of economic concerns, neighborhood character preservation, and the desire for a more equitable housing market. Developers and affordable housing advocates have been actively engaging with council members, attempting to highlight the potential unintended consequences of the proposed changes and advocate for a more balanced approach.

Looking ahead, the Missoula City Council is poised to vote on the zoning changes in the coming weeks. The decision will undoubtedly have a far-reaching impact on the city's future. The outcome will not only shape the physical landscape of Missoula but also determine the accessibility of affordable housing for its residents. The question remains: will these reforms unlock a new era of housing opportunity, or will they inadvertently exacerbate an already critical situation? The answer hangs in the balance, and the coming vote will be a pivotal moment for Missoula's future.