Judge pauses ‘affordable housing’ bills passed by Legislature

Darrell Ehrlick

(Daily Montanan) A Gallatin County District Court judge has temporarily stopped several bills passed by the 2023 Montana Legislature and signed into law by Gov. Greg Gianforte that aimed to address the affordable housing crisis in the Treasure State by allowing additional buildings in neighborhoods zoned for single-family.

Montanans Against Irresponsible Densification asked District Court Judge Michael Salvagni to issue a preliminary injunction against two bills that were scheduled to go into effect on Monday.

In his order and preliminary injunction, which stops the laws until the trial’s final outcome or the Montana Supreme Court rules differently, Salvagni criticized the Montana Attorney General’s Office for how it handled the issue, and agreed that the Legislature’s approach was “chaotic” and likely rushed, resulting in a mix of confusing and contradictory rules for cities and counties to follow. Furthermore, his ruling said that the lawmakers also appear to have cut the public out of the process completely, raising serious problems with the Montana Constitution.

For example, he pointed out that a property owner living in a single-family neighborhood might wake up to find his neighbor has built a duplex in the backyard, without any notice or input and virtually no recourse.

Meanwhile, the state argued two of the four laws have been in place since they were passed by the 2023 Legislature, and thus the need for an immediate injunction was not timely. Furthermore, attorneys for the state said that any damages done by the new laws were merely speculative and hypothetic, not real.

Salvagni rejected both arguments.

The Daily Montanan received the order late Friday afternoon, and was not able to reach anyone at the Montana Attorney General’s Office for comment.

However, attorney James Goetz of Bozeman called the ruling a “nice way to end to the year.”

Goetz said his clients, Montanans Against Irresponsible Densification, believe affordable housing is a problem in the state, but worry that the state is trampling on several constitutional rights in the process.

“I’m sure that most of the members agree that affordable housing is an issue in Montana, but nothing in these bills will address that,” Goetz said. “Instead, this is a gift to developers.”

He said that in some towns like Bozeman, where the median price for a home is upwards of $800,000, these bills allow developers to skirt some costs, like impact fees or providing parking, but there’s little to prove that it will lower the cost of housing. In other words, developers can build more, but there’s little to guarantee that will make it affordable.

“All of us know this is a problem, but these laws won’t make a dent,” Goetz told the Daily Montanan on Friday.

Salvagni enjoined – or temporarily stopped – Senate Bills 323 and 528 from being implemented. The other two laws were passed as part of a legislative quartet of bills included Senate Bill 382 and 245 which went into effect, but deal specifically with requiring cities and counties to modify their zoning laws, with deadlines that stretch several years, giving attorneys on both sides of this case time to argue their cases at trial before going into effect.

Equal protection

Attorneys for Montanans Against Irresponsible Densification, a residents group, said these laws crafted by state lawmakers were rushed and chaotic, and in their rush to find a solution, lawmakers actually broke several constitutional guarantees.

One of those is that “similarly situated” residents may be treated very differently. For example, in neighborhoods where there are restrictive covenants that ban multi-family housing or accessory dwelling units, those covenants will not and cannot be changed by law. But for neighborhoods, in many cases, residents living right across the street who don’t have covenants attached to their property would be subject to these new laws. Goetz pointed out that many newer subdivisions have covenants, while property owners in older, historic neighborhoods may be disproportionately impacted.

“The result of the new laws is that two different sets of people, one protected by restrictive covenants, the other not, results in an arbitrary application of Montana law which is unrelated to any legitimate governmental purpose,” Salvagni wrote in his order. “As a consequence, plaintiff is likely to succeed on the equal protection claim.”

Contradictions and confusion

The court also found that when viewed together, these raft of four bills – now signed into law – were confusing and contradictory.

“There appears to have been no coordination within the Montana Legislature on these various land use measures. As a consequence of its efforts to promote ‘densification,’ there are apparent contradictions and irreconcilable differences among these measures,” the court order said.

It lists several including:

The court order suggested that the 2023 Legislature may have attempted to write an entirely new portion of law without regard to current laws.

“The effort by the Montana Legislature to write an entirely new review and approval regime for zoning, subdivision, and annexation may have resulted in pervasive arbitrariness which runs afoul of both the Equal Protection and the Due Process clauses of the Montana Constitution,” the court order said.

The residents group also demonstrated that the numbers chosen by lawmakers were arbitrary and seemed to affect nearly identically-sized cities and counties differently.

For example, Hamilton and Polson both have populations of 5,000, but they are not in a county that has at least 70,000 people, while Columbia Falls, Whitefish and Laurel all have similar populations and are situated in counties with more than 70,000.

“There does not appear to be any reason in public policy or in the professed justification of addressing affordable housing that supports the entirely arbitrary distinctions between these similarly situated cities,” the order said. “Yet one set is obligated to comply with the burdensome strictures of SB 382, while the other set is not.”

Public participation

The court also found that the new laws could significantly jeopardize the Montana Constitution’s right to participate in the decision-making process, going so far as to cut out any public notice of building in single-family neighborhoods.

“With respect to the two measures scheduled to take effect on Jan. 1, 2024, SB 323 and SB 528, there is no public participation at all. At the hearing, the court questioned the state’s attorney about whether she agrees that SB 528 compels municipalities to permit accessory dwelling units immediately,” Salvagni wrote. “The state so conceded. However, in response to the question about where the public participation is allowed in that process, the response was equivocal and not persuasive and suggested that it was during the legislative process in the adoption of these new laws.”

State approach

In his order, Salvagni pointed out that lawyers with the Montana Attorney General’s Office had taken an unconventional approach to the group’s motion for a temporary injunction. Salvagni noted that the residents’ group had served the state with the motion for an injunction, but “the state did not respond to the plaintiff’s inquiry.”

Furthermore, at the conclusion of a hearing in Gallatin County on Thursday, attorneys for the state argued the court could issue a temporary restraining order for 10 days, and then hold another hearing.

“The state’s position confuses the statutory scheme governing issuance of a temporary restraining order, without notice, with an order of protection,” Salvagni wrote.

The judge also pointed out that one of the cases the state used to buttress its argument that the court should toss the case actually helped the residents make their case.