Planning staff recommends the Zoning Commission recommend approval of these draft amendments to the zoning code based on the findings of the 10 review criteria.

In February 2021, the City Council adopted a new zoning code and zoning map for the entire city. The Council directed staff to continually monitor the new code to ensure the text of the regulations was working as intended and any corrections or housekeeping changes could be made. The Council also directed staff to monitor the implementation to consider any substantive changes to adjust the code, so it continues to provide support to the development goals of the adopted Growth Policy and general policies of Billings.

Planning staff brought forward a bundle of code corrections and amendments last year (June 2022). Those amendments were approved by the Council. Planning staff has been working on more substantive amendments to the code based on staff experience implementing the new code, information from professionals who use the code, and from the Council in its reviews of zoning applications. These substantive amendments include adjustments to Council action options for special reviews and zone changes, open space provisions in NX and PND district assembly, allowing rebuild of residential uses in commercial and mixed use zones by right, and step-backs of taller buildings between neighborhood and mixed neighborhood zones. These adjustments are not indicators of a "broken" set of regulations. Just as a new car or truck has a break-in period, so do new codes and regulations. As a completely new code, the need to monitor for glitches or "pain points" is important. These adjustments are just part of breaking in a new code. Planning staff believes this set of amendments should be the last significant adjustments needed for a few years. Planning staff and the City Council should re-visit the zoning and other land development codes regularly and when a new Growth Policy is adopted.

The City Council took action to initiate these amendments for review, public hearings and adoption at its meeting on April 24. The City Council's action was to begin the process of public review and adoptions. The City Council will act on the specific amendments once the Zoning Commission provides a recommendation and once the Council holds a public hearing. The number of amendments requires these to be brought forward in phases. This second phase will include changes to the administrative procedures for special review and zone changes, open space provision in multifamily and PND district assemblies, rebuild of residential uses in commercial and mixed use zones, and step-backs between taller buildings in mixed residential districts adjacent to neighborhood districts. Planning staff has worked with several stakeholders over the last several months to craft the draft amendments. This report will describe each amendment and will include just one set of findings for the review criteria for all four ordinances. Each ordinance by city regulation may only address a single comprehensive subject, must have a public hearing and recommendation from the Zoning Commission and then must be voted on by the City Council at two separate meetings. 

Council action options for special review and zone changes - Sections 27-1623 and 27-1628
The current code for Zoning Commission and Council actions on zone changes or special review requests is a limited set using the non-discretionary verb of "shall". It is important to applicants and the community to have predictability built in to a regulation, however, there also needs to be flexibility to balance the code and allow options and choices. The code as currently written does not allow much flexibility in decision-making. For example, the Zoning Commission does not have the option of granting a delay of action on a special review even though this option is allowed for a zone change. The City Council would also like the ability to return zone changes or special review requests to the Zoning Commission for further hearings including when changes to a site plan or zoning boundary are contemplated after the Zoning Commission hearing is complete.

The Zoning Commission met on June 6 and discussed the draft amendments. The Commission was concerned the amendment might create unintended loopholes and potentially put applications in an endless loop of delay and reviews. Planning staff updated the amendment based on these concerns. Staff has recommended a "one-time-only" limitation for hearing delays or Council sending an application back to the Zoning Commission for another hearing. Staff believes the changes to the draft diminish the concerns with loopholes and delays. The draft ordinance is attached.

Open space provision in NX zones and PND district assembly - Sections 27-307, 27-308, 27-802 and 27-803
The new 2021 code incorporated the requirement to provide open space and recreation space in multifamily developments of 3 acres or more and within any new property annexed to the city through the Planned Neighborhood Development (PND) process. Previously, the only way to require open space within a neighborhood was through the subdivision process. Some multifamily developments did not need to go through a subdivision process and the subdivision regulations allow the developer to "opt-out" from providing any on-site park or recreation space by giving the city an equivalent cash amount in lieu of dedicating parkland. The code for new multifamily developments over 3 acres does not specify any amount of open space or that it must be developed. There are three choices of open space type allowed. The language is also vague and hard to implement. Council directed staff to correct the code language to eliminate the vagueness and to be more specific on the size of open space and base it on the total area of multifamily development.

The Planned Neighborhood Development zone change process requires a minimum of 2 percent of the net area be designated as open space. There are 5 types of open space to choose from, but two of those are restricted to mixed use type developments. This code section requires development of the open space and continued maintenance either by a homeowner's association or by the city if it is accepted as public park land. Most of the open space designated through the PND process has not been accepted as public parkland because of its size and intended uses. The City Council has expressed concern the types of open space designated through the PND process are too small or provide little recreational opportunity in these new neighborhoods. The Council directed staff to increase the minimum percentage and put in some criteria for choosing an open space type. The proposed revisions eliminate the vagueness from the NX zone district requirements and increase the minimum designation of the open space through the PND process from 2 percent to 5 percent.

The Zoning Commission discussed the draft amendment on June 6, and was concerned with potential loopholes created by specifying a certain minimum acreage when the requirement would kick in, the lack of flexibility for mixed residential development in subdivisions that have already dedicated parkland or are within walking distance of a developed park. The Commission also expressed concern that open space did not have a minimum "depth or width" provision so un-useable areas might be designated for recreation. The Commission was also concerned with the added burden this places on mixed residential developments especially considering the crisis in housing the Billings area is currently experiencing. Mr. Doug Wild from the Home Builders Association also expressed concerns with the proposed revisions in light of the housing challenges.

Planning staff revised the draft amendment to address these concerns except for the potential to cost burden new mixed residential developments where no open space has been previously dedicated or developed. Until the 2021 zoning code amendments, open space provisions for new developments were exclusively handled through the subdivision process. The subdivision regulations do not require development of any dedicated parkland, only that it be provided. The open space dedicated through subdivision also must meet the city's standards for area, suitability for active recreation, and other park policies set by the city. In many cases, this leads a developer to provide cash-in-lieu of parkland dedication. While this provides revenue to the Parks Department, it does not provide the types of open space that are most usable for everyday outdoor activities in apartment communities such as outdoor dining, pocket park areas to accommodate a variety of recreation (sand boxes, play structures, benches, small areas fenced for dog play, etc.). Developers who provide these small spaces have to arrange for long term maintenance and cover liability. These amenities do add cost to monthly rents. The draft ordinance is attached. 

Allow re-build of residential uses in commercial and mixed use zones - Section 27-1504
The new code for Mixed Use and commercial zone districts requires that a commercial (nonresidential) use be either on the same property or within the same building as a residential use. Many properties previously zoned commercial were allowed to have residential use as the sole use of the property without any paired commercial uses on the same property or in the same building. There are approximately 52 properties in commercial or mixed use zone districts in the Heights that are only developed with residential uses. There are about 95 such properties in the downtown area, about 70 properties between downtown and 24th St W, and about 35 properties in the Southwest Corridor and West Billings. While this is not a large number, many of these properties are owner occupied and for many are the only substantial family investment. These properties cannot receive a standard mortgage or insurance because the code does not allow a full re-build of the residence as it is.

The current code for re-build in any neighborhood zone district allows any residential use to be re-built in the district even if it is not conforming to the specific use limitations. For example, if there is a 4-unit structure in the N3 zone, a single family zone, then we can issue a re-build letter for a 4-unit structure. This amendment would extend this residential re-build allowance into the mixed use and commercial zones where residential uses are allowed but are required to be on the same lot as a commercial use or in the same structure as a commercial use.

The Zoning Commission discussed the draft ordinance on June 6, and had no concerns. The draft ordinance is attached.

Step-backs of taller buildings between neighborhood and mixed residential neighborhood zone districts - Section 27-308
The current code allows NX zones and N zones to be adjacent to each other. The NX2 and NX3 zone allows building heights up to 4 stories, while most N districts allow buildings between 1 and 3 stories. The code requires a larger setback for any structure in an NX2 or NX3 zone where the adjoining zone is a Neighborhood or Residential Manufactured Home zone. The additional rear setback is 20 feet and the additional side yard setback is 15 feet from property lines. Many Billings' homes in the N districts are single story with some 1-1/2 story or two-story homes. A four-story structure adjacent to a single story structure can be an abrupt change. In the Mixed Use (MU) zone districts any new structure where the property adjoins or is across an alley from a neighborhood zone district requires building setbacks of 30 to 50 ft depending on the number of stories on the commercial building. The City Council received complaints from residents in a neighborhood south of a new multifamily development on Central Avenue. The new multifamily structures met the required additional rear and side setbacks. The Council was concerned about the height difference between the homes - 1.5-story homes setback about 20 ft from rear property lines - and the new 3-story apartment buildings also setback 20 ft from the rear property line. The distance between the new multifamily and the existing single family homes is approximately 40 feet. The numerical height of the new 3-story multifamily buildings are about 35 to 36 feet. The numerical height of the existing homes is about 24 feet.

The Zoning Commission reviewed the draft amendment on June 6, and had concerns with the proposal. The primary concern was with the large setback required from a rear or side property line whenever a structure is either over 2 stories or 35 ft above grade. The Commission was concerned the step back was disproportional to any negative impact between buildings. The Commission was concerned the 50-foot setback required for a building 36 feet tall was not necessary to maintain compatibility between essentially the same land use - residential dwellings. The Zoning Commission directed staff to research the requirement further to determine what is the potential for this issue to arise in the future - map where N districts are adjacent to NX2 or NX3 vacant parcels - and to provide schematic scaled drawings of different step backs between buildings and property lines. City GIS staff developed a map showing where the potential exists for the step backs to be applied in the future. There are a handful of potential locations and all are on small lots. A 50 ft step-back for a building over 2 stories on these lots would likely require a variance or the redesign of the project to fit a 2-story or 35 ft maximum. It is likely fewer dwelling units would be available. In addition, it appears the potential future conflicts are not widespread. The map of these areas is attached.

The schematic drawings were prepared by Planning staff as hand sketches, but are scaled to show separation distances. Comfortable viewing angles (neck flexion) of either elevation or depression ranges between 40 and 80 degrees above or below the 0^o angle of the horizon. For example, a viewer looking out a 3rd floor window could comfortably view objects below the window to a maximum of 80 degrees below their horizon. The viewer would have to lower their head to see at this angle. Similarly, a person standing in a backyard could comfortably elevate their head to see up to 80 degrees above their horizon to see a taller structure. Without moving the neck or head the maximum field of vision is less than 40 degrees either above or below the horizon. This information is important to understand the "view shed" of people within a taller structure or people on the ground. It also changes based on the location of the viewer. For example, if people on both properties are on ground level and there is a 6-ft tall opaque fence between the yards, there is zero visibility between the two groups of people. Trees and vegetation along property lines can also block a field of view between properties. Natural surveillance to and from public spaces such as a street or parking lot provides a good level of crime prevention. The backyard space has always been considered a private space. A privacy fence may or may not provide security for the backyard. The backyard can be a place where burglars and other criminals can commit crimes without anyone noticing. Taller fences - more than 6 feet - can be a deterrent as these are not easy to scale, but will not prevent a determined person from getting into a backyard. There are strategies that can be used to make a privacy fence more secure from trespassers including planting shrubs with thorns that make scaling a fence hazardous or building a fence that has alternating privacy and more open fence panels (trellis panels) to eliminate hiding places within the backyard.

There are several existing examples where multifamily developments adjoin neighborhood zone districts. This includes apartment buildings at 3430 Lynn Avenue, 640 Lake Elmo Drive, Killarney Street, S 28th St apartments, Avenues D and E apartments and several other locations. Most of these apartment developments fit in well with the surrounding uses. Many communities in the Midwest and in the Rock Mountains have a similar development style that includes small to medium apartment complexes adjacent to single or two family dwellings. Examples of this common urban form are attached.

Planning staff did not modify the proposed amendment for the increased step backs between new multifamily apartments and property lines adjoining or across and alley from an N zone district. The draft ordinance is attached.
 

Planning staff worked with several groups of stakeholders over the last two years while implementing the new zoning code including the City Council, Home Builders Association, Billings Area Realtors, architects, engineers, planners and property owners. The amendments were produced by monitoring real life application of the code and collecting feedback over time from the various stakeholder groups. Planning staff shared the draft amendments with the stakeholders through direct email, placed a legal ad and posted the drafts on the Planning division's webpage and the Zoning Commission discussed the items during their June 6th meeting. Since posting the legal ad and prior to this Zoning Commission hearing, staff has received comment from Doug Wild, a member of the Home Builder Association. Generally the comments suggest that each amendment creates a slightly tougher regulatory environment which will impact cost. There were additional concerns specific to parkland requirements, stepbacks and creating delays with applications. Individual landowner notifications are not required for these text amendments.

The Zoning Commission may take one of the following actions:

• Recommend approval and adoption of the findings of the ten review criteria for Zone Change 1031; or,
• Recommend approval with specific changes to the draft ordinances for Zone Change 1031; or
• Recommend denial and adopt different findings of the ten review criteria for Zone Change 1031; or,
• Delay action on the zone change for up to 30 days.

In case of a tie vote on the text amendment zone change, the application will be delayed for 30 days until the next Zoning Commission meeting. The Zoning Commission must forward a recommendation with findings to the City Council.

Adoption of code amendments may affect the Planning Division budget. Municode is the official codification company for Billings. Every amendment to the code has a fee that has usually been assessed and paid for by a department or division. However, the City Code is not particular to one Division or Department. It is utilized by many City staff and is designed to benefit and protect all City residents. It is appropriate and accurate for the cost sharing of codification costs for zoning code updates through the general fund.

8) Whether the new zoning considers the character of the district and the peculiar suitability of the property for particular uses;
All the amendments have been considered in a way that continues to carry out the intent of the zoning code as a whole and considers how open space, administrative options, preservation of property investments and building separations can provide certainty and integrate in existing built environments. Generally, these amendments are consistent with existing fabric of both commercial and residential neighborhoods. Residential uses in commercial and mixed use areas fit into the neighborhoods where they are located. Ideally, commercial and mixed use zones would re-develop over time and make the next incremental investment in property improvements. Until that time, allowing these existing residences to be re-built will assist in preserving property value and prevent disinvestment.

9) Whether the new zoning will conserve the value of buildings;
In general, the code amendments should conserve the value of buildings throughout the City and the amendments do not alter the code in a way that would decrease values. In particular, some adjustments may ease some nonconformity burdens.

10) Whether the new zoning will encourage the most appropriate use of land throughout the City of Billings.
The code amendments when working with the code as a whole encourage appropriate and compatible uses, design and siting of land in Billings.