The Zoning Commission recommends the following for each amendment:

• The Zoning Commission recommends approval of the Text amendment for Action Options on Special Review and Zone Changes (Sec. 27-1623 and 27-1628) and adoption of the ten review criteria on a 3-1 vote.
• The Zoning Commission recommends approval of the Rebuild of Residential uses in Commercial and Mixed Use districts (Sec 27-1504) and adoption of the findings of the ten review criteria on a 4-0 vote.

The City Council approved the amendments to Section 27-1623 and 27-1628 with adjustments made to the first reading ordinance to require a 60% majority vote of the Council to refer an item back to the Zoning Commission.
The City Council approved the amendment to Section 27-1504 as proposed.

Two other amendments were not approved by the City Council. The amendment to Sections 27-307, 27-308, 27-802 and 27-804 related to the provision of open space in mixed residential developments and within newly annexed property through the Planned Neighborhood Development process, was not approved. The Zoning Commission had recommended approval. The Council referred this item to a future Council Work Session for further revision and amendment.

The amendment to Section 27-308 related to creating step-backs between new development in mixed residential zones adjacent to neighborhood districts was denied on first reading. The Zoning Commission also recommended denial of this amendment. 

Planning staff recommends the City Council take second reading action consistent with first reading action for amendments to 27-1623, 27-1628 and 27-1504. 

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 two phases. The first phase of amendments was adopted by Council in May 2023. 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 and the Zoning Commission consideration and hearing is summarized in the Stakeholder section of this memo. The City Council held a public hearing on July 24, 2023, and reviewed the proposed amendment. The City Council approved the first reading with amendments to require a 60% majority vote of the Council to refer an item back to the Zoning Commission.

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 and the Zoning Commission consideration and hearing is summarized in the Stakeholder section of this memo. The City Council held a public hearing on the first reading ordinance on July 24, 2023, and did not adopt the ordinance on first reading. The City Council voted to refer this item to a future Council Work Session for refinement and adjustments. The amendment may come back to a future meeting of the City Council

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 and the Zoning Commission consideration and hearing is summarized in the Stakeholder section of this memo. The City Council held a public hearing on this amendment on July 24, 2023, and approved the change on first reading.

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 part of 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 and the Zoning Commission consideration and hearing is summarized in the Stakeholder section of this memo. The Zoning Commission recommended denial of the text amendment. The City Council voted to deny (5-2) this amendment on first reading on July 24, 2023.
 

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 Builders 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, step-backs and creating delays with applications. The Home Builder's Association sent in a letter of comment on the text amendments. There was general concern with adding requirements for mixed residential zones in a housing market that is very constrained. 

Zoning Commission
The Zoning Commission held a hearing on July 11, and reviewed the text amendments and received the staff recommendation and testimony from the public including John Halverson of Sanderson Stewart. The comments, discussion and motions are summarized by topic area below.

Zoning Commission and Council Options text amendment (Sections 27-1623 and 27-1628)
The Commission asked questions regarding the potential for unnecessary delays because of disagreement over a recommendation rather than "new information" presented at the City Council hearing. The Commission was concerned the option for a "send back" to the Zoning Commission from the City Council might be overly used creating bottlenecks and further delays. Staff clarified that Council and legal staff believe the option to send any item back to the Zoning Commission already exists, and the amendment may put sideboards on how this can be done. Staff explained the once-only limitation would not create too much delay particularly if the alternative is to withdraw or receive a denial. Both of those outcomes either require a 4-month or 12-month waiting period to re-apply. Commission member Goss stated he sat on a Planning Commission in another state that worked under similar provisions and send backs from the governing body were rare. He stated there are also some state laws that require a "raise it or waive it" limitation on land use hearings. Staff explained the conditions to send back an item to the Zoning Commission are the same limitations that apply to sending back a subdivision to the Planning Board for an additional review. The City Council only rarely has used this provision to send a subdivision back to the Planning Board. John Halverson stated he would like to ensure the imperative word "shall" remains within the administrative section of the code so that applications are not caught in an endless loop of indecision. He stated predictability is one of the hallmarks of a good zoning and land use regulation, so he urged the Commission to carefully weigh the benefits of the change.  

The public hearing on this ordinance was closed and Commission member Dan Brooks made a motion to recommend approval for this amendment and adoption of the findings of the 10 review criteria. The motion was seconded by Commission member David Goss and was approved on a 3 to 1 vote, with Commission member Trina White voting in opposition. Ms. White stated she believed the changes would not be beneficial to the development community.

 
Open Space in NX districts and PND text amendment (Sec. 27-307, 27-308, 27-802 and 27-803)
The Zoning Commission received the staff report on this particular amendment concerning clarification and updates to the provision of open space for newly annexed property of 10 acres or more and to new mixed residential developments of 3 acres or more. The Commission also received testimony from John Halverson of Sanderson Stewart. The Zoning Commission asked about how this would be administered and whether the exemptions provided any loopholes that could be exploited. Staff pointed out the potential loopholes were closed in the re-drafted amendment. The Commission members had some concern the requirements may push up the costs of renting an apartment or may deter builders from developing new mixed residential neighborhoods. Staff explained the provisions are modest - 5% of the gross area of 3 acres is only 6,500 square feet. Mr. Halverson stated he wanted to make sure that a developer could put in several small parklets that equal 6,500 square feet in total but not each parklet is 6,500 square feet. Staff explained this is how they would calculate the submitted plans for open space areas as a cumulative amount for all areas for open space and recreation.

The public hearing on this ordinance was closed and Commission member David Goss made a motion to recommend approval for this amendment and adoption of the findings of the 10 review criteria. The motion was seconded by Commission member Trina White and was approved on a 4 to 0 vote.
 
Rebuild of Residential uses in Commercial and Mixed Use districts (Sec 27-1504)
The Zoning Commission receive the staff report and recommendation for approval of this particular amendment. The Commission agreed it was important to preserve owner's equity in homeownership and allow these residences to be re-built in commercial or mixed use zones. There was no other testimony on this amendment.

The public hearing on this ordinance was closed and Commission member Dan Brooks made a motion to recommend approval for this amendment and adoption of the findings of the 10 review criteria. The motion was seconded by Commission member Trina White and was approved on a 4 to 0 vote.
  Step-backs for taller structures in NX adjacent to N districts (Sec 27-308)
The Zoning Commission received the staff report and recommendation to approve the proposed amendment. The Zoning Commission voiced several concerns based on the draft ordinance and the research information presented by the Planning staff. The Zoning Commission did not believe the proposed step backs would improve any of the potential future locations where this might be an issue. The Zoning Commission looked at the handful of existing vacant NX zoned lots adjacent to N zoned lots and found the proposed amendment would not be beneficial to the stated growth policy of encouraging infill. Chair Michael Larson stated it appeared the issue seems to be an isolated situation and rare. Commission member Goss was concerned that if approved, the same sort of regulation could be adopted for structures in identical zone districts. He stated this would be especially challenging for areas north of Rimrock Rd. Commission members were curious what project spurred the initiation of the amendment. Staff explained the new Hunter's Point apartments in the 2900 block of Central was the catalyst. Mr. Halverson testified he was opposed the amendment. He stated the proposed amendment is a bad amendment, the step-back is arbitrary, is not compliant with Montana Supreme Court decisions that residential of any kind is compatible with residential development. He stated the amendment would defeat in-fill efforts and is discriminatory based on housing choice and socio-economic class. He stated a 3-story mansion in an N3 zone can be 5 ft from the rear property line, but a 3-story apartment building has to set back at least 50 feet from the same property line.

The public hearing on this ordinance was closed and Commission member Trina White moved to recommend denial finding that the proposal was not conforming to the goals of growth policy. The motion was seconded by Commission member Brooks. Mr. Brooks stated he believes the amendment is excessive and arbitrary. He stated the properties that would be effected by the amendment do fit into the neighborhoods where they are located. The motion to recommend denial was approved on a 4-0 vote. Commission member Greg McCall arrived late to the hearing and abstained from voting.
 

The City Council may take one of the following actions, including the Zoning Commission recommendations on the proposed amendments:

• Approve and adopt of the findings of the ten review criteria for Zone Change 1031; or,
• Approve with specific changes to the draft ordinances for Zone Change 1031; or
• Deny one or more of the proposed amendments 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.

The Council approved the text amendments for Sections 27-1623 and 27-1628, as well as Section 27-1504 on first reading on July 24, 2023.
The Council denied the text amendment for Section 27-308 regarding step back requirements on first reading on July 24, 2023.
The Council referred the text amendment concerning open space and recreation to a future Council Work Session at the first reading on July 24, 2023.

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.