The Zoning Commission recommends approval of Zone Change 1041, the amendments to the zoning regulations to comply with the elements of SB 245, and adoption of the findings of the 10 review criteria.

In 2023, the Montana legislature passed several laws regarding local land use and zoning provisions. One of those new laws, SB 245, requires cities of 5,000 or more in population to allow, by right, multi-unit developments in all commercial and mixed-use zoning districts. The law includes definitions and restrictions on required off-street parking for multi-unit developments. The planning staff has drafted a zoning code amendment to align our local code with the state law requirement. The law is already in effect, and the city must comply. SB 245 is attached to this memo along with the draft ordinance.

Prior to the zoning code update of 2021, all the commercial zone districts in the city allowed multifamily developments except for the Residential Professional (RP) zone that only allowed single-family residential uses. For example, Riverfront Pointe Estates east of Mullowney Lane was zoned Highway Commercial under the old zoning regulations. Highway Commercial allowed all types of residential uses from single-family to multifamily uses. As we examined the previous code for areas of unpredictable outcomes, one of the main concerns was in the commercial zones that included a large universe of uses that could be incompatible if placed in the same area. The revised code for most of the commercial and mixed use zones allows residential uses, but not on the first floor along the street frontage. The code now requires that residential uses be behind a non-residential ground-floor use or in the story above the first floor. The new state law removes the ability to enforce this "ground-floor" non-residential use. The code amendment removes this reference in all commercial and mixed use zones where it appears in the code. The other building and siting standards for those districts will remain in place, so buildings that include only residential uses will still need to meet those standards. Administrative relief can be granted for some of those elements where and when it is necessary.

The state law defines a "multi-unit building" as a structure with five or more dwelling units where those units share a common separation like a wall or ceiling and where there is no access between the units except for a common hallway. This definition sets a "floor" of five units but does not set a maximum limit for local regulations. The city devised its zoning district assembly based on the guiding principles of the Project ReCode code update and on the city's adopted Growth Policy and neighborhood plans. The districts that qualify as commercial or mixed use in Billings include: Neighborhood Office (NO), Neighborhood Mixed Use (NMU), Corridor Mixed Use 1 and 2 (CMU1/CMU2), Downtown Support (DX), Heavy Commercial (CX), Central Business District (CBD), EBURD zones of Rail Spur VIllage Main Street (RSVMS), Central Works (CW) and North 13th St Main Street (13th). Residential uses in Public zone districts of Public 2 (P2) and Public 3 (Campus P3) are generally restricted to use by associated organizations in those zone districts. For example, the P3-Education Campus for Rocky University is allowed to build all types of residential uses for students, faculty or other persons associated with the college. These are not mixed use or commercial districts. The proposed text amendment allows up to a 5-unit multifamily dwelling in the NO district, the NMU zone allows up to 8-units per structure, and the remaining more intense zone districts allow more than 8 units per structure. In the CX zone, staff is not proposing to allow residential use of less than 5-units per structure. The multifamily residential use in the CX zone is more compatible than a lower density development style.

The proposed text amendment also amends the off-street parking code to comply with the restrictions in SB 245. The law only allows a city to require one off-street parking space per dwelling unit in a multifamily development. The current off-street parking code for multifamily use in a mixed-use building is two spaces per unit. This is well above the market for parking spaces for residential units in a mixed-use development. The parking code also has a different ratio for multifamily developments that are not part of a mixed-use development. That ratio is 1.5 spaces per dwelling unit, with one additional space for each 10 dwelling units in the overall development. For example, if I build a 200-unit apartment complex, I need to provide 300 spaces plus 20 more overflow spaces for a build-out ratio of 1:6 spaces per dwelling unit. If any of those surface parking spaces are "assigned" they cannot count towards the minimum requirement. The 320-space parking lot for the 200-unit apartment complex would take up at least 2.5 acres of land. The footprint of the residential buildings in this example (eight 24-unit buildings and one 8-unit building) would only take up 1.7 acres of land. The off-street parking code requires more land for cars than it does for housing people. Required off-street parking can add 10% to 20% of the cost of building a dwelling unit in a multifamily development. The draft amendment will allow each developer to provide just one off-street parking space per dwelling unit. The requirement for overflow parking or penalties for assigned parking spaces has been removed. Many multifamily developers will choose to provide more off-street parking than the proposed minimum requirement. 

Many urban and metropolitan areas in the United States have chosen to eliminate all minimum off-street parking standards from their development codes. Sixty-six cities in the US have eliminated all off-street parking mandates. These cities are diverse and include smaller cities and cities with similar populations and demographics as Billings. No cities in the Rocky Mountain West have eliminated all off-street minimum parking standards. Billings eliminated parking minimums from the CBD (1984) and EBURD (2012) zone districts.

The planning staff sent out drafts of the zoning amendment to the Home Builders Association, the Billings Area Realtors and several builders, developers and professional consultant firms. A legal ad was published, and the information was posted on the Planning Division's website. No concerns or comments have been shared with the planning staff as of the writing of this report.

Zoning Commission Public Hearing May 7, 2024
The Zoning Commission held its public hearing on the amendments and received the staff recommendation and testimony from John Halverson of 239 Avenue F. Based on discussion with the Zoning Commission, a minor adjustment was made to the revision to the Central Business District description, and to the Use Table. Mr. Halverson testified in favor of the amendments especially the changes to the off-street parking code. He stated the government should allow the market to figure out the appropriate off-street parking and the regulations have demonstrated our ineffectiveness in setting efficient parking ratios.

Chair Daniel Brooks closed the public hearing. Commission member David Goss made a motion to recommend approval with the minor wording changes and adoption of the 10 review criteria. The motion was seconded by Commission member Greg McCall and unanimously approved on a 4-0 vote. Commission member Beau Mulvaney was absent from the meeting.

The City Council may:

• Approve and adopt the findings of the ten review criteria for the text amendments as recommended by the Zoning Commission; or
• Approval some of the proposed text amendments; or 
• Deny and adopt different findings of the ten review criteria for the text amendments; or
• Delay action on the text amendments

It is important to note that if the City Council does not approve the changes, Billings will be out of compliance with state law and could be challenged.

Approval of some or all of the text amendments to the zoning regulations will have a financial impact on the City Clerk's or Planning Division's budget. The city contracts with Municode to incorporate changes to the city's code to ensure consistency and accuracy. Municode charges for the city for this service. City Administration has historically distributed these costs to departments and divisions based on the code amended. However, changes to the City code do not just benefit or affect the Planning Division, or any other Department. The entire community is affected by City code changes and so the cost of updating the City code should be covered by the General Fund which distributes the cost across all users of City services.

 

Prior to making a decision on the text amendments the City Council shall consider the Zoning Commission's recommended findings as follows:

1. Is the new zoning designed in accordance with the Growth Policy?
The proposed minor amendments are consistent with 2016 Growth Policy and the Project ReCode Guiding Principles:   

2016 Growth Policy:

• Essential Investments (relating public and private expenditures to public values)
• Place Making (Enhance, maintain, preserve, and improve existing public places)
• Community Fabric (attractive, aesthetically pleasing, uniquely Billings)
• Strong Neighborhoods (livable, safe, sociable and resilient neighborhoods)
• Home Base (healthy, safe and diverse housing options)
• Mobility and Access (transportation choices in places where goods and services are accessible to all)
• Prosperity (promoting equal opportunity and economic advancement)

Project ReCode Steering Committee Guiding Principles (2019):

• CLARIFY AND SIMPLIFY - All new regulations will be written in Plain English to maximize readers’ ability to find what they need, understand what they find, and use what they find to meet their needs.
• REGULATE WHAT MATTERS - The regulations will have a clear alignment with community goals today while allowing for changing goals in the future.
• PRESERVE AND PROTECT THE RIGHTS OF OWNERS AND RESIDENTS - The regulations will recognize and incorporate clear and well-defined processes that uphold property rights and access to housing choices.
• PREVENT CONFLICTS - The regulations will be internally consistent and will not create direct or un-reconcilable conflicts.
• OPTIONS AND CONTEXT - The regulations will provide a range of site development options with clear criteria and guidelines for allowing alternatives to future development as well as changes to existing neighborhoods as the community’s goals change.
• MAINTAIN WHAT WE CARE ABOUT - The regulations will encourage stability of existing neighborhoods while allowing for changes over time.
• FILL THE VOID – The regulations will consider and include land uses and combinations of land uses that have been overlooked or not considered in the current code and methods for accommodating new use options.
• PROSPERITY – The regulations will serve to support the community’s need and desire to remain regionally competitive in the recruitment of businesses, expansion of existing business, and private investment in the economy, all to promote job creation.

2. Is the new zoning designed to secure from fire and other dangers?
A finding for this criteria is not relevant in the context of adjustments to the code.
 
3. Whether the new zoning will promote public health, public safety and general welfare?
Public health and safety will be promoted through the text amendments. Amending the local code to align with the state law requirements will promote regularity in the application of law. This promotes public health, safety and general welfare.

4. Will the new zoning facilitate the adequate provision of transportation, water, sewerage, schools, parks and other public requirements?
A finding for this criteria is not relevant in the context of adjustments to the code.

5.  Will the new zoning provide adequate light and air?
A finding for this criteria is not relevant in the context of adjustments to the code.

6.  Will the new zoning effect motorized and non-motorized transportation?
A finding for this criteria is not relevant in the context of adjustments to the code.  

7. Will the new zoning will promote compatible urban growth?
The zoning amendment promotes compatible urban growth in the areas of the City by correcting errors in the adopted code.
 
8. Does the new zoning consider the character of the district and the peculiar suitability of the property for particular uses?
A finding for this criteria is not relevant in the context of adjustments to the code.  

9. Will the new zoning conserve the value of buildings?
A finding for this criteria is not relevant in the context of adjustments to the code.  
 
10. Will the new zoning encourage the most appropriate use of land throughout the City of Billings?
A finding for this criteria is not relevant in the context of adjustments to the code.