On January 13, 2012, Montana Attorney General (AG), Steve Bullock, issued an opinion in response to a question from the Missoula County Attorney regarding the state’s review requirements for subdivisions for rent or lease. Specifically, among other things, the AG opinion established that developments that have more than one building for rent or lease on a single tract of land are in fact subdivisions for rent or lease, and need to be reviewed as subdivisions under the Montana Subdivision and Platting Act. This opinion is different from how the City of Billings has been reviewing these types of developments under Article 23-600 of our local Subdivision Regulations. Therefore, the City Subdivision Regulations are in conflict with State law and should be updated to be consistent with it.

Since January, Planning staff has been informing the development community of the new AG opinion, and looking carefully at all new developments proposed for rent or lease. Planning staff, in consultation with City Legal and other affected City Departments, has also drafted amendments to the City of Billings Subdivision Regulations, and is now prepared to bring them forward to City Council for consideration. The City-County Planning Board held a public hearing and reviewed the proposed amendments to the City Subdivision Regulations on August 28, 2012. The Planning Board failed to make a recommendation on the amendments at that meeting. The City Council must hold a public hearing on the proposed amendments and decide whether to adopt them.

The City Council may:

• Approve the proposed changes to Article 23-600 of the City Subdivision Regulations;
• Approve the proposed changes with amendments; or
• Not approve the proposed changes. If the City Council chooses to not approve the amendments, the City's Subdivision Regulations will be in conflict with State law

There are no foreseen financial impacts to the City for adopting the Amendments to Article 23-600 of the City Subdivision Regulations.

The Montana Subdivision and Platting Act (76-3-101, et seq., MCA) was established in 1973 to provide guidance to local governments in Montana when regulating the division of land. The Act is intended to provide consistency of subdivision review throughout the state by providing review criteria and procedures, and mandating local governments to adopt their own subdivision regulations in compliance with the provisions of the Act.  Through the years, the Act has been amended, re-interpreted, and updated numerous times necessitating local governments to update their own regulations. In January of this year, one such re-interpretation by the Montana AG caused many local governments, including the City of Billings, to change how they review 'subdivisions for rent or lease.'

Currently, the City Subdivision Regulations define a subdivision for rent or lease as when any portion of a parcel is rented or leased for the purposes of situating a temporary or permanent residential or commercial structure owned by the renter or lessee. This definition was derived from the advice of a previous AG's interpretation of the Act, and essentially ties the rent/lease action to the land itself, not the structures placed on the land.  Primarily, under the current definition, manufactured home parks and RV parks were the developments subject to subdivision for rent/lease review.

The 2012 AG Opinion states that a subdivision for rent or lease is actually a development that has more than one building for rent or lease on a single tract of land, therefore tying the rent/lease action to the buildings or structures on the land. Because of this, now any development that has multiple buildings being rented on a single tract will need to undergo subdivision review. This will include multi-building apartment complexes, self-storage complexes, business parks on lease land, etc.

The proposed amendments are an effort to do a few things. First, to redefine the term subdivision for rent or lease, and establish some parameters for what type of development needs to be reviewed, under the new interpretation of the Act. Second, the amendments establish a review process and development standards for these developments. And lastly, the amendments exempt subdivisions for rent or lease from the existing Master Site Plan review, that is required when multiple buildings are being placed on lots. 

There were no public comments received at the Planning Board’s Public Hearing held on August 28, 2012. However, Planning Staff met with several interest groups prior to the Public Hearing to explain the need for the updates and to go over the proposed amendments. These groups included the Homebuilders' Association, the Billings Association of Realtors, and the Development Process Advisory Review Board. Also, email notices were sent out to nearly 300 patrons of the Planning Division, and the proposed amendments were made available on-line and in paper form.

The Planning Board failed to pass a motion with a recommendation to the City Council regarding the proposed amendments to the City Subdivision Regulations.  The Boardmembers expressed concern about the possible loophole in the law that allows a single, large, multi-unit apartment building to not be reviewed for its impacts, while two single-unit detached buildings for rent would be reviewed. The Board also indicated that the Legislature should address the problems in the law in the next session.

The proposed amendments will bring the City of Billings Subdivision Regulations into compliance with the Montana Subdivision and Platting Act, as it is currently written and interpreted.