Housing Expert: Montana Needs to Build 70,000 Housing Units
"It's just a matter of scarcity. It's a matter of we don't have enough."
The Montana Building Industry Association (MBIA) Executive Director told The Montana Chronicles that the state needs to build 70,000 housing units to address its housing shortage.
“When the inventory is up, the price goes down, but when the inventory is down, the price goes up. Supply and demand. I don't believe in silver bullets, but that's the easiest way I can describe it. It's just a matter of scarcity. It's a matter of we don't have enough,” Andy Shirtliff said.
Home building has to take place everywhere in the state and not just in one location, according to Shirtliff.
He said it is “vital” that local government, state government, county government, federal government, non-profit sector and private sector work together to fix this problem.
To help address this issue, Shirtliff said the MBIA is focused on three issues during this 2025 legislative session: access to water, regulations and workforce development.
The MBIA is monitoring a number of bills, but according to Shirtliff, the association will “wait and see” what these final bills look like.
Shirtliff said that water is Montana’s “most precious resource” other than its people, but the state needs to allow builders to have access to water “because growth is happening,” and if Montana limits water access, housing prices go up.
“Having access to water outside of the municipalities is where the challenge lies,” he said.
Shirtliff added that it is important for builders to have access to water areas outside of municipalities because hooking up to these water systems via pipe or developing their own water system is something they can’t do because “they don’t have the time and the money.”
He said that Montana’s municipalities have strong water systems; however, for areas outside the cities, they “don’t have that option” and will have “to make some tough decisions.”
Shirtliff said that housing prices go up if builders can’t access water rights.
“Access to the water is a piece of that because if we can't find a place to build here in town, or if it's too difficult, might as well just build outside of city limits. There's an effort to limit that, but we need to be able to build homes.”
Areas that are quickly growing, according to Shirtliff, are the Bozeman-Gallatin Valley, Flathead Valley, Missoula Valley, Hamilton Valley and Helena Valley.
According to the Daily Montanan, the U.S. Census Bureau estimates that as of July 2024, Montana has a population of 1,137,223. From 2023 to 2024, 5,931 people moved to Montana, a .52 percent growth rate.
From 2020 to 2021, Montana’s population grew by almost 2 percent.
Minneapolis Federal Reserve Bank data shows that the states with the most people moving to Montana are Arizona, Colorado, Nevada, Utah and Idaho, the Daily Montanan reported. California is ranked 10th.
The National Realtor Association released a study in September 2024 showing Montana had the least affordable housing in America.
Improving regulation can also help speed up the homebuilding process. Shirtliff noted that the cost of permits to build in Montana is “ever-changing.”
He added that the MBIA is not against regulations or permits.
“It’s just being reasonable,” Shirtliff said.
“You pay a $1,000, it used to be $500. Where does that money go? What is it being used for? Why did the rates increase? If it’s because our neighbors in Butte, Billings or Bozeman increased their rates, we should, too. That might not be the best reason,” he added.
The executive director said that even though cities, counties and the state don’t build houses, they “can affect the price of it” and the amount of time it takes to build.
“There's some hoops that some of these developers have to jump through,” he said.
Shirtliff added that when permitting a house, it needs to be done “reasonab[ly]” and “timely.”
“We don't have the time to sit here and go through the process. We need to build homes now,” he explained.
In 2014, Pennsylvania State University professor Douglas Wrenn and Ohio State University professor Elena Irwin released a paper that found a “1% increase in average expected approval time results in a decrease in the probability of development by 0.94%.”
Furthermore, the National Association of Home Builders (NAHB) released a study in 2022 showing that “regulations account for 40.6 percent of apartment development costs.”
When building a new home, the NAHB also published a paper in 2021 detailing how regulations can potentially account for “$93,870 of the final house price.”
Shirtliff said the new homes will not be built “overnight” and that it will " take some time.”
Regarding the workforce for building homes, the executive director said that the industry doesn’t have enough workers.
“It's not about just attracting workers. It's about retention,” he said.
According to Montana employment projections, the construction industry expects to add approximately 1,060 jobs annually until 2032. This projection will be the most for an industry in Montana.
Construction Coverage released a study in September showing that a construction worker would need to work 68 hours a week to afford a medium-priced home in Montana. This ranked 12th-worst in the country.
"Now, more than ever, Montana needs carpenters, plumbers, electricians, welders, masons, and machinists," said Governor Greg Gianforte in a press conference, according to montanarightnow.com. "Montana needs to invest in developing a highly skilled workforce to build the future, and we will continue to make progress."
While working for the Montana Department of Labor, Shirtliff said he created the “5Rs.”
“We have to rethink who we're hiring. We have to recruit. We have to retain. We have to retrain, and then we have a whole bunch of resources that have to work together to make it work,” he said.
The executive director added, “It's just like a puzzle piece. We all have our part to put in, and then we can create the bigger picture. And the workforce is a big piece of that because you have to have people that are gonna build homes.”
Shirtliff said having “the ability to have a trained and educated workforce is vital.”
“You need people [who] are going to build homes, and we are seeing an uptick in trades training,” he said.
Shirtliff said that when it comes to building a home, many things go into creating it, such as HVAC, plumbing, electrical work and interior work.
According to Shirtliff, childcare is “a huge need.”
“Some folks work from home because they can't find childcare. It's the best way to do it without losing their job or their paycheck,” he said.
In 2023, 66,000 workers could not fully participate in the workforce due to childcare costs, according to Montana’s 2024 Labor Day Report.
Despite all these things, Shirtliff said that the housing problem in Montana is “solvable.”
“It's going to take time. It's going to take money. It's going to take a lot of people kind of not getting everything they want. And that includes us. It's just kind of the nature of things. That's the challenge of our generation: housing.”
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Zachery Schmidt is the founder of The Montana Chronicles. If you have any tips, please send them to montanachronicles@proton.me.