Montana’s ‘Miracle’ Housing Reforms Move Forward

One of the nation’s most ambitious housing deregulation efforts just survived its biggest legal challenge. Other states should take note.

Courtesy Matt McClain/The Washington Post via Getty Images

In 2023, Montana did something housing-poor blue states have struggled to do: it passed a sweeping package of pro-housing reforms to streamline local regulations and remove barriers to building new homes. Dubbed the “Montana Miracle,” the package—led by the state’s Republican-dominated legislature—represented one of the most ambitious state-level efforts in the country to tackle the housing shortage by expanding what property owners are allowed to build.

The reforms, however, faced immediate legal resistance. Shortly after the bills were signed, a group of homeowners filed suit challenging the laws. A sympathetic district court temporarily blocked parts of them from taking effect. For more than two years, the package operated under a legal cloud of uncertainty.

Last month, the Montana Supreme Court put the debate to rest. In a unanimous decision, the court upheld the reforms in their entirety. The Montana Miracle is now moving full speed ahead—and the results could reshape the national debate over housing regulation.

In the popular imagination, Montana is associated with vast open spaces and a sparse population. But its cities have been caught in a housing squeeze that rivals many coastal metros. Between 2010 and 2020, Montana’s population grew by about 10 percent—well above the national average.

The COVID pandemic only intensified the trend. As remote workers fled coastal cities and a growing obsession with the American West took hold—fueled in part by television shows like Yellowstone—Montana’s population boomed.

The state’s housing supply did not keep pace. As a result, Montana has experienced some of the highest housing-price increases in the country. Its biggest cities—many of them blue enclaves amid a sea of red rural counties—had adopted California-style zoning that sharply restricted housing density. In Missoula, for example, three-quarters of residential land was zoned exclusively for single-family homes—nearly identical to Los Angeles.

“If our cities are zoned like L.A., they will grow like L.A.,” Kendall Cotton of the Helena-based Frontier Institute warned lawmakers in 2023. “If we want to preserve Montana and have it not become like California, we have got to address this California-style zoning in our cities.”

The 2023 reforms attempted to address those concerns. The package overhauled local land-use planning rules to streamline development approvals, required cities to allow duplexes wherever single-family homes are permitted, mandated that municipalities allow accessory dwelling units (ADUs) by right on any lot containing a single-family home, opened commercial zones to multifamily and mixed-use development, prohibited local governments from adopting excessively restrictive building codes, and banned rent control.

The centerpiece of the reforms is the Montana Land Use Planning Act, which Bloomberg called “a YIMBY omnibus package the likes of which few blue states would dare to consider.” Under the law, municipalities must adopt comprehensive land-use plans that conform to the state’s new pro-housing policies. Once those plans are in place, projects that comply with them can proceed by right—without the lengthy discretionary approval processes that often stall housing construction.

The approach effectively shifts the timing of public participation. Instead of fighting over every individual housing proposal, residents participate in shaping the broader land-use plan. After that, NIMBY opponents cannot derail individual projects that are consistent with the publicly approved plan.

Not surprisingly, the reforms faced legal challenges. A group called Montanans Against Irresponsible Densification (MAID) argued that the laws violated equal-protection guarantees and due-process rights by overriding local zoning restrictions. A district court initially issued a preliminary injunction freezing the duplex and ADU laws—though the Montana Supreme Court reversed that injunction—and later struck down the Montana Land Use Planning Act’s public-participation provisions.

In March, the Montana Supreme Court ultimately rejected MAID’s arguments. The group claimed that the laws unfairly discriminated between homeowners covered by private restrictive covenants—which can still prohibit duplexes and ADUs—and those who are not. But the court concluded that homeowners governed by such covenants are not “similarly situated” to those without them, since the restrictions arise from private agreements rather than state law.

The court also rejected the claim that the reforms violate the Montana Constitution’s right to citizen participation. While the laws streamline approvals for projects consistent with adopted land-use plans, the justices argued that “the public already has participated materially through input during the earlier stages of the comprehensive planning process.” And projects that deviate from those plans remain subject to public notice and discretionary review.

The ruling preserves what many consider to be one of the most ambitious packages of housing deregulation in the country—one that other states have struggled to replicate. California has been fighting these battles for decades with limited results. Texas has been widely praised in pro-housing circles for allowing multifamily development in commercial districts. Montana’s reforms go considerably further.

None of it came easily. But supporters ultimately assembled an unusual left-right coalition. Progressives worried that rising housing costs would push development into surrounding landscapes, increasing sprawl and environmental pressures. Conservatives framed the issue around property rights, asking why local governments should dictate what homeowners can build on their own land. In a state where rapid population growth had left many residents, as one observer put it, “scared to death that we’re going to be California,” that combination proved politically potent.

It’s too early to measure the full impact of these reforms. But there are signs that they are beginning to reshape local planning. Missoula recently adopted a new land-use plan and zoning code that allows apartments in most of the city and permits triplexes through sixplexes in nearly two-thirds of residential districts—a major shift for a city where most residential land had previously been limited to single-family homes.

Meanwhile, state lawmakers continue to build on the 2023 reforms. In 2025, Montana’s legislature expanded its housing reforms by allowing taller buildings, limiting excessive impact fees, equalizing treatment for manufactured homes, permitting single-stair mid-rise construction, and restricting parking mandates—all designed to reduce development costs.

While many states remain stuck in political gridlock over zoning reform, Montana has moved aggressively to expand housing opportunity. Yet threats remain: opponents have already sought backdoor workarounds, including a Bozeman ballot initiative that tried to use water-adequacy rules to impose the kind of restrictions on new development that zoning law no longer permits. Voters rejected it. If Montana continues to hold the line, other states searching for solutions to their own housing crises will be looking to Big Sky Country for answers.