Construction activity continues at torrid pace

By RON TSCHIDA, Bozeman Daily Chronicle Staff Writer
16 August 2004

Construction in Bozeman is continuing at a record pace.

For the fiscal year that ended June 30, the city of Bozeman issued permits for 687 residential units, compared to 584 units the prior year, according to building department reports. That's an 18 percent increase.

Nearly 60 percent of new residential units were in multi-family buildings including duplexes, triplexes and larger buildings.

"A lot of it is because of the way the lots have been created in the (new) subdivisions," said Neil Poulsen, the city's chief building official. "The (city) commissioners have required a mix of uses in the subdivisions."

Developers are required to create lots for multi-family housing, but that doesn't mean builders have to construct such properties. City zoning rules designate the maximum number of homes per lot, not the minimum, Poulsen said.

And there was some concern that the large lots would be "under built" -- wealthy individuals would buy a big lot designated for multi-family dwellings but put a huge single-family home on the property.

"I haven't seen that at all," Poulsen said. Instead developers are building more units to get the most value from every square foot of land. "They maximize. They build right to the setback."

Three factors are driving the trend toward more multi-family housing, said Dennis Erickson, a broker-owner at Re/Max Realty Group in Bozeman.

High land costs here encourage high-density development. And builders make more money on town-home construction, where each unit can be marketed to a separate buyer.

"The third thing is I think there's a pretty good demand for that kind of a thing all of a sudden," Erickson said.

There are "move-down" buyers -- often aging baby boomers looking for a less expensive and easier-to-maintain home. And Bozeman has a strong market for second-home buyers.

"They're looking for these because they don't have to worry about lawn maintenance or snow removal during the months that they're gone," Erickson said. "Usually there's an association that takes care of that."

The total value of single-family home construction increased to $49.8 million during the latest fiscal year, from $46.6 million the year before.

Duplex and other multi-family construction totaled $35 million, up from $23.8 million a year earlier.

Commercial construction also is continuing strong, said Michael Cash, who tracks statistics for the building department. General, nonresidential building permits were valued at $26.8 million in the latest fiscal year, compared to $22 million the year before.

The value of commercial additions and remodeling dropped by 50 percent from 2003 to 2004, but that doesn't give a true picture of activity, Cash said.

That's because Wal-Mart alone accounted for nearly half the value of commercial additions last year. The number of commercial additions and remodeling projects actually increased slightly, from 155 to 162 the year before.

"It has definitely been busier, both residential and commercial," Cash said. "Residentially, the west end of town has just exploded."