Billings City Council Adopts 20-Year Plan Targeting 16,200 New Housing Units

The Billings City Council is implementing sweeping changes to home-building approvals under the Montana Land Use Planning Act, a state-mandated overhaul that requires the city to adopt a 20-year growth plan by May 17 and new zoning rules effective July 1. The regulations aim to address a severe housing shortage that city planners say needs 16,200 new units by 2045 to meet demand.

City planning staff have presented the draft 'Billings 2045' land-use plan, which projects a current deficit of 10,000 units and recommends allowing single-family homes and duplexes in suburban residential areas. The plan includes lot size flexibility in new subdivisions, a measure officials say could increase single-family home construction by 33% by enabling development on smaller lots.

Funding for affordable projects

The Council has approved $1.545 million in HOME and Community Development Block Grant gap financing for the 101-unit LB Lofts affordable housing project in Billings Heights. Separately, it approved $1.4 million for an affordable complex using repurposed man-camp trailers, with construction expected to start in May 2026. These projects are part of the city's Affordable Housing Development Program, which relies on federal grants to subsidize construction.

Billings faces a shortfall of at least 1,300 units annually, with less than half of demand being met. The deficit is especially acute for low-income households: more than 4,700 units are needed for those earning less than 30% of the Area Median Income. The new zoning rules and funding initiatives are designed to accelerate production across all price points.

What it means for residents

For Billings residents, the changes could mean more housing options in established neighborhoods as duplexes and smaller-lot homes become permissible in suburban zones. The 20-year plan is intended to coordinate growth with infrastructure, though specific timelines for road, school and utility upgrades will depend on subsequent council decisions and state funding. The city's use of lot size flexibility aims to make construction cheaper and faster for developers, potentially reducing costs for buyers and renters.

The City Council will continue to review the 'Billings 2045' plan through public hearings before the May 17 deadline, with the new zoning code taking effect July 1. Additional applications for gap financing and subdivision approvals are expected as the city works to close the housing gap.