EPS Study

The City of Bozeman recently retained Economic Planning Systems (EPS) to look at the Water Adequacy for Residential Development (WARD) initiative’s requirement that a residential development of three or more units seeking to meet its water demand using the City’s cash-in-lieu of water rights provide 33% of the homes at affordable rates. EPS’ analysis includes what the 33% requirement would do to a project attempting to be built in the current market.

According to the study, a 30-unit single-family home market-rate development without affordability requirements could make a 10% profit in today’s market. With WARD in effect, that same development may lose $25,000 per home, for a total loss of 4%. The model also looked at a 90-unit apartment complex. According to the report, such developments are not currently feasible in today’s market without affordability requirements, and WARD increases the funding needed to make a profit by $2.6 million.

View the slide deck report in the documents section of the website. You can also watch their City Commission presentation here.