How Billings New Zoning Code Affects Buyers and Investors

Billings has a new zoning code. Ordinance 26-5930 took effect on July 1, 2026, and the version in force before that date is now formally the archived zoning code. If you are buying, selling or developing here, this article focuses on the three provisions most likely to affect a residential or small investment transaction: accessory dwelling units, planned developments, and the transitional rules for permits and applications already in motion.

What follows is drawn from the adopted ordinance and from Montana statute. Where a claim depends on a specific parcel or a specific code section, I say so and point you at the office that can confirm it.

What Ordinance 26-5930 actually did

The ordinance amends Articles 27-200, 27-400, 27-800, 27-1000, 27-1300, 27-1500, 27-1600 and 27-1800 of Chapter 27 to conform the city code to the Montana Land Use Planning Act, which the Montana Legislature enacted in 2023 and revised in 2025. Section 1 states plainly that any sections not amended remain in effect. This is a substantial amendment aligning Billings with state law, not a ground-up rewrite of every rule.

Section 27-105 sets the effective date at July 1, 2026 and provides that the code in effect immediately before that date is retained as the archived zoning code, with copies held by the planning division and the city clerk. That archived code still matters, and the Planned Development section below explains why.

The public record: the Interim Planning Commission held hearings on April 29 and May 7, 2026 and recommended adoption. City Council held its public hearing on May 11, 2026. The adopted ordinance is posted with the 2026 City of Billings ordinances.

Accessory dwelling units: the clearest opportunity for investors

Section 27-1008.G is one of the most relevant provisions for small residential investors. The adopted standards:

• Where they are allowed. An ADU is permitted on any parcel where a single dwelling unit is permitted or currently exists.
• Lot size. The minimum lot size for a lot carrying both a primary dwelling and an ADU is 3,000 square feet.
• How many. One ADU per residential lot, on the same lot as the primary unit.
• Size. An attached or internal ADU may not exceed the gross floor area of the primary dwelling. The Billings cap is 80 percent of the principal dwelling gross floor area or 1,000 square feet, whichever is less. Montana law uses 75 percent for attached and detached units, but MCA 76-2-345(8) provides that nothing in the section prohibits a municipality from adopting more permissive regulations, so the city figure is the one that applies here. Confirm the measurement method for your design with Planning.
• Form. It can be built inside the house, added onto the house, added onto a garage or other accessory structure, or built detached.
• Converting what is already there. An existing accessory structure whose height or setbacks do not meet the requirements for a dwelling in that district may still be converted into an ADU, provided the work does not increase the degree of nonconformity. That is a meaningful allowance on older lots with an existing garage or shop.
• What it must contain. A kitchen or food prep area, a bathroom and a sleeping area for the sole use of the unit. Water and sewer service is required; the principal and accessory units may share utilities.
• What cannot be one. Mobile homes, recreational vehicles, travel trailers and any other wheeled or transportable structure.
• Other requirements. A separate entrance with a clearly labeled street address, and a new street address for emergency response. A house with an incorporated ADU may not create additional entrances facing the same street.
• Ownership. The ADU cannot be sold separately or subdivided from the primary dwelling or lot.
• Home occupations are permitted in an ADU.

Outside of what the section specifically addresses, an ADU is subject to the dimensional regulations of the underlying zone district, including setbacks, yards and building coverage. So the district still governs where the structure can physically sit.

Montana law sits underneath all of this. MCA 76-2-345 requires municipalities to allow at least one ADU by right on a lot containing a single-family dwelling, permits attached, detached and internal configurations, and bars a municipality from requiring additional parking for the ADU or requiring it to match the primary dwelling exterior design, roof pitch or finishing materials. Building codes, fire codes and public health and safety regulations still apply, and a municipality may require a will-serve letter from municipal water and sewer.

What this does not override: private covenants. An HOA or a recorded restrictive covenant can prohibit an ADU on a lot where the city and the state both allow one. Read the covenants before you write the offer.

If the property is in a Planned Development, read this before you write an offer

Section 27-107.D is the provision most likely to surprise a buyer. Any planned development identified on the zoning map and approved before July 1, 2026 remains valid. Where a PD refers to a zone district that is not included in the new code, the archived zoning code requirements apply. The ordinance gives the example of a PD referencing an underlying district of community commercial: the use table, use standards and other requirements for that district come from the archived code.

It also provides that PD and master site plan approvals predating the new code are narrowly interpreted and limited to the specific terms of approval. Where a term was not defined or a process not specified in the approval, the most closely similar provision of the new code applies.

The practical consequence: on a PD parcel, the rules governing what you can build may live in a document that is no longer the city current code. Do not rely on the listing sheet alone. Get the original approval documents and confirm the controlling requirements with the Planning Division.

Approvals and permits that were already in motion

Section 27-107 sets out the transition, and it is more protective than people assume:

• The code does not abrogate or annul any building permit, certificate of occupancy, variance or other lawful permit issued before July 1, 2026.
• Permits and approvals issued under the archived code that were valid on the effective date remain valid until their expiration date, and the project may be carried out under the development standards in effect at the time of approval.
• Where construction started under a building permit validly issued before the effective date, it may be completed under the regulations in effect when the permit was issued, provided construction begins within six months after July 1, 2026 and is then diligently prosecuted to completion. On completion the structure may be occupied for its original designated use even if it is nonconforming under the new code. Note that these are two distinct protections: a validly issued permit remains effective until its own expiration date, and the six month window is an additional transitional allowance for finishing work under the prior standards.
• A complete application submitted before the effective date and pending approval may, at the applicant option, be reviewed wholly under the previous code.
• Projects with no complete application accepted before the effective date are subject to the new code in full.

A use that was legal before may now need special review, and may already be covered

Section 27-107.G is worth knowing if you own income property. If a use was listed as permitted in a district under the previous code, was established on the property before adoption, and is now listed as a special review use in that same district in Table 27-1000.1, the established use is deemed to have received special review approval and is a legal conforming use. On request, and on submission showing the use was established before adoption, the city will provide written confirmation of that legal conforming status.

If you own a property whose use has changed category under the new table, requesting written confirmation can reduce uncertainty before you list, refinance or plan a redevelopment.

What the state requires, separate from the city

Two Montana provisions operate independently of the Billings code and are frequently cited incorrectly.

Duplexes. MCA 76-2-304(3) provides that in a city with a population of at least 5,000, duplex housing must be allowed as a permitted use on a lot where a single-family residence is a permitted use, and that zoning regulations applying to duplex housing may not be more restrictive than those applying to single-family residences. That threshold covers Billings. Note that this is 76-2-304, not 76-25-302; the latter is a menu of housing strategies under the Land Use Planning Act from which a jurisdiction adopts a minimum of five, and it is not itself the duplex mandate.

Coming October 1, 2026. Amendments to 76-2-304 take effect on October 1, 2026. They cap required parking at no more than one space per residential dwelling unit, and no more than one half space for each residential unit under 1,200 square feet. They also bar a height restriction of less than 60 feet on buildings located in downtown commercial, heavy commercial or industrial zones. These are not part of the July 1 city ordinance and are not yet operative as of this writing.

To confirm which districts permit a given residential use on a given parcel, check the current Table 27-1000.1 in the Billings Municipal Code and verify the supplement date, or ask Planning.

Examples from the July 2026 administrative review group

The city grouped three zone change applications under its July 2026 administrative review section. The city page links to a final determination of approval for each. Determination dates and any appeal period are specific to the individual application, so check the record for the one you care about:

• City Zone Change 1085, 423 Kuhlman Drive. Heavy Commercial (CX) to Corridor Mixed Use 2 (CMU2), on a parcel of approximately 10,990 square feet.
• City Zone Change 1086, Poly Drive. Planned Development (PD) to Neighborhood Mixed Use (NMU), on a parcel of approximately 1.404 acres.
• City Zone Change 1087, 724 S 31st, 802 S 31st and 803 S 32nd. First Neighborhood Residential (N1) to Neighborhood Office (NO). Three parcels in Billings Original Townsite.

The Poly Drive application is a useful illustration of why current zoning should be confirmed directly with the city. A parcel previously governed through a Planned Development may later be mapped into a current code district, which changes which provisions you need to read.

Current filings, including determinations and the comment deadlines attached to each review cycle, are posted on the city Current Zoning Applications page. Deadlines are specific to the application and the review batch, so read the header on the section your property sits under rather than assuming a date applies across the page.

How to check a specific parcel

1. Get the current zoning designation from the official zoning map. Under section 27-202, the official map is the controlling version and is held by the planning division and the city clerk. Online copies are convenience copies.
2. Check whether the parcel sits in a Planned Development. If it does, request the original approval documents.
3. Check the Current Zoning Applications page for any pending or recently determined change affecting the parcel or the ones around it.
4. Read the covenants. They can restrict what the code allows.
5. Confirm the intended use with the City-County Planning Department before it becomes a condition you have already waived.

General zoning information is on the city website. For parcel-specific guidance, start with the Planning Division and request written confirmation when the intended use or the controlling code is unclear.

Frequently asked questions

When did the new Billings zoning code take effect?

July 1, 2026, under Ordinance 26-5930. Section 27-105 also provides that the code in effect immediately before that date is retained as the archived zoning code.

Can I build an accessory dwelling unit on my Billings lot?

Section 27-1008.G permits one accessory dwelling unit on any parcel where a single dwelling unit is permitted or currently exists, with a minimum lot size of 3,000 square feet for a lot carrying both units. It may be internal, attached or detached. The Billings cap is 80 percent of the principal dwelling gross floor area or 1,000 square feet, whichever is less, and an attached or internal unit may not exceed the primary dwelling gross floor area. Montana law uses a 75 percent figure for attached and detached units, but MCA 76-2-345(8) allows a municipality to be more permissive, so the Billings figure governs here. The underlying district setback, yard and coverage rules still apply, and private covenants can prohibit an ADU even where the code permits one. Confirm your specific parcel with the Planning Division.

Does Montana require Billings to allow duplexes?

MCA 76-2-304(3) requires cities of at least 5,000 residents to allow duplex housing as a permitted use on lots where a single-family residence is permitted, and prohibits zoning regulations for duplexes that are more restrictive than those for single-family residences. Which specific Billings districts permit one- and two-unit dwellings is set by Table 27-1000.1 in the current municipal code, which should be checked against its supplement date.

I am buying a property in a Planned Development. Which rules apply?

Planned developments approved before July 1, 2026 remain valid. Where the PD refers to a zone district not included in the new code, the archived zoning code requirements apply to that district. Approvals predating the new code are narrowly interpreted and limited to their specific terms. Get the original approval documents and confirm with Planning.

I pulled a building permit before July 1. Do I have to start over?

Not automatically, but the protection has conditions. A permit validly issued before July 1, 2026 is not annulled by the new code and remains effective until its own expiration date. Separately, a project may be completed under the regulations in effect when the permit was issued if construction begins within six months after July 1, 2026 and is then diligently prosecuted to completion. Confirm your specific timeline with the city.

My rental use is now listed as special review. Is it still legal?

Section 27-107.G provides that if the use was permitted in that district under the previous code, was established on the property before the new code was adopted, and is now a special review use in the same district, it is deemed to have special review approval and is a legal conforming use. You can request written confirmation from the city.

Before you rely on any of this

This article provides general real estate information and is not legal, architectural, engineering or zoning advice. Zoning and development feasibility depend on the specific property, the current regulations, permits, utilities and private restrictions. Confirm an intended use with the City of Billings Planning Division and the appropriate licensed professionals before relying on it in a purchase or development decision.

Gene Hauck
Montana Real Estate Broker, REALTOR®
The Morales Group at Engel & Völkers Billings
Montana license RRE-BRO-LIC-135399
1921 1st Ave N, Billings, MT 59101
(406) 861-4844

Sources: City of Billings Ordinance 26-5930 (adopted text); Montana Code Annotated 76-2-304 and 76-2-345; City of Billings Current Zoning Applications. Last reviewed and updated September 22, 2026. Zoning code and statute change; verify before relying on any figure or provision here.