inequality and inflation have nothing to do with money supply or interest rates: it’s the land supply.

Montana is the 4th largest US state, at 145,552 square miles, and the 44th largest in population with 1,085,407, 48th in density.

So why is there a housing crisis in Bozeman?

In June, the median sale price for a single-family home in Bozeman – a county of 115,000 inhabitants – was $720,000, up 49% from the same month a year earlier, according to a local realtors’ association. The US census reports the county gained 30,000 new people in the last decade, as the sprawl of new homes and condos for miles can attest.

Those are Seattle prices and Seattle alone has almost as many people as the whole state of Montana.

Schmidt jokes that “low-income” in Bozeman now means anyone who makes less than $70,000 a year. As the city’s unhoused population rises and workers both blue and white collar flee to cheaper towns and other states, it’s hard to not see his logic.

$70,000 a year is what Dan Price at Gravity Payments settled on a starting wage for his employees a few years ago. What jobs pay that in Montana?

“Every week we have calls from people who have been on a month-to-month lease on a property here in Bozeman, and the landlord informs them that they will not be renewing it,” says [Brian] Guyer [,the city’s affordable housing coordinator]. “Those people are finding alternatives, like sleeping in their car. We’re seeing a big increase in the number of urban campers.”

Rentiers are not renewing leases to working people when they can make more renting to wealthy paradise seekers. That’s the landlord’s game, as any one knows who has played Monopoly.

And this is pretty close to what I have been saying about gentrification:

Wealthy people are often trying to “undergo a personal transformation of sorts” when they move west, but they don’t consider how that transforms communities.

“First when very wealthy people move into a place, they bring with them the culture and lifestyle they have. There’s a bar for what they expect in terms of services,” says Farrell.

Thus, a city like Bozeman gets a better variety of restaurants and bars, some better hiking trails and other perks, but when residents are priced out, who can afford to live there and enjoy the amenities? “The underlying structural issues are getting worse and a lot of that is caused by their presence,” says Farrell. — emphasis added

What attracts wealthy paradise seekers is what’s already there…the open spaces and higher buying power. The new bars and high-end restaurants are how the locals pry money out of the newcomers, at the expense of their own workers and ultimately themselves, as their own rents and other costs go up.

Wealth equals power, as Adam Smith reminds us (after Hobbes) and land is wealth, that the more people who have to compete to access to land, to live or work on it will have to pay more (after Henry George).

In Bozeman, Brian Guyer braces for things to get worse before they improve. The city’s affordable housing coordinator himself had to move out of town, 25 miles away to Livingston, when his landlord jacked up his rent.

So what is to be done? Regulate land as a public utility…tax the value of land to return the value created by workers and business owners to the city and make sure land gets used to its highest and best value. If developers want to attract wealthy paradise seekers, they should pay for the productive value of the land they develop. View property or large parcels that could house tens of working families should be taxed based on that value, not sold and held out of productive use with a single large house that lies empty part of the year. By all means, come visit, but remember you are a guest. Seek paradise but don’t think you can own it.

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