Affordable workforce housing approaching 'crisis'

The scarcity of affordable housing for Whitefish’s workforce has hit a tipping point that may require an intervention in the form of mandatory inclusionary zoning or even a special levy.

Business leaders, city officials and concerned residents tossed around these ideas and many others last week at a summit aimed at finding remedies to the affordable housing issue in Whitefish that could get worse before it gets better.

“Our affordable housing shortage in Whitefish is approaching a crisis,” said Kevin Gartland, Whitefish Chamber of Commerce executive director. “We’ve got two hotels going up, two more in the works and we can’t even keep hotel employees around right now.”

“It’s a problem that’s coming home to roost,” he added.

Guest speakers at the summit painted a bleak picture of the shortage and its impacts.

Seasonal workers are left grappling over an insufficient stock of rentals, while homeownership remains an unlikely scenario for young professionals looking to enter a market that rises above the average household income. The result is a deficit of workers for the thousands of service jobs that motor Whitefish’s tourist-based economy, while professionals are forced to commute from outside of the community where they work.

Without these workers living in town, Mayor John Muhlfeld said, Whitefish won’t be the same community that makes it an attractive place to call home in the first place.

“We enjoy going down to the Buffalo Cafe and eating breakfast next to an attorney and sitting next to a construction worker that built that attorney’s home,” Muhlfeld said. “The folks that dish up our food are our neighbors.”

Monthly housing costs for Whitefish renters has climbed to about $812, well above the state average of $682, according to information presented by community planner Bob Horne of Applied Communications. For homeowners, the situation is even more dire with the average monthly housing cost topping out at $1,235 when the state average is $828.

Horne noted that while housing costs are above the state average, the median Whitefish income of $44,988 falls below the mark. In fact, more than half of Whitefish of residents shell out 30 percent or more of their household income for housing.

Muhlfeld described the housing affordability gap that has widened since he moved to town 20 years ago.

When he arrived in 1995, he rented a three bedroom house in town for $450 a month — easily affordable on a minimum wage job. Muhlfeld purchased his first home — a two bedroom, one bath place on Somers Avenue — a few years later for $68,000. Today, he said, that same home would sell for $245,000.

“We’re slowing seeing the gap between affordability and what we’re able to spend on housing widening,” he said.

With housing costs outpacing the county and state averages, it’s quickly becoming more difficult to recruit workers to town, said Dan Graves, Whitefish Mountain Resort president.

“The resort struggled all summer with openings,” Graves said. “A large part of it was that there wasn’t enough workers and where do they live?”

The lodging and food service industries alone employee more than 1,000 workers in Whitefish, representing by far the largest sector of the city’s workforce.

Lori Collins, director of the Whitefish Housing Authority, notes that a service worker — earning an average salary of $17,000 — would struggle to find housing here.

“They can’t even afford $400 a month in rent,” she said.

But it’s not just the seasonal workforce facing these housing struggles, she added. A construction worker making $40,000 annually could afford $816 in rent or a mortgage.

“I haven’t see one of those on the market in a long time,” Collins said.

“These are the challenges we face.”

Roundtable discussions at the summit produced a variety of possible solutions to turn back the affordable housing shortage.

Most agreed that it’s time Whitefish considers mandatory inclusionary zoning, where developers are required to provide a certain number of affordable units.

Currently, the city has a voluntary program with incentives for developers to building affordable units. Under the voluntary program, a developer receives a density bonus as high as 50 percent when a certain percentage of units is set aside for affordable housing. Developers also have the option of providing cash-in-lieu of the affordable units.

City Manager Chuck Stearns is quick to note that the city has yet to have a developer utilize the incentive. He said a few factors have played into this, including dips in the economy and neighborhood opposition to projects that have come forward.

“And voluntary is exactly that — voluntary,” he said.

With the high property values in Whitefish, one group suggested using tax-increment funds to purchase blighted property for redevelopment into affordable housing.

Stearns said there will be up to $4 million available in tax-increment funds by the time the program sunsets in 2020.

Erin Falcon, executive director for Habitat for Humanity of Flathead Valley, said a reduction in impact fees for affordable projects would go a long way, as well.

“It circles back to the price of land,” she said of why its so difficult for affordable project to take root in Whitefish.

A mill levy increase was another tool suggested for aiding with land purchases.

“The [Whitefish] mill levy limit is not met,” said Kellie Danielson of Montana West Economic Development. “That is a way communities are solving the issue.”

Increasing funding for groups like the Whitefish Housing Authority so they have the resources available to pursue more grant opportunities, also was suggested.

One group suggested that local resorts, hotels and restaurants team up to develop an “Olympic village” style housing complex for seasonal workers.

Ultimately, it was decided to form a task force led by the Whitefish Chamber that will continue searching for solutions. Already, about eight people have agreed to join the group, including representatives from the city, nonprofits, and the private sector.

Gartland said it makes sense for the Chamber to take the lead on finding a solution.

“It’s a workforce problem and a business problem,” he said.

“I just don’t want to keep kicking the can down the road.”