Study says 1,000 housing units needed by 2020

Whitefish needs to add almost 1,000 housing units by 2020 to make up for a current shortage of available workforce housing and plan for future needs, according to a recently released study.

The need for more workforce housing has been on the radar for years, but in the last few years became more of a priority for the Whitefish Chamber of Commerce, which began looking for solutions starting with a needs assessment and plan for how to address the housing shortage.

Results of the study, completed by Rees Consulting of Montrose, Colorado, were announced last Monday during a community meeting. The city of Whitefish paid for the study.

Wendy Sullivan, project manager for the study, pointed to several factors that are impacting the shortage of housing. Those include growth in jobs outpacing the development of new rental units, but at the same time more than half of the jobs are low wage in tourism-related industries, making it difficult for employees to afford housing. In addition, most rentals are short-term leases rented at a premium price during peak summer visitation.

“In the near term it will be important to look at rentals, but don’t ignore affordable houses,” she said of adding housing. “It’s not going to be one solution to deal with the problem — it’s a variety of strategies.”

The study says about 980 housing units are needed to address current workforce housing shortages and keep up with demand. About 605 units should be provided at more affordable prices than supplied by the market to meet the full range of needs of the local workforce, the study says.

Both ownership and rental housing are needed in Whitefish. The study recommends a larger focus on rental units in the near term given prevailing market problems and needs. Of the 980 needed units, about half should be ownership and half rental units.

“Homeownership supports year-round residency and allows residents to invest in and help build a more stable community,” the study notes.

The study points to a number of trends occurring in Whitefish.

A growing economy, rising home prices, scarce rental availability and few homes listed for sale at lower price points, and a shortage of housing at prices that are affordable for the workforce are all part of the issues facing Whitefish, the study notes. The trends are contributing to labor shortages by making it harder for local businesses to compete for and retain workers who are forced to live outside of Whitefish.

About 225 year-round and 140 seasonal jobs remained unfilled in summer 2016. Almost one-third of employers had someone leave their employment or decline a job offer in recent years because they found a job nearer their place of residence.

“Lower-paying service jobs up to mid-management positions are having a problem finding housing,” Sullivan said.

While about 70 percent of homes in the Whitefish area are occupied by locals, recent trends indicate this is changing — residential units occupied by residents dropped between 2000 and 2010, the majority of sales activity is from second/vacation home buyers, and second/vacation homes generate a demand for workforce housing while reducing the supply.

While wages for tourism-related service jobs are higher in Whitefish than the rest of Flathead County, on average, they are still insufficient to make up for the higher housing costs, the study notes.

Roughly half of year-round workers in Whitefish commute in to town for their job. Many workers would prefer to live in the Whitefish area, but can’t afford to either rent or purchase homes in the area, the study says.

Home sale prices have increased nearly 7 percent per year the past several years and rents have increased 10 percent each of the past two years, compared to 2.5 percent for local wages, the study found.

Newer homes for sale are not targeting the local workforce. About 80 percent of local buyers search for homes priced under $300,000, but the median asking price of condominiums is about $400,000 and the median price of newer single family and townhomes is about $450,000.

The study breaks down the needed housing saying about 60 percent of the ownership units should be priced in the affordable range for the workforce. The homes should be priced between $160,000 and $310,000 for households earning between $40,000 and $75,000 per year.

About 360 units, or 62 percent of the rentals needed, should be priced affordable for workforce households earning at or below $40,000 annually.

Whitefish Chamber Director Kevin Gartland said the study was the necessary phase one step to quantify the trends already being observed in Whitefish. He expects the second phase to begin by the end of the year or early 2017.

“Phase 2 will put together community-oriented solutions,” he said. “It will be the nuts and bolts of dealing with the problem.”