Number of strategies rise to top

The task force charged with creating the Whitefish Strategic Housing Plan has narrowed its sights on a few potential solutions for creating affordable workforce housing.

The task force held a workshop last week at City Hall to get public input and introduce potions of the draft plan as it prepares to release its final plan to the public next month and to the city in November for eventual adoption. Options for more immediate solutions range from using city land for housing to zoning code changes, and looking at funding options to assist in creating housing.

The task force — a group made up of city and Whitefish Chamber of Commerce representatives, community members and business owners — has been working to create the housing plan that is expected to assist with increasing the production of affordable workforce housing over the next five to 10 years.

Mayor John Muhlfeld said that the city’s workforce is being forced to live outside Whitefish and that’s a trend that leaders are hoping to change.

“Our community is strong because of the diverse fabric — our service workers, our teachers, firefighters, police officers, our doctors, attorneys, and small business owners,” he said. “But you don’t have to look too far away to find places that were once like Whitefish, now left with the inevitable outcome because they chose to do nothing.”

An assessment completed last year showed 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 the future. The same assessment showed that the affordable range for the workforce is homes priced between $160,000 and $310,000 for households earning between $40,000 and $75,000 per year. A market report by Kelley Appraisal in July showed that the median home price in Whitefish this year was sitting at $334,500.

Melanie Rees, one of the consultants hired by the city and the chamber to develop the housing plan, said the question is often asked, “why can’t the housing market naturally provide a solution?”

“The market is an important part of the solution,” she said. “We expect the market to produce 400 of the 1,000 homes, but it’s not enough. Whitefish is a high-cost town where the prices have been driven up by those who don’t work here — by second homeowners.”

The top priority areas identified as potential solutions, include, development of the city’s snow lot for affordable housing, inclusionary zoning, resort tax, changes to the annexation policy, voluntary assessment, home buyer assistance, public land development for affordable housing, and complimentary initiatives. The task force hopes that work could begin on implementing some items on the list as early as by the end of this year, and work could begin on many more in 2018.

City Manager Adam Hammatt cautioned that there is still an extensive process to be worked through before many of the priorities can be implemented and details to be hammered out on the individual tools proposed.

“I know there is a lot of questions,” Hammatt said. “There is still a lot more work that needs to be done before we get to a final product, but this is going to be an open process — we are going to have open meetings and work sessions.”

The development of the snow lot for affordable housing is being brought forward as one of the priorities. The 1.6-acre site is considered a good candidate for affordable housing because its location east of Whitefish Middle School makes it close to downtown and walkable for most services.

“It’s a city-owned property that can contribute to the solution,” Muhlfeld, who also serves on the task force, explained. “The cost of land is driving up costs for development and this could be a solution.”

There is also the potential for using other public lands to create public-private partnerships for affordable housing projects, the task force notes.

Second on the list presented was inclusionary zoning that would require new subdivisions to provide 25 percent of the development for affordable housing for moderate and middle income residents.

Under the current incentive based program, the city provides bonus densities to developers who elect to build up to 10 percent of the housing units in a subdivision as deed restricted, or provide cash in-lieu for affordable housing. The city says the program has only resulted in a half dozen homes over the last 15 years.

Muhlfeld said the incentive-based program is not working.

“This would be a big shift in thinking for the city,” Muhlfeld said of a potential new policy. “It would require an ordinance and a policy change for development.”

Changes to the city annexation policy are also on the list of potential solutions. The city could require as part of annexation into the city that a certain percentage of homes in a development be maintained for local residents through deed restrictions.

Task force member and City Councilor Katie Williams said a change to the policy is a way to reverse the trend of more second homes being developed here.

“This is a way to preserve our community and fill our schools,” she said.

A few items made the list as ways to generate funding for potential projects.

Willa Williford, one of the consultants working on the plan, explained that costs are often a barrier for developers when it comes to creating affordable housing. She gave a hypothetical example of a market rate home versus a workforce home constructed with some type of assistance to cover a portion of the construction costs incurred by the builder. A market rate home sold at $450,000 might result in a $50,000 profit for the builder, while the same home sold for workforce housing at $300,000 would likely result in a loss of $100,000. However, if funding sources are provided to cover some of the cost, the house could be sold at the affordable rate with no loss to the builder.

“Workforce housing is not profitable,” she said. “We have to create incentives so while that it might not become profitable at least it won’t lose money.”

A change to the city’s resort tax is also proposed as a potential solution for providing cash for the creation of affordable housing projects. The city currently collects about $3.5 million annually from its 3 percent resort tax and that money goes to property tax relief, parks and street projects and pays the city’s portion of the Haskill Basin conservation easement.

Voters in 2025 will have to vote to reauthorize the resort tax and the city could look to change the way it allocates the funds collected sending some of it to affordable housing, according to the task force.

A voluntary assessment is also being considered as a way to generate revenue by allowing businesses who want to contribute to add a 1 percent fee onto transactions that would then go to affordable housing. The voluntary assessment would be similar to the fee collected by members of the Whitefish Convention and Visitors Bureau that is used for promoting Whitefish.

In addition, the task force is interested in creating a homebuyer assistance program that might enhance existing programs including the Whitefish Housing Authority.

A few areas of complementary initiatives that may assist with solutions were also highlighted.

One initiative being considered is looking to enforce the city’s short-term rental regulations to ensure that those operating an Airbnb-style rentals are doing so legally. Short term rentals can take away from housing stock for long-term rentals, the task force has noted.

“There are areas in Whitefish where you can have short-term rentals and some that can’t,” Hammatt explained. “We want to ensure compliance.”

The city’s current tax increment finance district sunsets in 2020, and city could create another such district focused on generating tax dollars to support affordable housing.

“We are looking at creating a couple of other TIFs,” Hammatt said. “TIFs are a great tool and they are used around the country for financing all sorts of construction projects.”

In the last few years the city and chamber put a higher priority on finding solutions for affordable housing in Whitefish. The work began with the needs assessment and is following up with the strategic plan for how to address the housing shortage.

For more information, call the chamber at 862-3501 or visit www.whitefishhousing.com.