City looks at program to require affordable units in new development

A draft program aimed at providing more affordable workforce housing in Whitefish could implement mandatory inclusionary zoning for the city.

Under inclusionary zoning, a certain portion of new developments or construction must be set aside for affordable housing. The draft plan is calling for 20 percent of total development projects to be deed restricted as affordable.

City Manager Adam Hammatt said the city is looking at many ways to provide affordable housing for Whitefish.

“We’re hoping to provide housing for the hard working people who want to live here,” Hammatt said, like the teachers, firefighters, police officers and city workers.

Hammatt said while the city is still working on the details of what an inclusionary zoning program will eventually look like, it’s important to push toward finding solutions to create housing.

“We know we are at a critical mass in the way that we need housing,” he said. “We know that we can’t continue in the same thing we’re doing because we won’t get anywhere. If we’re unwilling to do this, we are going to languish.”

Whitefish City Council, the Planning Board and Whitefish Strategic Housing Plan steering committee last month held a joint session to take a look at the draft program, being called the Whitefish Legacy Homes Program, as the city continues to work on the details.

Following the work session, Council said it needed more information on the inclusionary zoning draft regulations before providing input. Council, along with the Planning Board, will meet with the steering committee meeting on Thursday, Oct. 11 at 6 p.m. to further discuss the issue.

Eventually, any changes to city regulations would have to go before the Planning Board and then City Council for a vote.

Under the draft program, minor and major subdivisions, residential planned unit developments and residential conditional use permit projects would be subject to the requirement of providing 20 percent of the projects as affordable housing.

The area median income for Flathead County, according to the city, for a two-person household is $48,400. This is also referred to as 100 percent area median income. The industry standard for affordable housing is that it should not be more than 30 percent of the owner or renter’s annual income.

Based upon this and needs identified in the workforce housing needs assessment, the proposed program would seek to create both rental and ownership units.

The rental units would seek to serve 60 percent to 80 percent of area median income or rents averaging about $935 per month. Ownership units would seek to serve 80 percent to 120 percent of area median income with a average unit cost of $209,400.

Ben Davis, chair of the city’s Strategic Housing Plan steering committee, explained that the deed restricted rentals and homes would remain affordable in perpetuity though the Whitefish Housing Authority. He said that developers would be able to designate whether the units are rentals or for ownership.

“We want to try to stay away from requiring them to provide rental or ownership and let them decide what is appropriate for the development,” he said.

As an off-set for providing deed-restricted housing as part of a market-rate development, the program would offer a list of incentives aimed at reducing certain development standards. Incentive categories include — reduce parking requirements, reduce building setbacks, increase building heights, increase density, increase percent of the maximum lot coverage, reduce minimum lot size, and increase the impervious area that triggers the requirement for an engineered stormwater plan. Some alternatives would also be provided, according to the draft plan, that would allow for in-lieu fees or off-site development of affordable housing under certain situations.

“We’ve looked at many programs and we felt providing incentives for the developers was important,” Davis said.

In addition, the committee working on inclusionary zoning is considering a streamline process that would allow for approval of some smaller projects.

Planning Director Dave Taylor acknowledged that inclusionary zoning, if approved, would be a large change for Whitefish. He said the city may not see as many planned unit development projects as a result.

“There is some concern that with the land costs being less in Columbia Falls and Kalispell we might see a drop in subdivisions,” he said. “On the other hand Whitefish is a desirable place to live.”

Already those connected with the development community are expressing concerns about the potential regulations saying they unfairly burden those bringing projects forward for development.

During public comment, Dev Warren said it’s unfair to have the market value homes cover the cost of the affordable homes in a development.

“It would be better to have a program that helps people find housing rather than adjusting the market,” he said.

Bill Goldberg, of Compass Construction, said he had one project on the Whitefish River that if the inclusionary zoning would have been in place he couldn’t have “even come close to making a profit.”

“I was shocked that this is a citywide program,” he said. “This is not going to work in all zones, but I also understand that we need it.”

Aaron Wallace, with Montana Creative, said a lot unknowns remain with the proposed inclusionary zoning. He asked the city to apply the regulations to as sample property so that developers could get an idea of how the changes would look.

“This has to be vetted,” he said. “We don’t even know how those benefits will work. Will they kill projects? We don’t know how much money there is to be made on a project without going through the process.”

Inclusionary zoning is part of several initiatives called out for in Whitefish’s strategic housing plan.

A housing needs study conducted in 2016 followed by the strategic housing plan completed the next year showed that roughly 900 residential units are needed to accommodate employee households through 2020 in Whitefish. About 56 percent of Whitefish’s workforce commutes into town for work, and 34 percent of those workers say they would prefer to live in Whitefish, according to the assessment.