Whitefish adopts affordable housing program

Most new developments in Whitefish will now have to include affordable workforce housing.

Years in the making, Whitefish City Council Monday night unanimously approved the Legacy Homes Program in a pointed effort to address a lack of affordable housing here that has previoiusly been termed a crisis.

Using inclusionary zoningto link the production of affordable housing to the production of market-rate housing, the program requires that 20 percent of all new developments be set aside as deed-restricted affordable housing, while at the same time creating incentives for developers designed to offset the cost of creating such housing.

Recalling that the issue was first brought up at least more than two decades ago, Councilor Andy Feury said “this is not a new issue and we’re finally getting around to dealing with it.” He said the city could have seen roughly 160 affordable units created in 2016 if the program had already been adopted.

“We lost by not having anything in place and we’re losing our community in the meantime,” he said. “It’s just time as a community that we buck up and do something. It would be sad if we don’t do anything now and in five or 10 years from now we lose our community.”

Whitefish Housing Authority Chairman Ben Davis said the housing authority is invested in making sure the Legacy Homes Program runs smoothly.

“This program is the right thing to do for our community,” he said. “We’ve learned that we can’t wait for this problem to get really bad to solve it. Predictions show that Whitefish is only going to grow.”

During public comment, Grete Gansuare said the program would create a longterm solution to a lack of affordable housing.

“For too long we’ve been trading off the affordable housing issue in our community,” she said. “The business model of land developers does not cater to the local workforce. The market has created this issue and it’s time to regulate it.”

The program applies to residential conditional use permits, planned unit developments and subdivisions requiring such developments to provide affordable housing units. Residential units allowed by right would be exempt.

As an offset for providing affordable housing as part of a market-rate development, the program offers a list of incentives that effectively reduce certain development standards depending upon the type of development.

During public comments, concerns were brought up that the program might not be ready for implementation primarily because some felt it doesn’t offer enough protection for preserving the character of existing neighborhoods.

Rhonda Fitzgerald said while she supports 90 percent of the plan, she worries about the impact this could have in historic neighborhoods. She said that some of the incentives designed to offset the cost for developers, for example allowing an extra 5-feet in building height, would make it feasible to develop in neighborhoods that previously it didn’t make financial sense to do so.

“If you allow the increase in height you will get three-story homes in neighborhoods that have one or one-and-a-half story homes,” she said. “The compatibility in existing historic neighborhoods is an issue.”

Councilor Frank Sweeney said he too had reservations worrying that the program would impact historic neighborhoods.

“How do we address the disparity in structural changes from new development?” he asked. “How do neighbors protect themselves from having an apartment looking down into their backyard.”

Davis, who also chairs the city’s Strategic Housing Steering Committee, said those who created the plan acknowledge that it’s not perfect and expect it to change as needs in the community change.

“Neighborhood compatibility for single-family homes in high density zones is a problem that exists today and while the concern is valid it’s not part of this zoning code change,” Davis said. “Inclusionary zoning requires more projects go through the condition use permit review than they do today.”

Other Councilors too said the program still needs work.

Feury said the areas of concern — homes in areas zoned WR4 and WR3 — is relatively small and could still be addressed.

“We’re talking about a limited area — it’s not community wide devastation,” he said. “We’re not going to hold the rest of the community hostage for a small area.”

Planning Director Dave Taylor noted that Council at its next meeting on June 1 is set to consider an amendment to zoning code that would provide protection to neighborhoods regarding the design of new housing. The amendment provides development standards for multifamily developments, as well as mixed-use and nonresidential developments, for a number of areas including neighborhood scale and compatibility.

Under the new program, a housing mitigation plan is required as part of the development permit application, and would detail how the development meets the requirements of the program including requirements that affordable housing units be compatible with and interspersed in the surrounding development of market-rate units, along with a bedroom mix that would align with the other units. All affordable units would be deed-restricted in perpetuity.

The developer would be expected to provide deed-restricted affordable units on site or pay a fee in lieu of the units. Some exceptions are provided when affordable units could be developed off-site.

Incentives that developers could use as an offset for providing affordable housing include reducing some parking requirements by 20 percent, increase building heights by 5 feet, increase density by 20 percent, increase percent maximum lot coverage by 10 percent, reducing the minimum lot size by 20 percent and reducing the minimum lot width by 10 percent.

As part of the program, the city is creating an administrative conditional use permit for smaller projects that could be approved by city planning staff without going before the Planning Board or City Council. Council on Monday voted to extend the notification for neighbors of such projects to a range of 300 feet.

It is also lowering the threshold for when a CUP would be required in multifamily zones, Taylor noted, saying that the city is adding additional layers of review for projects.

The Legacy Homes Program looks to create housing designed for moderate income households. Those in the 60 percent to 80 percent of area median income range would qualify for rental units, and those at 80 percent to 120 percent of area median income would qualify for ownership units. Flathead County’s area median income for a two-person household is $53,4000, and is also referred to as 100 percent area median income.

Currently the average price for a house sold in the 59937 ZIP code is $676,663, according to the city, meaning that to afford the average house here and income of 291 percent of AMI or $155,444 per year is required.

The city’s 2007 growth policy identified the lack of affordable housing within the city as an issue and set a goal of ensuring an adequate supply and variety of housing product types and densities, at affordable prices, to meet the needs of the city’s existing and future workforce.

A housing needs assessment three years ago confirmed that Whitefish was in desperate need of affordable housing and called for the creation of 980 residential units here by 2020. The document said that 62 percent of those units should be at more affordable prices, and the subsequent Whitefish Strategic Housing Plan put the onus on the city to ensure the creation of affordable workforce housing.

Whitefish has for many years had a voluntary inclusionary zoning program that allows for a density bonus through a planned unit development for providing affordable housing, but that has only resulted in eight units.

In Montana, Bozeman is the only other city with inclusionary zoning, which it implemented in 2017.

According to a report by the nonprofit Lincoln Institute of Land Policy, in 2017 there were roughly 880 jurisdictions in the United Sates with inclusionary housing programs located in 25 states and the District of Columbia.