Revised plan for snow lot likely makes project viable

Constructing roughly 24 homes on the city’s snow lot to provide affordable workforce housing would likely make the project financially feasible, according to an updated analysis of the proposed project.

The City of Whitefish has for many years targeted its snow lot, at the corner of Railway Street and Columbia Avenue, as a potential site for an affordable housing project.

A first analysis of the project designed with both single family homes and rental apartments completed in December, however, showed that the project would have a large funding gap to make up in order to make the project feasible. The city’s Whitefish Strategic Housing Plan Steering Committee deemed that option financially unfeasible and asked Homeword, a Missoula-based nonprofit taped to help design the project, to return with another option.

Heather McMilin, housing development director for Homeword, presented an updated analysis to the committee last week.

“A home ownership program would work,” McMilin said. “Twenty-four homes on the property will fit. And if you phase the construction and sell the homes as they are completed that would be a big help to the project.”

The plan calls for a total of 24 single-family homes constructed in duplex-style buildings on the property. The construction would be phased in order for home sales to provide cash back into the full project to assist with funding.

The cost estimate is just under $6.5 million for the project. The analysis shows that the city could estimate on having about $5.6 million in revenue from eventual home sales on the property. That would leave the city with a funding gap of about $800,000 to provide to the project.

City Manager Dana Smith said the city has already set aside $250,000 in tax increment finance funds for the project and $575,000 is available in cash in lieu fees for affordable housing that could go toward the project.

“We could look at getting an additional $200,000 from the TIF to add to the project,” Smith said. “It would be reasonable to ask for those funds.”

City Council will still have to approve the project and use of any city money directed toward it. Council, along with the Whitefish Housing Authority Board, is scheduled to hold a work session on the snow lot on March 2 to determine how to move forward.

The analysis of the housing project for the snow lot would look to construct homes for purchase targeted at those earning 80%, 100% and 120% of the area median income.

A four-person household in Flathead County making 100% of area median income is earning $69,600 per year. In the snow lot project, they would be able to purchase a home for about $234,800, according to the project analysis.

The homes are estimated to be about 1,260-square-feet in size.

For the same size household earning 80% at $55,680 they would be able to purchase a home at $187,860. And a household earning 120% at $83,520, they would be able to purchase a home at $281,800.

The industry standard for affordable housing is that it should not be more than 30% of the owner or renter’s annual income.

The committee seemed to agree that the updated project with single family homes appears to be financially viable and plans could be further refined, be a better fit for the neighborhood and also meet the city’s goal of creating affordable workforce housing.

“The simplicity of this new plan make this a completely different option,” Ben Davis, chair of the housing committee, said.

An initial analysis of plans for a project presented in December 2019 that included 12 single family homes for purchase and 23 rental apartments showed the cost to develop the project at about $7.8 million. However, that left up to $3.5 million in a funding gap that the city would have to make up to make it feasible. So, the housing committee asked Homeword in December to reconfigure the project to be designed with single-family homes that would be available as affordable homes for purchase.

A city housing needs study conducted in 2016 followed by a strategic housing plan completed the next year showed that roughly 900 residential units are needed to accommodate employee households through 2020 in Whitefish.

The housing plan identified the snow lot as a place to develop affordable housing.

Council in April 2018 rezoned 1.47 acres of the snow lot to high density multi-family residential to make way for an affordable housing project.