Adding more housing sounds good, but is it?

The Whitefish City Council is working to address the housing shortages the city faces in a number of ways, and will now likely point to zone changes they made last week to add more ADUs (Accessory Dwelling Units) as one of their accomplishments. Last week the city approved sweeping zone changes to all residential neighborhoods. These zone changes allow by right (no public hearing required) for each property owner to add a rental unit of up to two stories in height and 600-800 sq ft in size in their backyard.

But hold your applause, while this action will likely add more housing units, it is critically important to first ask three questions: 1) Does this new ADU zoning have provisions to help ensure these ADUs are indeed “affordable”? 2) Does this new ADU zoning have provisions to help ensure these ADUs will provide housing for the local workers, which Whitefish business owners say they desperately need? And 3) What will this zone change mean for your neighborhood?

The short answer to questions one and two is sadly, for the most part, NO. For the third question, the answer is likely more harm than good as currently written. Here’s some background on why this is so and what changes are needed.

First off, the ADUs as approved by the city are what is called in the planning world, “market-rate affordable.” Meaning that if these units were being built in a town that millions of tourists didn’t pass through each year looking for a place to stay, and if Whitefish wasn’t a place everyone across the country was hoping to move to soon, adding more housing units might, though not likely, lead to more rentals. But that’s not Whitefish! The reality is if you can even find a place to rent in Whitefish, rents are increasing sharply and on top of that there is no rent control in Montana to say how much the landlord can raise your rent at any one time.

Some argue that expanding where ADUs are permitted can greatly increase density without disrupting the character of the existing neighborhood, and allow homeowners to give relatives, friends, or others a housing option best suited to their needs. That might be at least partly true had the Whitefish City Council followed the lead of towns like Billings, Bozeman, and Boise, to name just a few, and adopted requirements that either the main house or its ADU must be owner-occupied.

By removing Whitefish zoning’s existing requirements that the property owner of an ADU must be a permanent resident in the primary dwelling, and by not requiring a local workforce friendly rental period for an ADU of 12 months or more, and by even removing existing requirements that units be rented for more than 30 days, Whitefish is failing to make ADUs obtainable for local workers who need long-term housing, and turning neighborhoods into places where ADUs serve essentially as short-term rentals.

Alarmingly, these new ADU regulations lay the groundwork for a growing trend across the country where corporate real estate investment firms sweep into towns like Whitefish and buy up housing across the city. Especially housing where two short-term rentals are now permitted by right on one neighborhood lot. It is estimated that 25% of housing sold in the country last year was bought by investment firms and priced for rents out of reach of local families and workers.

By scrapping current Whitefish zoning requirements for owner-occupied, deed-restricted housing if an ADU is added in a neighborhood backyard, Whitefish is enticing corporate real estate investment firms to buy up housing stock in the city. Requiring owner-occupied housing encourages locally owned long-term housing in Whitefish and keeps owner-occupied housing more affordable for local families and workers when ADUs are added to a city lot.

What’s equally disturbing is that in allowing for non-owner-occupied housing, the city has also deemed itself ineligible for significant new federal funding for housing under the Biden-Harris Administration Housing Supply Action Plan To Help Close the Housing Supply Gap in Five Years, announced on the same day that the city council adopted these new regulations. A key, overarching requirement, of this much-needed new housing funding is that it be targeted to communities creating housing opportunities for owner-occupied housing. As the media release on this new federal housing funding opportunity pointed out, “Large investor purchases of single-family homes drive up home prices for lower-cost starter homes, making it harder for aspiring first-time and first-generation home buyers, among others, to access wealth-building opportunities from homeownership.”

It’s time to write to the Whitefish City Council and insist that they withdraw these recently adopted zone changes and amend them to ensure that any changes to the city’s ADU zoning secures long-term, worker-friendly rentals, and owner-occupied and neighborhood-friendly housing standards for Whitefish.

Mayre Flowers, Citizens for a Better Flathead, Board Co-Chair