There could be at least one silver lining in the national and local economic and housing slowdown: A possible increase in affordable housing development in the Flathead Valley.
“With the market pretty much paralyzed and less access to credit and home loans because of the financial crisis, one bright spot is that federal and state programs still have USDA (United States Department of Agriculture) monies in the bank, ready to go and can still qualify people for homes,” said Jerry Nix, project coordinator and director for the Siderius Commons development.
Plans for Siderius Commons are in their earliest stages, but it’s expected to have at least 100 homes with a target price of $135,000 each, among other residential and commercial buildings.
The 207-acre project is located on the west side of U.S. Highway 93 with Cemetery Road on the north end of the property and Ashley Meadows Road on the south.
In order to bring the development’s housing costs down, Nix said a community land trust will be set up. He is currently talking with Kalispell’s Community and Economic Development Department (CED) to see if a partnership with the city is possible.
Generally, a landowner donates property to begin a community land trust. The trust then owns the land beneath a house, so the buyer purchases only the structure, not the property. This eliminates land costs from the home’s purchase price, Nix said, so a lot and home that would normally sell for about $175,000 can be dropped down into the more affordable $135,000 range, or about 120 percent of the area’s median annual wage.
Kelly Danielson, director of the CED, said one of the most promising parts of such a trust is that the affordability remains in perpetuity. Deeds are restricted and a contract between homeowners and the trust sets a resale formula that caps what a home can sell for.
Whitefish’s housing authority is working on a community land trust, Danielson said, while Missoula already has three.
“It’s already popular in several other states and, all of a sudden, is becoming a tool people in Montana want to use, too,” she said. “We have affordable housing in the Flathead Valley; we just don’t have enough.”
Local real estate officials agree there is a robust market for homes under $250,000 here, and say the main problem in the Flathead is that a glut of homes above that price sit on the market, when 80 percent of the population here can only afford homes in the $150,000 range.
But as Montana begins to suffer more acutely some of the housing and economic slowdown that other states are grappling with, developers may abandon the dwindling market for high-end homes and address the dearth of affordable options.
“Everybody else in valley has got larger lots and larger homes, so there’s no reason for us to compete with that,” Nix said. “There’s a market for more affordable, community housing, and it serves a group whose needs we want to meet – our teachers, policemen, the valley’s average workers.”
In addition to the affordable homes, the Siderius Commons is expected to have about 335 more residential units, including town homes and apartments, as well as a commercial district that could include a grocery store, a fitness center, a community center, health care facilities, and local businesses among others. Paths along the property would connect bike routes from Somers to Kila.
“We wanted to create a self-sustaining community, where residents in the community support the commercial and the commercial supports the residents,” Nix said. “The aim is to have as many activities contained locally, from recreation to schools, so that people don’t have to always travel to the north end of town.”