Outlook Edition

Flathead Valley Continues to Chart Record-setting Residential Growth

In Kalispell, permitting for residential development has set new records for three consecutive years, mirroring growth in Whitefish and Columbia Falls

By Tristan Scott
An apartment complex under construction on Two Mile Drive in Kalispell on Dec. 20, 2019. Hunter D’Antuono | Flathead Beacon

At the close of 2020, Kalispell’s planning and building department charted a banner year for residential and multi-family permits, effectively doubling the already-high bar the city set in 2019.

Around this time a year ago, Kalispell Development Services Director Jarod Nygren predicted another busy year in 2021, noting that the COVID-19 pandemic hadn’t slowed growth; rather, it seemed to have sped it up.

The city planner’s predictions were born out in the 649 multi-family building permits his department issued in 2021, as well as in the 241 permits single-family, townhouse and duplex units, amounting to 890 total permits for new residential units.

“Last year we issued 460 residential unit permits, which was a record, so we almost doubled our previous record,” Nygren said, comparing 2020 to 2021. “Multi-family is definitely the trend and I expect that to continue into next year.”

The growth, city officials say, is in response to pent-up demand and what Kalispell City Councilor Ryan Hunter called a “desperate need for multi-family housing,” coupled with the influx of new arrivals to the Flathead Valley. The uptick in new permits also account for projects that have been in the planning stages for years but are only now coming to fruition, a cumulative response to the issues of a low-housing supply and unprecedented demand.

“The number of multi-family units issued last year was a record,” Nygren explained. “The market is responding to the demand, as we are hovering around 0% vacancy within the city and have been for years, even pre-pandemic. Thankfully, our council was ahead of the game and had approved over 1,000 units of multi-family pre-pandemic and are seeing those units come to fruition now.”

Since at least 2018, the planning department has known that about 1,000 new multi-family units would be coming together in the coming years, and it anticipated a continuation of the 2020 trend that saw more units reach the permitting phase. That’s led to more construction of new apartments throughout the city, especially along Two Mile Drive and in north Kalispell.

Using planners’ baseline average of 2.5 people per unit, the combined 890 single-family and multi-family units permitted last year equates to housing for roughly 2,225 people, which Nygren said can help alleviate growing rent costs.

“The council has also approved over 2,000 multi-family units within various developments over the last two years,” Nygren added. “We will continue to see these units come into the market in the coming years. It certainly helps the supply, which helps keep the rental market in control.”

The market is responding to similarly high demand in other corners of the valley, too, even as cities like Whitefish experience more infill growth and fewer large subdivisions, due mainly to the community’s limited supply of large land tracts, as well as its higher costs. Development in Whitefish has largely been driven by individual property owners building their own custom homes rather than developers constructing spec houses on multi-lot layouts.

Still, several major developments are in the review phase in Whitefish, including a proposed mixed-use project that calls for the construction of commercial properties and 318 residential units at the base of Big Mountain Road. The project has prompted an outpouring of opposition, even as the plan has curried favor from some residents who say high-density housing developments are necessary amid the city’s accelerated growth trajectory and its dearth of affordable housing.

Developers of the Mountain Gateway Project say about 10% of the proposed development would be affordable housing, the scarcity of which most people agree has reached crisis levels. Even so, the Whitefish Planning Board has voted to deny the developer’s request for a Planned Unit Development that would set the stage for construction. While the board’s decision was a blow to the project, it’s not the end of what has become an extensive debate in a town where housing is scarce and demand runs high.

Among those who weighed in at the planning board hearing were residents, property owners, business owners and attorneys, as well as representatives of the nonprofit Flathead Families for Responsible Growth, including a traffic engineer hired by the group. The nonprofit was formed to oppose the development.

Most of those who spoke during public comment were critical of the development, arguing that it would increase traffic problems and pose related safety risks. Some cited the danger increased traffic could pose during a wildfire evacuation. Others argued the proposed roundabout would be ineffective at alleviating gridlock congestion that can impede drivers attempting to turn out of residential streets.

Deliberation over the proposal will still be ongoing next year when the Whitefish City Council is slated to take up the development and zoning change request at a Jan. 18 meeting.

In Columbia Falls, evidence of the city’s transformation continued with the trends of both residential and commercial construction, according to City Manager Susan Nicosia.

Much of the city’s growth has been shaped by developer Mick Ruis, whose planned-unit development on 28 acres along Garnier Creek, known as the Garnier Heights project, aims to build 76 townhomes on individual lots and 26 detached single-family homes for a total of 102 units.

That’s the same Mick Ruis who turned his attention to Kalispell, where he purchased the former CHS grain elevator property on Center Street and Fifth Avenue West, where he’s laid plans to build a bar and restaurant on top of the historic structures, surrounded by 230 residential units spread across the property and an adjoining five-acre parcel.

Starting this spring, Ruis said above-ground construction of the Kalispell development should move swiftly, as he has been stockpiling materials in warehouses he owns to counteract shortages, with the expectation of finishing the residential project by the end of 2022.

Although Nicosia noted that Columbia Falls actually issued fewer residential building permits in 2021 than it did in 2020, she explained that the projects are larger, and noted that the mixed-use projects along the downtown corridor include both commercial and residential.

For example, the multi-phase downtown project spearheaded by Ruis at the intersection of Nucleus Avenue and Fifth Street involves the construction of a three-story building featuring 30 two-bedroom units and 18 studio or one-bedroom units, as well as 7,500 square feet of commercial and retail space.

“That’s a lot of residential units downtown,” Nicosia said.

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