Real Estate

Whitefish City Council Votes to Reduce Number of Deed Restricted Homes in Subdivision

Developer applied to loosen restrictions on 10 of the 58 homes in the Trailview subdivision in hopes of offsetting unforeseen labor and material cost increases

By Mike Kordenbrock
The Trailview housing development in Whitefish on Feb. 16, 2022. Hunter D’Antuono | Flathead Beacon

The Whitefish City Council on Tuesday night unanimously voted in favor of a developer’s request to reduce the number of deed-restricted houses at the 8-acre Trailview subdivision.

The reduction was done by amending the conditions of approval for the planned unit development, which council had approved in 2018. Construction on the subdivision along Voerman Road is still ongoing.

 The council’s vote dropped the number of deed restricted units at the developing neighborhood from 58 to 48, and will free up 10 units to be sold on the free market, something developer Jerry Dunker put forward as a necessary option due to the rising costs of the project that he says have been driven up by increasing material and labor costs, and material shortages and delays that have caused a more lengthy, complicated building process.

Dunker recently told the Beacon that he had originally hoped to complete construction in 2022 but that delays have now pushed an end date back to at least 2024.

Ahead of Tuesday night’s meeting city staff with the Planning and Building Department had advised Mayor John Muhlfeld and the City Council in a Feb. 15 memo to consider the request to amend the conditions of approval for the development. The same memo noted that the reduction would leave 83% of the homes as deed-restricted, which is still above the 10% required at the time of approval.

Half of the homes are under a light deed restriction. That light deed restriction does not include an income restriction, but requires that the homes would need to go to local workers. The amendment voted on by the council Tuesday night means that 24 of the 48 remaining deed-restricted units have purchase restrictions setting them aside for people making between 80% and 150% of the area median income.

Dunker addressed the council before their vote and offered some context about the subdivision’s progress, and how the request could affect the final makeup of the project.

“We’re not going to stick these on the market right away and try to sell them,” Dunker said of the 10 units he was asking for permission to sell at market value. “We can, but we want to look at some options to keep these affordable and keep them deed-restricted.”

He elaborated he was looking into both donor options and options involving American Rescue Plan (ARPA) funds.

“Our goal from the start was 100% (deed restricted),” Dunker said. “Unfortunately there’s economics we didn’t predict.”

According to Dunker the subdivision construction could reach the halfway point when the seven homes currently under construction are completed, with some finishing in April and others in July. With 22 homeowners currently in the development, he said the average sale price was $315,000, which is something he contrasted to home prices in Whitefish generally.

Single family home sales in Whitefish in 2021 increased by 30% for an average price of $1.3 million, Dunker said, adding that the number of single-family homes for sale in Whitefish had dropped precipitously since 2020, and that as of Tuesday the cheapest single-family home currently for sale in Whitefish was an 896 square foot home for $799,000.

Of the 25 qualified buyers for homes in the Trailview subdivision people fall between 45% and 150% of the average median income, for an overall average of 95% of the average median income, according to Dunker.

There was little discussion from the council before the unanimous vote to approve the requested change. Councilor Rebecca Norton acknowledged the difficulty of the situation Dunker is in, and Councilor Giuseppe Catalbiano said that he believes this was a good example of how the city can work together with private enterprises and donors on affordable housing.