Real Estate

As Whitefish Eyes Housing Needs, Report Lays Bare Affordability Issues

The strategic housing plan steering committee next meets on Sept. 8

By Mike Kordenbrock
Whitefish and Big Mountain on June 30, 2022. Hunter D’Antuono | Flathead Beacon

A draft updated community housing needs assessment report made public by the city of Whitefish in August shows that the rate of residential construction isn’t the big problem when it comes to the housing crisis that has gripped the mountain town.

 From 2016 through 2021, the city needed 980 units of housing. Instead, it got 1,069. But the vast majority of those units of housing are far too expensive for many residents and workers to rent or purchase.

According to a recent report the city commissioned from the consulting groups WSW Consulting and Agnew Beck Consulting, only 7% of housing units built between 2016 and 2021 were priced below market rate, when the city needed 60% to be priced below market rate. The flip side is that 93% of those units are priced above market rate, when the city needed just 40% to be above market rate.

The same report found that the city needs more than 1,300 new units of housing by 2030, and that 75% of those will need to be below market rate. Currently the city needs 492 housing units to be priced below market rate. Just 76 such units of housing were built from 2016 through 2021, and only 41 more are currently expected to become available by 2025.

Most of the housing construction in Whitefish since 2016 has been single-family. Since 2016, 137 community housing units were proposed but not approved, and the report notes that “every project that is denied is a message to developers to not ‘risk’ using incentives, discourages public support, and hurts the ability to raise financing for housing.”

According to the updated community housing needs assessment, the housing crisis in Whitefish is being driven by wages that haven’t kept up with home prices and rents, rising regional home prices that have cut into commuting as a viable alternative, the misalignment of job growth and housing development, and the loss of community housing.

How the city overcomes these issues or mitigates impacts is a complicated question, but in a series of open house sessions on Aug. 31, city staff presented a summary of the report’s findings, and solicited input from attending members of the public as part of the city’s ongoing efforts to update its Strategic Housing Plan.

Called Refresh 2022, the process of updating the city’s housing needs assessment and 2017 strategic housing plan began back in June, and will continue on Sept. 8 with a steering committee meeting. Under its current timeline, the Whitefish City Council will have a chance to adopt the new strategic housing plan in November.

Marissa Getts, the housing coordinator for the city of Whitefish, said at the final open house meeting of the day on Aug. 31 that people had attended each session throughout the day. There were also opportunities for people to submit feedback online.

As part of the open house, city staff encouraged people to respond to prompts printed on posters hung up in the city council conference room. Using stickers, attendees could place a sticker under the answer to those prompts they agreed with. For the question of “What priority should community housing efforts be in the Whitefish area?” 22 of 23 respondents placed a sticker in a box for the answer that it should be the top priority in Whitefish. One person said it should be a high priority.

Similarly, all 23 respondents used stickers to identify housing unaffordability in Whitefish as an “extremely serious problem.”

Addressing attendees, Getts laid out where things stood at the start of the summer when it came to the price of renting a property in Whitefish.

 “As of June 2022, $3,000 is the median listed rental price for property in Whitefish, That’s only affordable to households with an income of $120,000 or more. That is more than twice the area median income for folks who live and work here in Whitefish,” Getts said.

She later noted that the updated assessment report found that since 2016 it’s not uncommon for landlords of Whitefish properties to raise rent by as much as $500 in a single month.

“You have really dramatic increases in homeownership prices, and rentals, and wages are not increasing very much. That’s really where you get the affordability crisis,” Getts said. “A lot of people say well we just need more wages, which is true, it’s certainly part of the solution, but the average wage in Whitefish would need to more than double for people to be able to afford the average house for rental or homeownership.”

 Later, she explained how 57% of Whitefish workers, or about 3,500 workers, commute to the city on a daily basis. In the past, workers priced out of living in Whitefish were able to live in nearby communities in the Flathead Valley, but Whitefish is not the only community where residential sales prices have skyrocketed in recent years. In the county as a whole, median residential sale prices from July 2015 through June 2016 were $242,000. By June of 2022, that amount had risen to $697,000. In Kalispell over that same period the median residential sales price went from $189,500 up to $650,000.

Commuting costs add up, too. The housing needs assessment draft report showed that commuters from Kalispell drive a mean distance one way of 15.6 miles for a cost of $406 a month or $4,875 a year. The average person who commutes to Whitefish for work drives a mean distance one way of 17.8 miles for a monthly cost of $465 and an annual cost of $5,583.