Community Land Trust Expands Affordable Housing Inventory in the Flathead Valley

When mortgage rates started crawling to 7% last year while housing prices remained unaffordable in the Flathead Valley, Whitefish parents Coral and Trey Nassat were facing a variety of financial obstacles as they searched for a home large enough to raise their five kids.

Coral, a Whitefish High School teacher, and Trey, a Whitefish Police Department officer, looked at real estate around the valley but were denied home loans until they were introduced to the Northwest Montana Community Land Trust (NWMTCLT).

The community land trust, a nonprofit affordable housing organization that provides below-market rate homeownership, cleared a path for the Nassats to purchase a three-bedroom, two-bathroom home in the Trailview housing development in Whitefish. They bought their home for $377,000, compared to its market rate of $645,000.

“The nice thing is we own this place,” Coral said. “That’s what’s really cool about the community land trust – you’re able to buy a home, which builds equity, and it helps you buy a house in the future too.”

This year, NWMTCLT Executive Director Kim Morisaki helped facilitate a mix of private and government funding sources to purchase two deed-restricted properties at the Trailview housing development in Whitefish, which were recently sold to community land trust recipients.

Private donations from the Whitefish Community Foundation totaled $150,000 this year, which were combined with state dollars from Homebuyer’s Assistance (HBA) funds and a forgivable LIFT loan from NeighborWorks Montana. After Morisaki secured the funding, she partnered with Trailview housing developer Jerry Dunker, who sold the homes below market rate.

“He was willing to be patient with us while we lined up the funding,” Morisaki said.

Community land trusts have operated in the United States for more than 50 years by subtracting the cost of the land from the purchase price of the home. New homeowners can purchase the home below market rate and, when they sell, they are able to make a profit restricted to just 25% of the increase in the market value of the home during the period of ownership. This allows the next homebuyer to also purchase the home below market rate. The land that the house sits on is leased to the homebuyer for $25 per month.

Morisaki is using this model to bring more affordable housing inventory to the Flathead Valley. The land trust also purchased a Kalispell home this year along with two lots.

In the next few years, she and the NWMTCLT board of directors hope to add more inventory to the region. The organization is currently working to bring more Trailview homes to the land trust while collaborating with a variety of partners to bring units to Kalispell and Columbia Falls.

This year, Morisaki received a lot donation on the west side of Kalispell from a family who wants to see more workforce housing. The property is zoned for two townhomes, which are planned to be built in 2024.

Another Kalispell home was recently purchased from a property owner who was willing to sell their home below market rate to a buyer who is utilizing conventional financing in addition to a state funds. The appraised $426,000 home will be sold for $200,000.

In addition to collaborations with private sellers, Morisaki is also working with the Flathead County’s municipalities to create more housing opportunities.

In Columbia Falls, the land trust purchased a lot from the city to add another home by next summer and a home in Kalispell was purchased in December using Neighborhood Stabilization Program funds that the city secured in 2009.

Moriskai credits the addition of these recent properties to creative fundraising and partner collaborations, which she has been brainstorming since she took over as the NWMTCLT director three years ago.

“I started in October of 2020 and at that point, they hadn’t bought anything new for a few years … I came in and the market was so crazy, and I thought ‘how are we ever going to add more houses?’” Morisaki said.

Over the following two years, Morisaki found different avenues like working with developers who share the same vision, by accessing state HBA funds and finding ways to use federal dollars. Last year, the land trust was awarded $200,000 in HBA funds from the State of Montana’s Department of Commerce Housing Division.

“It took all of 2021 and 2022 to figure out how to add more houses and meet people like Jerry Dunker,” Morisaki said. “Now that we have found a model and we have been able to access state Homebuyer Assistance funds, we can keep adding homes.”

Private donors are also learning more about the program, Morisaki said, and she has begun receiving home donations. Earlier this year, Corwin Motors offered to donate a couple four-bedroom, three-bedroom homes that need to be relocated and remodeled.

“I think people are becoming more aware of the land trust,” Morisaki said. “They can make a one-time private donation to the organization and that turns into permanent affordable homeownership for people.”

This article was updated to reflect the accurate market rate price of the Trailview home.