Kalispell Council Revisits TIF Eligibility for Workforce Housing

Kalispell city councilors at a Monday night work session revisited ordinances that would allow workforce housing projects to become eligible for tax increment financing (TIF) within certain areas of the municipality.

The ordinances would amend the Downtown and West Side/Core Area Urban Renewal Plans to include workforce housing for households with an income of 80% to 120% of area median income (AMI) as an eligible project.

Originally brought forth in 2022 as the city experienced a rapid population growth, the ordinances were tabled following negative public feedback and an absence of project proposals.

“We had no pending projects, there was controversy within the community at the time and workforce housing was not yet defined,” Planning Services Director Jarod Nygren said.

If approved, the amendment would add workforce housing as potential developments to the urban renewal plan, which was adopted to use TIF funding to promote economic development, improve employment and housing opportunities while expanding the tax base. Project proposals would still be subject to council approval.

Previously, major TIF-funded projects include the Parkline Trail, Glacier Rail Park and the future Charles Hotel and parking garage. The addition of workforce housing eligibility could open the door for potential workforce housing projects and aid developers with financing.

Eligible workforce housing developments would serve households earning between 80% and 120% of AMI. In 2022, Flathead County’s estimated AMI for a four-person family was $80,300.

For example, if a four-person household met the 80% threshold, they would be able to afford a monthly housing cost of $1,587 without exceeding 30% of the household’s gross income. A four-person household at a moderate income of 120% would be able to afford $2,382 per month.

Since the council last reviewed the ordinances in 2022, the state Legislature adopted definitions regarding workforce housing, which defines “attainable workforce housing” as a household spending no more than 30% of gross monthly income for a mortgage payment, property taxes and insurance.

At the time of its original introduction, Councilor Chad Graham said he struggled with the ambiguity of workforce housing but expressed support for its potential.

“We were really grappling with what that definition was,” Graham said. “I really do see that in our community, there is a need for housing for the workforce. We’re really good on this council for approving projects that come before us – this could be another tool that could be used.”

Councilor Ryan Hunter also supported the ordinances and said it would provide flexibility and creative financing solutions.

Northwest Montana Community Land Trust Executive Director Kim Morisaki spoke in support of the ordinances during public comment and saw a potential partnership with the city.

Morisaki highlighted the partnerships the land trust already has with Whitefish and Columbia Falls, and she hopes the potential for workforce housing TIF funding in Kalispell could bring more workforce housing options.

In Whitefish, Morisaki has been working with state and city officials, developer Jerry Dunker, and private donors to acquire a handful of townhomes in the Trailview development that are sold to eligible homebuyers below market rate.

“He’s a great partner – he’s patient and he’s a developer who’s got a vision for what’s happening in workforce housing in Whitefish,” Morisaki said referring to Dunker. “I am confident there are other developers in Kalispell who have the same vision that we could work with.”

The land trust is also working with Columbia Falls officials to build seven homes in a partnership with Habitat for Humanity on a former youth sports field that was recently donated by the city.

“We would love to be partners in making sure there’s more appropriately priced housing in this valley for workforce,” Morisaki said.

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