Kalispell Councilors Discuss Purchasing Land for Affordable Housing

Mayor Ryan Hunter began Monday’s Kalispell City Council work session with an admission that he had brought the two items on the agenda – affordable housing and short-term rentals – before the council for a “lengthy discussion.”

“Obviously this stems from my interest in addressing the affordable housing crisis, which we’re currently still in, and I know the council’s done a lot over the past to address that crisis,” Hunter said, listing developments the council approved over the past year. “But there will always be those who can’t afford market rate housing.”

Hunter proposed the city look into purchasing property for deed-restricted affordable housing projects, donating or leasing the land to nonprofit partners. To fund the cost for a piece of property large enough to potentially host 150 or 200 units, Hunter said the city could sell off some of its downtown parking lots or use funds from one of Kalispell’s Tax Increment Financing (TIF) districts.

Kalispell recently appropriated funding and appointed a committee to conduct an affordable housing study. Though the study is set for completion within the next year, Hunter said he wanted to bring the discussion to councilors sooner rather than later in case there were potential properties on the market that might sell beforehand.

“The use of vacant property in this way for affordable housing is extremely common for communities that are tackling affordable housing,” Hunter said. “I just know it’s widely, widely common.”

Several councilors said they didn’t like the idea of selling parking lots due to community concerns around downtown parking. Although the council approved new parking rules this summer to help keep downtown street spaces open, the rules will likely continue to go underenforced after the council reversed plans to buy a license plate reader to help with enforcement.

“I think the TIF district is the way to do that,” Councilor Wes Walker said. “Our parking I don’t think we value enough,”

Councilors were hesitant to jump into purchasing city property before having data from the housing study to back it up. Several mentioned blighted properties on the west side of town the city could purchase for redevelopment in the future. Councilor Kari Gabriel compared the proposal to the creation of the Parkline Trail, which took time to come to fruition

“With most of us, we want to get there, but there’s something that’s missing to get us over that hump,” Councilor Dustin Leftridge said.

They directed staff to wait for results from the housing study before beginning to search for potential properties.  

Hunter’s second agenda item called for councilors to consider an update to the city’s short-term rental regulations. The city’s current policy, adopted in 2016, caps short-term rentals at 2% in residential zones. Hunter proposed applying a 2% cap per ward to help preserve the character of neighborhoods and prevent certain areas from becoming “ghost towns” without year-round occupants. Kalispell maps currently show a higher concentration of rentals like Airbnb and VRBOs in the downtown historic district, comprising just over 2% of the ward’s housing.  

The city’s policy also includes an annual permitting process, a life safety inspection by the building department, a review from the health department, registration verification for the state bed tax, and contact information provided to properties within 150 feet.

Several councilors said they were hesitant to add restrictions, noting that many rentals are hosted by snowbirds who live in town half the year or retirees looking for additional income. Some said they would be open to discussing different ways to regulate short-term rentals, but felt a 2%-per-ward cap was too broad.

“I hate to hem in somebody’s ability to pay their mortgage,” Councilor Gabriel said. “I know people in Columbia Falls that will move out of their house and go live in their camper so that they can keep their house and make their payments.”

Staff keep an eye on the number of short-term rentals in the city, City Manager Jarod Nygren said, and the percentage of short-term rentals has seen a slight decrease as other housing developments have come online. He also pointed to a general downtrend in popularity since short-term rentals boomed in 2020 with the COVID-19 pandemic.

“Even if we did see it rise, we’d get that to council,” Nygren said.

Councilors said they felt comfortable with the current 2% citywide restriction for the time being.

[email protected]