Affordable housing falling behind

Whitefish housing assessment surveys distributed to 3,500 renters and homeowners

By RICHARD HANNERS / Whitefish Pilot

Builders and developers are not meeting the demand for affordable housing in Whitefish, a new report concludes, and it's time for the city to take a more proactive position.

The 2008 Housing Needs Assess-ment report was prepared for the city by Applied Communications, which includes former Whitefish city planning director Bob Horne and his wife Kathleen McMahon.

"There is a large disparity between the cost to purchase a home and the incomes of Whitefish residents," the report states.

The maximum mortgage that moderate income households can afford was $187,000, but only 12 homes and 11 condominiums sold last year were in this price range. For households making 90-100 percent of area median income, the maximum affordable mortgage was $144,000, but no single-family homes in that price range were sold here last year.

"Consequently, half of all households in Whitefish would not have been able to afford any single-family home on the market in Whitefish in 2007," the report states.

Construction of new homes does not appear to be the answer. The average construction cost in 2007 for single-family homes was $403,148. For multi-family homes, it was $311,387. This does not include the cost of land.

"There continues to be a strong demand for high-end homes in the Whitefish area, and the profit margins for developers and builders are greater for this product type than they are for more affordable units," the report states.

Currently, the city has a voluntary arrangement with developers to create affordable housing. In exchange for a bonus density or a reduction in the open-space requirement, developers must provide 10 percent of their units as affordable housing or pay $6,000 per unit to the city's affordable housing program.

Over the past three years, however, the affordable housing program has acquired five voluntary units and a pledge for two units and $1.6 million.

"Given the projected workforce housing need of 20 units per year, the production of affordable units will keep falling further behind unless a more proactive approach is taken by the community," the report states, saying a mandatory program is justified.

Survey results

In June 2007, the city mailed surveys to all residential utility customers in the study area. Additional surveys were hand-delivered at apartment complexes and distributed to employees of the city, North Valley Hospital, schools, major hotels and three large grocery stores.

About 3,500 surveys were distributed, and 796 were returned. Additional information was gathered by interviewing major employers, housing professionals, real estate professionals and members of the business community.

Among the findings:

? Overall, about 82 percent of respondents were homeowners and 18 percent were renters. About 82 percent live in single-family homes.

? The average household size is 2.37 people, up from 2.2 in the 2000 U.S. Census. The average household size for renters was slightly higher — 2.4 people.

? The average number of years a homeowner has lived in Whitefish was 19.94, compared to 8.76 for renters.

? Nearly 40 percent of renters had children under-16, compared to 29 percent for homeowners, but 26 percent of homeowners had household members over-65, compared to 10 percent for renters.

? About 60 percent of homeowner households exceeded $52,000 per year, compared to 26 percent for renter households. Half of renter households reported incomes less than $35,000.

With many renters classifying their homes as fair or poor, the report's authors suggested the city implement a housing code to make rental units safe and sanitary. They also called for an expanded home-rehabilitation program with low-interest loans or grants to fix up older homes.

"Units that are in poor condition are at risk of being demolished so that the land, which has increased significantly in value over time, can be redeveloped," the report states. "This removes affordable units from the housing stock and causes displacement of low-income residents."

Workforce housing

All employers said affordable housing was a significant community problem. Most said they were experiencing labor shortages and "felt that government has a legitimate role to play in the affordable housing issue," the report states.

Employers said 50-60 percent of their workforce lives outside Whitefish and finding housing was a major obstacle to recruiting workers. Higher gas prices have made more workers unwilling to commute from Kalispell or Columbia Falls, employers said.

The report's authors, however, did not rule out commuting.

"While Whitefish is generally considered to have a labor shortage, the communities of Columbia Falls and Kalispell are within reasonable commuting distance," the report states. "Whitefish is not an isolated resort community like Jackson, Wyo., or Aspen, Colo."

They also did not recommend the city enact a "mandatory 'linkage requirement'" that would require businesses to provide employee housing.

"This could have a severe impact on Whitefish's development objectives, especially implementation of the Downtown Business District Master Plan," the report states.

The authors did not find evidence that the second-home market was driving up the prices of affordable units, with the exception of condominiums. But there are other impacts.

"Second homes can sit dark and vacant up to 50 weeks out of the year," the report states. "Property maintenance can be sporadic, and adjacent sidewalks often remain covered with snow and ice during winter."

The survey suggests a significant turnover is possible over the next 10 years. About 60 percent of respondents said they plan to sell their larger home and purchase a smaller home in the next 5-10 years.

Among renters, about 28 percent plan to move but stay in Whitefish. About 21 percent plan to move into assisted living. There is also a preference for single-family homes under 1,200 square feet and for homes located near work.

"According to sales data, however, the single-family homes being added to the market through new construction are larger in size and, therefore, more costly," the report states. "Smaller units, such as condominiums and townhouses, are more affordable but are not the preferred housing type."