In the Flathead, civic leaders struggle with a worsening housing ‘crisis’

Ed Docter, owner of a bar and ski shop in Whitefish, didn’t think he’d have any problems finding help this summer, even in the midst of a nationwide labor shortage. After all, Montana Tap House and Tamarack Ski Shop offer competitive wages and a fun atmosphere.

But reality caught up with Docter in August when he had to cancel his regular lunch service for about a month because he was short-staffed.

Economists say there are a number of reasons for the labor shortages pinching communities across the country, from people being choosier about what they do for work to retirement — but Docter and many others in Whitefish place the blame squarely on a lack of affordable housing. Docter said he personally knows of dozens of people who used to work in Whitefish’s service industries but have left in the last two years because they couldn’t find a place to live. Some have moved to less expensive communities in the Flathead and found jobs there. Others have left the Flathead Valley or Montana altogether.

“Every one of us knows someone who has left Whitefish,” Docter said. “It’s a crisis.”

Docter was a panelist at an affordable housing forum in Whitefish on Nov. 17 that featured representatives from local government, nonprofits and the business community. The event was hosted by the Flathead Democratic Party and co-sponsored by the Northwest Montana Association of Realtors, the Kalispell Education Association and NeighborWorks Montana.

LACK OF affordable housing has been an issue in Whitefish and the surrounding valley for years. In 2016, a housing needs assessment conducted by the city of Whitefish found the town needed 980 new housing units over the next four years, with 605 of those priced below the market rate to ensure that people who work in the community are able to live there. The pandemic appears to have only exacerbated the issue as more people move to the area, freed from having to live in a specific place thanks to remote work. As a result, home prices have spiked in Whitefish. In October 2019, the median sales price in Whitefish was $410,000. Two years later, in October 2021, it had jumped to $782,000. Similar price spikes are being seen across the Flathead Valley, including in Kalispell and Columbia Falls, places that have long been regarded as affordable alternatives to Whitefish.

Another issue is the proliferation of short-term rentals. In 2014, there were just 31 short-term rentals in the 59937 zip code, which includes all of Whitefish. Now there are more than 1,000, according to AirDNA, a site that tracks rentals on Airbnb, Vrbo and other vacation rental services.

Whitefish is expected to produce another housing needs assessment in 2022, and many stakeholders believe it will show a housing situation even more dire than the 2016 assessment.

Over the decades, Whitefish has tried a number of methods to address its housing issues, including the establishment of a housing authority and inclusionary zoning that required developers to include a certain number of deed-restricted residences in any project or pay fees. Whitefish and Bozeman were the only two communities in the state to have such a zoning program, but both were torpedoed earlier this year when Gov. Greg Gianforte signed a bill prohibiting them.

AT THE forum, panelists at the housing forum in Whitefish lamented the end of that inclusionary zoning program, but offered other solutions to the community housing problems. Kalispell city councilperson Ryan Hunter said the Flathead’s continuing growth will require a new mindset among locals about zoning and where new homes are built. He pinned part of the blame on nimbyism (NIMBY stand for Not In My Backyard) and restrictive zoning that doesn’t allow for dense housing developments.

“When your community is going through great change like ours is, it’s not fair to say, ‘Well, my neighborhood can’t change.’ You have to be part of the solution,” he said. “Nimbyism is one of the biggest barriers to affordable housing.”

One proposed development mentioned multiple times during the forum is the Mountain Gateway project at the base of Big Mountain, which has become the subject of a contentious debate in Whitefish. The development calls for 318 housing units on 30 acres north of downtown, with 32 of the rental units being deed-restricted.

Opponents say the development would result in additional traffic, especially in winter when thousands of vehicles turn onto Big Mountain Road every day to reach Whitefish Mountain Resort. They also say 32 affordable units isn’t enough to address the community’s housing needs. Proponents of the project say any long-term rental units — deed-restricted or not — would help the city address its needs. After a long hearing last month, the Whitefish Planning Board last week voted 3-1 to recommend the project be denied. The Whitefish City Council will make the final decision and is scheduled to hold a public hearing Jan. 18.

Meanwhile, local businesses desperate for help are exploring their own solutions to the housing crisis. This summer, Docter and a number of other local business owners formed the Whitefish Workforce Housing Project to lease housing and then rent it to their employees at a discounted rate.

Docter said he is leasing three different homes to his employees, and that the project is preparing to provide 25 to 50 units at a discounted rate for service workers in the coming months. The project’s steering committee is planning to form a nonprofit cooperative in the coming months. Docter said the units will cost workers about $700 a month.

Docter also said timing is of the essence, and if the local community doesn’t step up soon to solve the housing crisis, the town will never be able to solve it.

If nothing is done, he said, “It’s only going to get worse.”