The rising cost of housing in Whitefish has prompted the City Council to consider increasing the city’s cash-in-lieu fee per housing unit from $8,000 to $12,000.

The council will discuss the fee increase and is expected to vote on it at tonight’s meeting.

Whitefish city code contains voluntary provisions that allow a 50 percent density bonus if affordable housing is provided for at least 10 percent of the project. That law allows the density bonus to be taken by providing cash-in-lieu payments to the city for each housing unit.

An affordable unit is one that can be purchased by someone earning up to 120 percent of the median family income in Flathead County without being cost-burdened, according to City Manager Chuck Stearns’ council report. Generally a homeowner is considered financially burdened when mortgage payments exceed 30 percent of one’s monthly income.

Whitefish Housing Authority Director Lori Collins said in a memorandum to the city that a payment-in-lieu of $12,000 per unit makes up 100 percent of the difference between an affordable mortgage and a market rate home mortgage.

The housing authority, which operates permanent affordable housing programs that buy down the price of homes to an affordable level, is recommending a $4,000 increase from the current $8,000 level.

The council raised the per-unit fee from $6,000 to $11,000 in 2008, but the recession prompted the city to reduce the fee to $8,000 in 2012 because subdivision development was stagnant.

In other business, the council will hold a public hearing for a proposal to rezone certain tracts of recently annexed land on West Lakeshore Drive from county to city one-family residential zoning.

The council will consider a resolution establishing “No Parking” zones along portions of the newly reconstructed West Seventh Street. City officials are recommending no parking on either side of the street from Baker to Karrow avenue because the road is too narrow to accommodate on-street parking with two-way traffic.

The Whitefish Hotel Group is asking for additional reimbursement from the city’s tax-increment fund to cover infrastructure improvements related to the Firebrand Hotel at the intersection of Spokane Avenue and Second Street.

Last year the council agreed to use tax-increment money to reimburse the Whitefish Hotel Group for $147,000 for sidewalks, a bicycle promenade and streetscape amenities surrounding the new hotel.

The actual cost of the improvements was $170,817, so the developer is asking for the additional $23,817.

The council meets at 7:10 p.m. Monday at the interim City Hall, 1005 Baker Ave.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.