Whitefish City Council has halted a proposal to allow workforce housing in the city’s business district.

Council Feb. 6 tabled an ordinance to amend its zoning code to allow for multi-family and workforce housing in above-ground commercial buildings and allow such projects with a conditional use permit in the secondary business district.

Prior to the vote, Council heard from two different groups wanting to create workforce housing, but also heard comments from community members who said the proposal produced by the city needs more work before it’s ready to be implemented.

Council approved tabling the ordinance on a 4-1 vote. Councilor Katie Williams voted in opposition and Councilor Frank Sweeney was absent from the meeting.

In his motion, Councilor Richard Hildner said he wanted to table the matter until the city’s rewrite of its planned unit development regulations is complete and the second phase of workforce housing study is complete.

“The definition of affordable is not consistent with other documents we’ve been looking at,” he said. “The affordability issue is not well-defined in the text amendments.”

At least two proposals appeared to be waiting for the change to occur.

The Best Western Rocky Mountain Lodge and Pine Lodge hotels, which are owned by Delaware North, are looking to create workforce housing by remodeling an eight-unit building behind the Best Western.

Kristen Stokes, general manager of the Whitefish hotels, wrote a letter to the city detailing its plan to convert the annex into 12 units with an on-site manager.

Council asked if the hotel could rent the rooms to its employees under current regulations.

Planning Director Dave Taylor said residential housing currently isn’t allowed as the primary use in the business district, but the city doesn’t regulate how long hotel rooms can be rented. He pointed to the Whitefish Motel as a facility that allows long-term rentals.

However, during public comment Bill Halama told Council he has been working with the city Planning Department for months on a planned unit development project to create a workforce housing project with 24 units, but the PUD process just doesn’t fit.

“I’ve been trying to do something with the wrong vehicle,” he said. “This [CUP] is going to encourage mixed-use development the city wants. The need is pretty critical and it’s right now.”

Several citizens who commented said the city needs to wait on the text amendments until the second phase of a workforce housing strategy is complete. The Whitefish Chamber of Commerce along with the city are planning for that strategy, which is a follow up to the housing needs assessment completed last year.

Mayre Flowers of Citizens for a Better Flathead said there may be other tools the city can use to address immediate needs.

“We believe the text amendment is premature,” she said. “We don’t know what the housing study recommendations will be and the PUD committee has not finished.”

A committee is currently undergoing a revision of the city’s PUD regulations. Flowers also pointed out that the city recently committed to a corridor study of U.S. Highway 93 South which includes the secondary business district.

Rhonda Fitzgerald said it’s important to wait until the housing strategy is complete.

“We need to wait until we know what that strategy is,” she said. “We could interfere with our own goals to get affordable housing.”

She also pointed out that there is nothing in the text amendments that guarantees that the housing units created would be affordable.

“Wishful thinking has not given us affordable housing so far,” she said.

The lack of affordable workforce housing in Whitefish has been termed a crisis. Business owners and mangers, particularly in the service industry, have for years said that a lack of housing has become a barrier in hiring employees.

A workforce housing study, created in a partnership with the city and Whitefish Chamber of Commerce, released in December, showed that Whitefish needs almost 1,000 affordable housing units added to the city by 2020 to make up for current shortage and plan for future needs.

The study says about 980 housing units are needed to address current workforce housing shortages and keep up with demand. About 605 units should be provided at more affordable prices than supplied by the market to meet the full range of needs of the local workforce, the study says.

A growing economy, rising home prices, scarce rental availability and few homes listed for sale at lower price points, and a shortage of housing at prices that are affordable for the workforce are all part of the issues facing Whitefish, the study notes.

The second phase of the housing study is set to look at options in dealing with housing needs and provide solutions to the situation.