Whitefish City Council has approved a change that is meant to close a loophole that appears to be allowing developers to get around requirements to create affordable housing under the city’s Legacy Homes Program.

Council OK’d a change that lowers the number of units in a project that triggers the requirement for a conditional use permit from eight units to five units in the WR-4 high density multi-family residential zoning district.

Councilor Ben Davis, who also chairs the city’s Strategic Housing Plan Steering Committee, said projects get designed to the zoning code and the housing program can only be as good as its largest loophole.

“If we have large loopholes then that’s the projects we're going to get,” he said. “We’re allowing these projects to be built without any contribution to affordable housing. It’s important that the projects proposed are the best possible projects for the site, the developer and the community.”

Under the change, projects with five to 18 units would require an administrative conditional use permit and those with 19 or more units would require a conditional use permit approved by City Council.

The city received more than a half dozen letters in support of the change.

The Legacy Homes Program began in July 2019 and requires that most new residential developments include affordable housing units or pay a fee in lieu of creating affordable housing.

City Planner Wendy Compton-Ring said the housing committee has been concerned about projects intentionally avoiding the Legacy Homes Program by building projects below the threshold that requires a CUP, but planning staff feels the change may be coming too soon into the creation of the program. She said it could take three to five years to see results.

“By dropping the standard even more, staff is concerned we will see even less dense projects in our highest density zoning district,” Compton-Ring said.

Prior to the change, seven or fewer units were permitted as a use by right, an administrative permit was required for projects between eight and 18 units, anda full CUP approved by City Council was required for more than 18 units.

Council seemed to believe the change should happen now rather than wait.

Councilor Steve Qunell said he hopes the change makes the program better by creating more affordable housing.

“We’re trying the best we can and we don’t know what the right formula is to get more affordable housing,” he said. “This seems like the next best step, but it is not a guarantee.”