Whitefish City Council on Tuesday rejected the first proposal to come through review under the city’s affording housing program adopted last summer.

Council in a unanimous vote denied a request to construct 36 apartments in two buildings near the new Muldown Elementary School. The project would have provided seven deed-restricted affordable units.

Several Councilors said while they want affordable housing projects here, they couldn’t ignore concerns raised in the last few months by multiple neighbors of the project who said the it would increase traffic in an already unsafe area and that it was too dense to fit in with the neighborhood.

Councilor Steve Qunell said Whitefish is losing its “grit” because it’s losing the people who want to live here.

“I’ve been a champion for affordable housing for a long time,” he said. “We want density to be near the schools and close to town, but Council needs to take a leadership role and it our job to say what is too dense.”

“I can’t comfortably sit up here and think I would want this in my neighborhood,” he added.

Councilor Andy Feury said prior to the city’s Legacy Homes Program being enacted that the project wouldn’t have even been up for review so that was a positive in the process. The apartment project just wasn’t the right fit for the property, he noted.

“It lacks creativity,” he said. “This is a transition from the schools to single-family homes.”

Councilor Melissa Hartman said if it weren’t for concerns raised about increasing traffic, she’d have supported the project because it did call for seven deed-restricted units.

“This is how we do it by chipping away at the issue of affordable housing,” she said.

Central Ave WF had been requesting a conditional use permit for the project on the property located between Seventh and Eighth streets that contained a single-family home.

Aaron Wallace, with Montana Creative, is representing the developer.

“Everybody has an affiliation to this neighborhood and the neighbors have done a great job of sharing it,” he said. “Whether it’s 36 units or 46, this is going to shift to multi-family development. Change is going to occur, and it’s really a question of what sort of change you want.”

Wallace said if the request was not granted then the developer would likely use the property to construct 14 housing units with garages as a use by right. None of those units would be deed-restricted as affordable.

Planning Director Dave Taylor said in order to construct 14 units on the property the developer would only need to obtain a building permit from the city.

Two weeks ago Council delayed a decision on the project after hearing from several neighbors of the project who said it wasn’t the right fit for the property.

Wallace on Tuesday returned with an updated site plan. Changes included reducing the height of the buildings, adjusting the parking area so that headlamps from all vehicles faced the apartment buildings, adjusting the access points into the project, increasing the buffer on the west edge of the site nearest the single-family homes in the neighborhood, and increasing the open space on the site.

Still, neighbors on Tuesday filled Council Chambers providing more than an hour of additional public comment opposing the project. Though some said they appreciated the adjustments by the developer, the density still remained too much.

Echoing the statements of several speakers, John Fleming said safety has become an issue for those accessing the schools in the neighborhood.

“All roads leading to the schools should be a priority before there are any additions to this neighborhood,” he said.

Pete Seigmund said the neighborhood would rather see the 14 units the developer says they’ll build without the permit rather than the 36 units proposed.

“The big weight of affordable housing is overwhelming this conversation,” he said. “This only includes seven units of affordable housing and that comes with higher density that has adverse impacts on the neighborhood and isn’t compatible.”

Rhonda Fitzgerald, who serves on the city’s Strategic Housing Plan Steering Committee, said the apartment project doesn’t fit in with the character of the neighborhood, which is a requirement of the growth policy for any development. In addition, she noted, the city’s housing needs assessment showed that the city needed modest single-family homes for purchase, which would fit the neighborhood.

“It’s important to remember that as we grapple with the affordable housing issue, to know that this project is not an affordable housing project — it’s a project that includes 29 units, along with seven affordable units,” she said. “This has been brought to use as a poster child for affordable housing and it’s not.”

The project was the first to be reviewed under the city’s Legacy Homes Program, which went into effect in July 2019 and requires that 20% of all housing for new residential developments requiring a discretionary permit to be deed-restricted as affordable housing.

Previously, the city had a voluntary inclusionary zoning program, but that produced very few affordable housing units.

Speaking during public comment, Compass Construction owner Bill Goldberg, who has been involved in several projects in Whitefish and Columbia Falls, said he’s not involved in the project on Seventh, but wanted to offer comments in general about the Legacy Homes Program.

“Developers are watching this to see what other projects could be with this program,” he said. “When we run these numbers for projects we have to use density.”