Whitefish City Council last week approved a 52-unit condominium project along U.S. Highway 93 West.

Council, on a vote of 5-1 OK’d the project, which is the first residential proposal to gain approval under the city’s Legacy Homes Program. The developers of the project are set to pay a cash-in-lieu fee of affordable housing of about $1.2 million.

Ronnie and Sharon Kyle requested a conditional use permit to construct three buildings for the condo project on the 4.47-acre property located directly across the highway from Whitefish Lake Golf Course.

Under the city’s Legacy Homes Program, the project would need to provide 20% of its units as affordable or 10.4 units, but the developer chose to pay the fee rather than provide units.

Council two weeks prior voted to delay a decision on the project saying it needed more clarification regarding when the developer would pay the cash-in-lieu fee.

The developer originally proposed paying the fee on a per unit basis at the time of the certificate of occupancy. However, Council said it would be more comfortable making sure the fee was paid when the building permit was approved for each building.

Council has expressed wanting to ensure that developers don’t delay finishing projects to then also delay paying the affordable housing fee.

Councilor Andy Feury said if the fee is paid at the time the building permit is issued then the city would have the money in-hand and the developer would likely finish the project.

“If they build the shell of the building they will probably build out the project,” he said.

While the city can request the fee be paid at a certain time, legally it has to hold those funds until the project it came from is completed, City Attorney Angela Jacobs noted.

The developer would obtain a building permit to construct the shell of each building, and then would also need to obtain a building permit for each condominium unit. Building permits are valid for 180 days and continued progress has to be made to finish the building permit.

A certificate of occupancy follows the building permit and is the document that certifies that it’s complete and can be lived in.

Councilor Rebecca Norton was the only no vote against the project.

“I’m disappointed we’re not getting units and if we don’t dial in how to get units then housing costs are just going to get more expensive,” she said.

The Legacy Homes Program recognizes that some locations are not ideal for affordable housing, and thus allows for a cash-in-lieu fee, such as properties like this that are being developed with condos, have high homeowners association dues, have a predominance of short-term rentals and are located far from services.

Plans for the condo project call for constructing three buildings with two containing 18 units and one containing 16 units. The buildings would contain a combination of two-, three- and four-bedroom units.

The property since at least 1982 has been zoned low-density resort residential, which allows for short-term rentals.

Mayor John Muhlfeld asked planning staff to look into what could be done to limit the number of vacation rentals in the city.

“We have too many areas that are zoned for these types of lodging facilities,” he said.