Whitefish needs to add more than 1,300 homes in the next eight years to keep up with housing demands, according to a draft update of the city’s Housing Needs Assessment.

At least 75% of those homes need to be priced below market rate, the study also notes.

The refresh comes after the original assessment released in 2016 showed a need to add about 980 residences by 2020. Though Whitefish through last year did add more than 1,000 units, prices and rents dramatically increased, availability dropped and now residents and employees are struggling more than ever to find homes, housing consultants say.

Of housing units needed in the original assessment, 60% needed to be priced below market but only 7% were.

Wendy Sullivan of WSW Consulting, who is part of the team tasked with leading the update, said since 2010 Whitefish has seen 30% of its homes used as second homes.

“Basically, they are not occupied by a full-time resident of your community,” Sullivan said. “Forty percent of the homes in your community are owned by people that do not have a local address; they are owned by people outside the area.”

The City of Whitefish in July began work on an update to its 2017 Strategic Housing Plan with the first step to update the Housing Needs Assessment. In addition to Sullivan, Seana Doherty of Agnew::Beck is working on the update.

While the study notes that adding housing is key, it also says that addressing housing needs is more than just adding supply, it is adding housing at the right price to support the resident and employee community.

“A dedicated supply of community housing for local households that live and work in the area allows local workers to compete against the strong outside demand for housing,” the study says.

The assessment says households making their living locally have been mostly priced out of market rate ownership housing simply because it’s gotten too expensive. Homes priced under $500,000 are scarce not only in the Whitefish area but also in neighboring communities as well, the assessment notes.

THE DRAFT assessment identifies four key trends in the challenge of housing affordability.

Wages are not keeping up with rising home prices and rents. The document states home prices increased by 17%, rents increased by 7-12% and wages rose by 5-7% over time.

“A common theme in communities, such as your area, is a shortage in the supply of housing that people making their living (here) can afford,” Sullivan said. “You’re competing with people with more resources, people that are cash buyers, and your wages just can’t keep up with a person earning a bunch of money in New York, for example.”

Rising regional home prices are a factor. The median sale price for a home in Whitefish in June of 2022 was $950,000 which represents a 197% increase since 2015-16. Home prices in Kalispell rose 243% with a median price of $650,000 and prices in Columbia Falls rose 174% in that same time period with a median price of $575,000.

The report says as the ability for employees of Whitefish businesses to find affordable homes in neighboring communities diminish, commuting becomes less of an option.

“Housing becomes an important competitive advantage to be able to attract and maintain the employees you need,” Sullivan said. “You have about 57% of your workforce that currently commutes into your area for work.”

Third, job growth and housing development are not aligned. Although Whitefish has added homes, prices and rents rose at historically high rates, availability dropped and local residents and employees struggle to afford and find homes.

Finally, the report mentions the loss of community housing — housing that is affordable for members of the community who live and work in the area with a range of income levels — because of the growing prevalence of short-term rentals, redevelopment such as apartments being lost to pending hotel development and the conversion of community housing units to market rate units.

The assessment shows that 71% of single-family homes in the Whitefish area are owned by local residents, but out-of-are ownership was higher for multi-family units. It also notes that in 2016, there were 529 active listings for short-term rentals and in 2022 there are 1,422, an increase of 160%.

In addition in terms of community housing, the denial of 137 proposed housing units since 2016 is also technically considered a loss. “Every project that is denied is a message to developers to not ‘risk’ using incentives, discourages public support, and hurts the ability to raise financing for housing,” the report notes.

The update does note some positives, including the rate of community housing development has increased since 2016, multi-family development has increased substantially in recent years providing more diverse housing options and Whitefish has been more active in addressing housing issues in recent years.

The city expects to gather public input on the draft plan. Then it will begin using the update to create strategies to address affordable housing.

A draft of the housing strategy plan is expected in October and both documents are set to go to City Council.

For more information visit https://www.cityofwhitefish.org/579/Whitefish-Housing-Refresh-2022