Housing hot spots

C. Falls, Kalispell lead 2006 subdivision development

The Daily Inter Lake

Subdivision development activity reached historic heights in Kalispell and Columbia Falls in 2006, even as it dipped to a five-year low in the rural portions of Flathead County.

Altogether, the valley's four planning jurisdictions gave final plat approval to 1,160 residential and commercial lots last year.

That was a 12 percent decline from the previous year, but it's still the third-highest total in county history.

However, different jurisdictions saw markedly different results.

Kalispell, for example, approved a record 582 lots in 30 subdivisions in 2006, compared to 420 lots in 60 subdivisions for the county.

This may have been the first time any of the local municipalities created more lots than the county. Kalispell Planning Director Tom Jentz said the results reflect recent policy changes that make the city more attractive to developers.

"Prior to about 2001, Kalispell's policies regarding annexations and sewer extensions weren't where they needed to be to embrace growth," Jentz said. "Since then, we've looked at every major service we provide - fire, police, stormwater, sewer, parks - and planned out three miles from the city limits. I think Kalispell has positioned itself to accommodate the growth that's happening around us."

One of the most significant policy changes occurred in 2003, when the Kalispell City Council started joining with private developers to encourage sewer line extensions.

Previously, developers had to pay the entire cost of extending sewer lines to their projects, without much hope of recouping that investment.

Consequently, they rarely were willing to extend the lines for any great distance, given the high cost of infrastructure.

That changed after the council adopted a "latecomers" fee program, which requires subsequent subdivisions to pay connection fees to the original developer, if they tap into the same sewer line.

Since the program was approved, Kalispell sewer lines have stretched west and south - sometimes for a mile or more - to reach new subdivisions. Discussions also have been held with developers who want to extend the lines north along U.S. 93 to Church Drive, and up Whitefish Stage Road.

"How long can we keep growing like this? That's the same question Bend [Ore.] and Boise asked themselves," Jentz said. "Do we want to be a Bend? I don't think we have a choice. The world looks at us that way. Kalispell didn't have to position itself to accommodate growth, but the growth will still come. We can say 'no' to the next project. But it's still going to come and it will go somewhere, because we're on someone's map."

Columbia Falls experienced its own unprecedented surge in 2006, giving preliminary plat approval to an all-time high of 469 lots - more than Kalispell and Whitefish combined.

(Preliminary plats are subdivisions that have received initial approval; they can proceed with building streets and installing utility infrastructure, but the projects may never come to fruition. Final plats have met all the conditions and the lots can be recorded and sold.)

Columbia Falls City Manager Bill Shaw had to double-check the numbers because they were so extraordinary. The city has seen a sharp increase in subdivision activity during the past few years, but the 2006 numbers were especially high - equal almost to the number of lots that went through final plat approval in the community during the previous 30 years.

"I can't believe we had more than Kalispell and Whitefish, but that's the kind of trend we're seeing," Shaw said. "We've had a latecomers agreement in place for six or seven years, which is probably one of our selling points. We also had quite a bit of excess [sewer and water] capacity, so we can meet the requests we've been getting."

Cheaper land prices may have played a role in the recent growth as well.

"Up until about 16 months ago, we had a reputation for less-expensive land," Shaw said. "That might not be true any more, but that's how developers thought about us."

On the opposite end of the spectrum, the rural portion of Flathead County dipped to a five-year low in 2006, both for final-plat and preliminary plat approvals and the number of subdivisions as well. The decline in preliminary-plat lots was particularly sharp, off by more than 60 percent from 2005.

Flathead County Planning Director Jeff Harris cited four possible explanations for the drop-off.

"We've had some large projects get postponed," such as North Shore Ranch, with 310 lots initially proposed, and Cooper Farms with about 700 lots, both in the Somers area, Harris said, "and we're reviewing projects in greater detail, so others have dropped out.

"Market conditions may have changed or softened as well. Also, much of the readily developable land has already been subdivided, so what's left is more marginal and presents greater challenges. Finally, some developers may have slowed down until they see what the new growth policy says. It's probably a combination of all these things."

The slowdown should help the county planning staff do more thorough, detailed reviews of new subdivision applications, he said, without cutting into the time set aside for long-term planning.

What the trend will be for 2007 is unclear, but the initial indication is more of the same: The Flathead County Planning Board only has one meeting scheduled in January, the first time in more than a year that it hasn't had multiple meetings (though this is skewed somewhat by a number of weekly growth-policy workshops held the last three months of the year).

Kalispell and Columbia Falls expect to see more major projects submitted.

In Kalispell, for example, there are at least 1,000 lots with preliminary plat approval for which developers have not submitted final plat requests - and that doesn't count three major projects that could total more than 4,000 units.

In Columbia Falls, Shaw said he's had conversations regarding projects that total roughly 600 residential and commercial lots, including about 400 residential units across from Midway Drive-In.

"We're telling them we have the [sewer] capacity," he said. "If all of these projects were to come in this year, they'd pay plant investment fees of almost $5 million. If the lots are built out over five or 10 years, that might increase to $6 million. That's the number [$5 million] that our recent facilities-upgrade study indicated we'd need to replace our capacity, so we think we're on top of it."

Reporter Bill Spence may be reached at 758-4459 or by e-mail at bspence@dailyinterlake.com