Kalispell eyes affordable housing program

City may seek $4 million grant

The Kalispell City Council will vote Monday on whether to apply for federal money and team up with a local nonprofit organization to tackle an affordable housing project.

Council members appeared to support the idea at a Monday workshop session.

The money would come from the federal Neighborhood Stabilization Program, which allocated $19.6 million to Montana to help buy houses.

At least 25 percent of that money has to go to families that make 50 percent or less of the median state income.

A Montana family of four's median income is $55,700.

That means that $4.9 million - if not more -must go to families at or below the 50 percent median income mark. For a family of four, that translates to an annual income of $27,850.

The rest of the federal allocation to Montana can go to families earning up to 120 percent of the median income - which would be $66,840 for a Montana family of four.

Kalispell's city staff is thinking about applying for $4 million of the $19.6 million, since Flathead County tallied 35 foreclosures in the first three months of 2009 -the highest rate in the state, said Katharine Thompson, the city's community development manager.

Applying for $4 million does not mean that Kalispell would receive that entire amount, she said.

The council also will vote on whether to team up with Community Action Partnership.

Community Action Partnership has the contacts and expertise to quickly identify and obtain foreclosed homes as part of a community land trust, Thompson said.

Part of the federal program requires that the money be used to buy foreclosed homes, which have to be bought for at least 5 percent less than their appraised values.

Consequently, banks and mortgage holders will have to be recruited to help this program, Thompson said.

If the city and the Community Action Partnership team up, the proposed agreement calls for Kalispell to provide $18,000 while the nonprofit group would provide $24,000.

Interim City Manager Myrt Webb said the ongoing cost of managing this program -which would include a community land trust -could be more than the initial $42,000 investment.

He speculated that a one-mill levy might have to be taken to voters to raise $36,000 annually to manage the program.

Webb said it is unknown whether such a tax levy would be needed, but it must be considered if a best-case financial scenario does not materialize.

Under this proposal, the Community Action Partnership would try to set up a community land trust with city help.

In a community land trust, a nonprofit organization sells houses on top of the land but keeps ownership of the land.

The idea is to remove land costs from the price of a new home. Each sale also has contractual obligations so that if a house is resold, the price must remain within specific affordable limits.

These homes and lots can be bunched together or scattered singly around the area.

So far, two community land trust efforts are under way in Flathead County.

One is led by the Whitefish House Authority.

Another is the Flathead Valley Community Land Trust, which is being formed to provide at least several dozen affordable houses in the proposed 207-acre, 535-home Siderius Commons project, which was recently annexed into southern Kalispell.

State figures from 2006 showed that a licensed practical nurse, a police officer, an elementary school teacher or a retail salesperson would not come close to being able to afford a median-priced home in Flathead County, which would be $234,000.

Many in these occupations would be able to afford homes in the $110,000 to $140,000 range, 2006 state figures showed. Houses in this price range are rare in Flathead County.