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Kalispell Council looks at plan for workforce housing funding

by HEIDI DESCH
Daily Inter Lake | August 22, 2022 12:00 AM

Kalispell City Council on Monday will take up a discussion on proposed changes to its urban renewal plans that could allow for workforce housing projects to be eligible for tax increment financing funds.

Council earlier this month moved the topic to a work session after several Councilors expressed concerns about proposed changes to the city’s Downtown Urban Renewal Plan and the West Side/Core Area Urban Renewal Plan.

The meeting starts at 7 p.m. in the City Hall, 201 First Avenue East.

Updates to the plans would allow for tax increment finance funds to be made available for affordable workforce housing projects. Workforce housing is often used to indicate a program targeted at households earning too much to qualify for traditional housing subsidies — those in the 80% to 120% of area median income or AMI range.

Since the adoption of the plans, Kalispell has experienced significant population growth. The changes are suggested to mitigate the effects associated with the rapid growth and address blighted conditions within the boundaries of the plans, notes Jarod Nygren, city development services director.

“This population growth has exacerbated housing shortages which were already reflected by near zero percent vacancy rates across the city for years,” he said in a memo to Council. “Identified workforce housing projects created within both plan boundaries would promote area housing and employment opportunities.”

Over the past decade Kalispell rental housing has been below 2% vacancy rate and at or near 0% vacancy rates at times, according to the city. Limited availability of housing has driven home prices and rental rates up by double digits such that wages are no longer sufficient to cover housing costs at 30% of household income — housing is considered to be affordable when it is no more than that percentage of the household’s gross income including rent or mortgage payments, utilities, property tax and insurance.

In Flathead County, the estimated area median income for a four-person household is $80,300. To be considered at 80% AMI, the same size household would need to earn $63,500. To be at 120% AMI, the household would be earning $95,300.

Some Councilors have expressed discomfort with the 80% to 120% AMI range saying not enough assistance is available to households below the 80% mark.

Based upon the income range and guidelines of affordability, a four-person household at 80% AMI would be able to afford $1,587 per month for total housing costs. The same household at 120% AMI, would be able to afford $2,382 per month.

A search of rental listings in Kalispell shows that a two-bedroom apartment rents for about $1,500 per month, while rent for a three-bedroom house is around $3,000 per month.

IN PREPARING for the upcoming state Legislature session, Council is set to discuss its legislative priorities. The list provides a unified platform for members of Council and city staff to use when addressing representatives prior to and during next year’s session.

The set of priorities for the last session included support of a local option sales tax, support for maintaining tax increment financing, support for streamlining special district legislation, support for legislation that mitigates the economic impact for increasing regulatory standards for municipalities, support for legislation that addresses infrastructure needs associated with rapid growth and support for legislation that provides for the effective management and use of land resources, support for legislation that provides options to enhance or improve service delivery for Kalispell, and support for legislation that provides funding and programs for affordable housing.

Finally, Council is set to consider whether the Parkline Trail through downtown should be reservable the same as other public open spaces such as Depot Park.

Features Editor Heidi Desch may be reached at 758-4421 or hdesch@dailyinterlake.com.

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