Kalispell postpones expanding TIF funding use for workforce housing

For the time being Kalispell is shelving a proposal to expand the ability for workforce housing projects to apply for city funding.

City Council on Monday voted to indefinitely postpone a pair of ordinances that would have further enabled tax increment finance (TIF) funds for such projects.

Council split on the votes. Councilors Ryan Hunter and Jed Fisher voted in opposition, both noting that they’d prefer to vote to approve or deny the changes rather than on postponement.

City staff brought forward the proposal this summer, but City Manager Doug Russell on Monday said staff changed its recommendation.

“What we proposed was to expand an available tool and what we found was some differences of opinion about that,” he said. “We thought it might be wise to take a break on discussing workforce housing in the TIF district.”

Noting that Council routinely votes on topics it disagrees about, Hunter said he would rather vote than delay.

“I fear that if we postpone it now we will never see it again and we will lose a tool that could have helped in our community,” he said.

But Mayor Mark Johnson said TIF funds can still be used for infrastructure costs for housing projects while the city looks at other options for a “community-wide” housing program.

“This will allow us to set this aside for now so we can continue conversations,” he said.

The proposal would have updated two urban renewal plans to specifically allow for TIF funds to be made available for workforce housing, which is often used to indicate a program targeted at households earning too much to qualify for traditional low-income housing subsidies.

A developer can still ask the city for TIF funds to be directed to the infrastructure costs of a project, but the proposed change would have expanded that to allow for a developer to apply for funds as a way to assist with the vertical construction costs.

The proposal has been a source of contention amongst Council members. Some favored the proposal while asking for changes to it, still others maintained that it is unnecessary because developers can still apply for TIF funds for infrastructure, thus lowering the overall price tag of a project and resulting in reduced housing costs.

Councilor Chad Graham said TIF funds should be used for projects that invest back into the district and not for a “social program.”

The proposal also looked to set income parameters for who would qualify for the resulting housing units developed with the use of TIF funds.

City staff suggested funding focus on workforce housing for households in the 80% to 120% average area median income range. 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.

But the income parameters drew critique from both Council and the public.

Some Councilors wanted the income threshold to be lower than 80% AMI, while others said there should be no income guidelines to provide the greatest flexibility.

Several housing experts told Council they are struggling to assist those who need housing and fall below the 80% threshold.

Prior to the vote during public comment, Cassidy Kipp of Community Action Partnership of Northwest Montana applauded Council for delaying.

“I’m excited about having continued conversations about this,” she said.

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