Consultant: City still has opportunity to address housing needs

Columbia Falls is at a key point in its housing situation, consultant Wendy Sullivan told the city planning commission last week.

“You’re in a pre-emptive spot,” Sullivan said. The city is still poised to be able to mold its housing into forms that could support the middle class as well as market rate buyers, she noted.

Sullivan and her staff recently completed a housing study for the city and surrounding area.

Right now, there’s a surplus of homes priced above $700,000 that the bulk of Columbia Falls residents can’t afford on the wages they earn.

Still, the economy in Columbia Falls is good and employers will likely need at least 230 more units just to house the 59912 workforce. If the city wants to address the number of people who commute to work, that number increases by 520 units.

Along with population growth, Sullivan estimated that the 59912 ZIP code will need about 1,400 units in the next 10 years if current trends continue.

Having said that, the core needs for the workforce are homes in the $200,000 to $500,000 range. This can be achieved, she noted, through a variety of different ways, such as working with Habitat for Humanity, which builds homes at reduced rates through sweat equity from buyers and below market interest rates.

Other ways are “density bonuses” which give a developer a break on costs if they agree to build higher density units as part of a larger project.

Attached units, such as townhomes or condos, for example, can oftentimes come in under the $500,000 threshold.

Sullivan noted that a single family, 1,500-square foot home costs about $583,000 in the current market, while many people in the area can only afford a $250,000 home. That’s a capital gap of $333,0000.

Sullivan told the commission that the city needs to figure out how to make up the difference, with the goal to tip the scales a bit against market forces. Working with employers is another option. She also suggested possibly using resort taxes or tax increment finance funds.

However, the city’s resort tax, in its current form, does not allow for housing.

The city could also tweak its annexation policy, so that a portion of an annexed development is required to have permanent affordable housing.

City planner Eric Mulcahy said another tool is the planned unit development, which typically have higher density housing on smaller lots with a common yard or other grounds.

An important aside is the $700,000-plus homes are largely second homes for more wealthy buyers. They typically don’t have children and by their transient nature aren’t always active members of the community.

Sullivan’s discussion with the commission last week was ostensibly part of a public hearing, but only one person, Shirley Folkwein, spoke. Folkwein appreciated the study, she said, but criticized the city for not getting the word out to residents about the hearing on its website or through other means.

She said the notice, unless one read the legal ads in the newspaper, was only a couple days before the hearing.

The commission members also appreciated the study.

“I think it’s a great tool,” chairman Darin Fisher said.

Member Justin Ping wondered if the study might be understated. With open market being above $500,000, does the city still need even more homes than what the study suggests, just to meet market demand? He wondered if the city actually needed 5,000 homes.

But Sullivan said no, perhaps 10% more than the 1,400 number, but not 5,000.

From a demographics standpoint, member Sam Kavanagh said the Columbia Falls housing situation is already being felt in schools, as enrollment is going down, meaning there’s a loss of families with children.

The housing study is just one part of the overall land use plan for the city required under the Montana Land Use Planning Act, which forces cities like Columbia Falls to re-think planning efforts and also looks to streamline development.

There’s still a chance for the public to weigh in on the study, however.

The city council will have a hearing May 5 at 7 p.m.