Affordable Housing Mitigation Requirements in Flathead County, Montana

From mandatory to voluntary: the Legacy Homes Program's history

In 2019, the City of Whitefish adopted the Legacy Homes Program, a mandatory inclusionary-zoning ordinance requiring that new residential developments needing a discretionary permit -- a conditional use permit or a planned unit development, specifically -- include 20% of new units as permanently affordable through the Whitefish Housing Authority, or pay a fee in lieu of building them. That mandatory version was short-lived: in 2021, Montana Governor Greg Gianforte signed legislation prohibiting cities statewide from requiring inclusionary zoning, forcing Whitefish to unwind its own program within about two years of adopting it.

Whitefish's response was to convert the Legacy Homes Program into a voluntary, incentive-based version: a developer can choose to make 10% of a project's units permanently affordable to moderate-income households (options include building the units within the development, building off-site, donating land, or paying a fee in lieu) in exchange for incentives such as increased density, additional building height, or reduced parking requirements. Because it's voluntary, a developer can also simply decline to participate and build under standard zoning with no affordability component at all -- a materially different legal posture than the mandatory 2019 version.

The program is still actively changing -- and hasn't produced for-sale affordable housing

The voluntary Legacy Homes Program remains a work in progress. In September 2024, the Whitefish City Council voted unanimously to raise the cost of the "fee in lieu of units" option, making the direct-unit or off-site paths comparatively more attractive to developers. The council has since directed the Whitefish Community Housing Committee to review the program further, meaning its specific incentive structure and fee levels should not be treated as fixed -- confirm the current terms directly with the city before relying on them in a pro forma. A 2025 Community Housing Needs Assessment documented a pronounced shortage of housing (both rental and ownership) for households earning 60-120% of area median income, which is the driving rationale behind continued interest in strengthening the program.

One outcome worth knowing if you're evaluating the program's real-world track record: reporting on Whitefish's housing efforts found that in the four years since the 2021 inclusionary-zoning ban took effect, zero affordable for-sale homes had been constructed in the city under any version of the program -- participation has run almost entirely through fee-in-lieu payments and rental units rather than ownership housing. If your interest in a Flathead County purchase is specifically tied to workforce-housing supply or resale affordability near Whitefish, that gap is worth factoring into your expectations.

No comparable program documented for unincorporated county land, Kalispell, or Columbia Falls

This page's research turned up a documented, actively-administered housing-mitigation program only for the City of Whitefish. No comparable inclusionary-zoning or voluntary housing-incentive program specific to unincorporated Flathead County, Kalispell, or Columbia Falls was found -- which is consistent with the 2021 state law's statewide ban on the mandatory version and each jurisdiction's own choice (or non-choice) about whether to build a voluntary substitute. If you're developing residential property in one of those other jurisdictions, don't assume Whitefish's Legacy Homes Program terms apply to you; confirm current requirements, if any, directly with the applicable city or Flathead County Planning & Zoning.