Columbia Falls Short-Term Rental Rules and Teakettle Heights Development

Comparing Columbia Falls with Whitefish by median price alone leaves out two recent developments: a 421-unit subdivision approval and the city's short-term rental policy decision. Both took place this year and may matter to buyers evaluating the market.

Start with the number everyone quotes first. In a six-month stretch tracked earlier this year across the Flathead Valley's largest markets, Whitefish closed 169 homes at a median of $1,179,000. Kalispell closed 482 at $575,000. Columbia Falls closed 96 at $672,000, a price closer to Kalispell than to Whitefish, on a fraction of the volume. A separate May 2026 read from a local brokerage put the Columbia Falls median at $624,500, with an average sale price of $614,757 and homes spending a median of 73 days on the market. Different windows, different methodologies, but the shape holds: Columbia Falls sits meaningfully below Whitefish and close to Kalispell, on far fewer transactions than either.

That thinness is the part worth sitting with. A market that closes fewer than 100 homes in six months does not need much new supply or a policy shift to move. Columbia Falls got both this year, and the two decisions point in the same direction: toward growth the town is choosing to accommodate rather than restrict.

The Vote the Portals Don't Show You

In February 2026, city staff told the Columbia Falls Planning Commission that the city had 121 registered or permitted short-term rental units among roughly 1,930 residential properties. Ninety-eight were licensed. Ninety paid resort tax. In 2025, those licensed rentals brought in $3.2 million in gross revenue, which translated into about $96,000 in resort tax collected by the city.

The planning commission's response was to propose tightening the rules, modeled directly on Bozeman. Bozeman banned new permits for units where the owner does not live on site, grandfathering existing ones. According to a Modern Campground report, planning commissioner Justin Ping urged the Columbia Falls council to adopt the same approach, telling councilors the city should "be ahead of the curve and be as forward thinking as we possibly can" rather than wait until short-term rentals became as contentious here as they had in Bozeman.

The council did not take that advice. According to a Flathead Beacon report, at its April 6 meeting, it chose city staff's slower framework instead, opting to consolidate permitting and tighten enforcement without restricting new permits to owner-occupied properties. Existing permits stay in force. New buyers can still apply. The new fee structure is expected to take effect in January 2027, but the door to short-term rental income in Columbia Falls stays open in a way it does not in Bozeman, and in a way Ping's proposal would have closed here too.

For a buyer weighing Columbia Falls against a resort town with tighter STR rules, this is the detail that actually changes the math. A property here can still be purchased with short-term rental income as part of the plan. That optionality has a value.

421 Units Where the Aluminum Plant Used to Be

The second decision is bigger and more visible. On June 1, 2026, the Columbia Falls City Council approved Teakettle Heights, a 421-unit subdivision on 78.05 acres of former Columbia Falls Aluminum Company land along Aluminum Drive. It is the largest single subdivision the city has ever approved.

The unit mix:

• 125 single-family homes on detached lots
• 56 single-family townhouse sublots
• 240 multi-family apartment units, capped at 45 feet, closest to Aluminum Drive
• 26.3 acres of open space and park land, including a baseball field and soccer field, about a third of the total site

Developer Mick Ruis, who bought roughly 2,300 acres of the former CFAC property and plans to keep about 1,850 of it as a private ranch, has said he intends to sell the single-family homes for $550,000 to $600,000, below what comparable new construction fetches elsewhere in the valley, with an alternative financing package offering 2 percent down and a mortgage rate below market for qualified buyers. He has also said no bulk or investor buying will be allowed on those lots.

The zoning changed from county light industrial to city two-family residential to make this possible, and the density approved, 5.4 units per acre, sits within the 2 to 8 units per acre the city's growth policy allows for urban residential land. City Manager Eric Hanks told the planning commission the city has enough water and sewer capacity not just for Teakettle Heights at full build-out, but for several hundred additional residents beyond it.

Put next to a market that closed 96 homes in six months, adding 421 units in one project is not incremental. It is the kind of supply event that can reset what "affordable relative to Whitefish" means in Columbia Falls specifically, both by adding inventory at a defined price point and by shifting the mix of what closes here toward new construction rather than the older bungalows and gable-front homes that make up much of the existing stock.

What Buying Near a Superfund Site Actually Requires

Teakettle Heights has site-specific Superfund conditions that buyers may want to understand. The subdivision sits inside the roughly 960-acre boundary of the CFAC Superfund site, even though the EPA has determined the specific 78-acre parcel under development shows no contamination and poses no unacceptable risk for residential use, according to the agency's Record of Decision covering the Western Undeveloped Area. The worst of the historical contamination, arsenic, cyanide, fluoride and related byproducts from decades of aluminum smelting, sits to the east and north, where the plant's former landfills are located.

The planning commission built in specific conditions before signing off, and they are worth knowing if you are looking at a home in or near this subdivision:

1. According to The Daily Inter Lake, no water wells can be dug on the Teakettle Heights site. Homes will connect to the city's water main and sewer system instead, partly because drawing from the local water table could pull contaminated groundwater from the east into the development area.
2. According to The Daily Inter Lake, test wells drilled during the Superfund investigation that remain on the subdivision site must stay undisturbed, with access preserved for ongoing monitoring.
3. The subdivision's covenants, conditions and restrictions must disclose that the property sits within a Superfund site boundary.
4. The developer was required to obtain a letter from the EPA confirming good-faith progress addressing concerns the agency raised in a February 2025 letter, which noted that any development on the site must remain compatible with EPA cleanup actions and future institutional controls.

Meanwhile, the broader cleanup of the rest of the CFAC property is moving on its own track. In July 2026, the EPA and Glencore, CFAC's parent company, finalized a consent decree under which Glencore will pay $57.6 million toward remediation, with a public comment period that ran through early August 2026. Full remediation on the contaminated portions of the site is expected to begin in late 2026 or early 2027, the same window the new short-term rental fee structure is set to take effect.

None of this means a home in Teakettle Heights is a health risk. The EPA's own testing says otherwise for this specific parcel. But a title company, an appraiser and a lender will all want to see how the Superfund disclosure is handled in the CC&Rs, and a buyer comparing this subdivision to a comparably priced home elsewhere in the valley should ask about it directly rather than assume a portal listing will flag it.

Reading Columbia Falls Against Its Neighbors

The median price gap between Columbia Falls and Whitefish is one part of the comparison. In 2026, the city did not adopt Bozeman-style owner-occupied restrictions for short-term rentals and approved a subdivision on former CFAC land. Both decisions add context to the area's housing and rental market.

Together, these decisions give buyers additional context for assessing Columbia Falls alongside Kalispell or Whitefish.

If you are weighing a purchase here against Whitefish, Kalispell or another Flathead Valley town, consider how the short-term rental rules, subdivision and Superfund disclosure relate to your plans. Questions about financing or disclosures are worth discussing before you write an offer. Tyree Real Estate works with buyers across the Flathead Valley who need someone local to walk through exactly this kind of local mechanism before they commit. Work with us to start your Montana property search.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.