What the future holds for Anchorage’s difficult housing situation

As a millennial living in Anchorage, I, like many of my friends, have struggled to find reasonably priced housing in a neighborhood that feels relatively safe. When my fiancé and I were on the market for an apartment nine months ago, we discovered that you don’t always get what you pay for. We finally settled on a 3-bedroom unit in midtown. When I placed an apple on our kitchen counter and watched it pick up steam as it rolled down our slanted counter top, it occurred to me that $1,450 a month might be a little steep. Of course, the over-sized water heater hanging out of our third bedroom’s closet and the subsequent signs of water damage from a leak are also hard to overlook. But this isn’t something that is unique to my apartment.

According to Developer John McGrew of Ship Creek Development, signs of wear are part and parcel of Anchorage’s housing boom in the 1980s.

“Alaska was kind of built on a boom or bust. It used to be that you would only build during the summer months and as an architect, it became a question of what can I fit on this piece of land and how fast can I get it built,” explained McGrew.

The speed with which many homes and apartment complexes were built coupled with many years of use means that they are severely in need of renovation. While it may be clear that housing improvements are necessary, the question of who should fit the bill becomes a bit murky.

“We wouldn't want to see a lot of subsidies because we already have subsidized affordable housing and that is a part of the market that's being taken care of. Other cities have found ways to incentivize development with tax abatements and tax increment financing in lieu of taxes but those are tools we don't currently have in our toolbox,” said Anchorage Economic Development Corporation’s Live.Work.Play Director Moira Gallagher. “We are working to find creative ways to help developers finance projects so that it's not a whole bunch of cost upfront, meaning the project doesn't ultimately come to fruition.”

Financing woes are something that are all too familiar to McGrew.

“The cost of building in Alaska is higher than the Lower 48 and so you have that challenge there. It's also hard to find land to develop but the cost of construction is probably the biggest challenge - you'd see a lot more development if you could make it work economically,” McGrew said.

There are some organizations like Alaska Housing Finance, Cook Inlet Housing and the Rasmuson Foundation that are financially helping to lead the charge towards improved housing in Anchorage, but finances are only one piece of the puzzle. Increasingly, millennials are leaving state and one of the reasons frequently cited is that the housing market isn’t keeping up with demand.

“We see a lot of demand for smaller housing, but we don't see developers building them and the reason is that it's too expensive. The developers right now in Anchorage don't feel that they could actually build a small unit like a micro apartment and offer it for anything less than the current high market rental rates. In almost every community that is successfully having an influx of millennials that doesn’t necessarily have affordable housing has small scale housing in the downtown core and we really want to focus on that,” said Gallagher.

Micro apartments aren’t exactly a new solution to solving housing deficits. However, in a state where we like everything big, the prospect of downsizing to a 268-square foot living space can be daunting.

To give Anchorage residents a taste of micro living, the Anchorage Economic Development Corporation hosted two different events that enabled individuals to create mock living spaces. By using a variety of scaled wooden boxes to signify everything from cabinets to toilets, participants crafted their ideal micro apartments.

“What was most noticeable when people were designing a living space, is how much space modern appliances take up. The first things to go were usually the washer and dryer, followed by the dishwasher. In terms of the must have appliances like a refrigerator and an oven, we only had medium sized options, but I heard quite a few people expressing that they’d be okay with smaller versions that would fit in the space better. Once you nix or downsize those appliances, getting everything else that you need in under 300 square feet doesn’t seem like a Sisyphean task,” said Anchorage Economic Development Corporation Communications Director Sean Carpenter. “There was definitely an attitude that they could be very happy living in a small apartment if it had all of the things that were necessary for them personally, or that they would be willing to give up something like in-suite laundry for cheaper rent or a convenient location.”

Another possibility that interests Gallagher is accessory dwelling units (ADU). More commonly referred to as mother-in-law apartments, an ADU is a room or set of rooms in a single-family home that has been designed or configured to be used as a separate dwelling unit and has been established by permit. Two examples would be an over garage apartment or a tiny house on the property of a larger single-family home. In recent years, Portland has become a beacon for ADUs, but this approach has been slow to catch on in Anchorage.

“We have fewer of these units in Anchorage than we'd like to see because our ordinances are restrictive. In particular, the maximum allowable size is 700 square feet. Many property owners would like to build mother-in-law apartments over their garage – but we're Alaskan's and our garages are bigger than 700 square feet,” laughed Gallagher.

Gallagher isn’t the only one who has an interest in developing the tiny home market.

“What I like about the tiny home market is that there are more design requirements and more thoughtfulness in putting them together because of the functionality - plus they are attractive and they are not all combined in one area without any amenities,” said McGrew.

“Right now, we're trying to show the community these new concepts would provide smaller scale housing and would be great for young professionals as well as seniors. These new housing options could help keep those individuals here and contributing to the economy, vibrancy and growth of our community,” said Gallagher. “Ultimately, we're hoping that through the advocacy Live.Work.Play. we'll see support for the kinds of initiatives that would allow for more ADU’s and would help incentivize micro apartments. These are real projects that could be happening in Anchorage to provide senior housing or workforce housing downtown and help fulfill a market need. These projects are not going to solve the entire problem, but it is a really good start.”

*Originally published by the Anchorage Press