Is Alaska suffering from an affordable housing crisis?

Throughout Alaska, finding affordable housing is a challenge. Home construction and vacancy rates declined, while rental and mortgage rates and home prices rose.

The lack of affordable housing is pushing people into overcrowded homes, homelessness and out of state. Some officials have begun referring to it as a housing crisis.

Eric Peterson, 32, was born and raised in Anchorage. He lived abroad in Japan for four years and returned home in April, to the house he grew up in — with his parents.

Eric Peterson lived abroad in Japan for four years, returning to his hometown of Anchorage in April 2023. (Courtesy of Eric Peterson)

“I don’t have to pay rent, which is amazing,” he said. “Because the rent is out of control.”

He said he had a well-paying job and could afford a modest place in town for himself and his French bulldog. But he doesn’t think he’ll be in Anchorage for long. He said that in Japan he rented a nice apartment for $400 a month.

“Then I went back to Anchorage, Alaska, and they were like, ‘We want $1,400 a month’ for like, you know, some specials that were never redone in the ’80s,” Peterson said. “And I say, ‘I just – I’m not going to pay that. I don’t think anyone should. And I think the average rental prices for any form of housing in Anchorage, as well as the purchase price of anything, are completely out of control.’

According to state economists, the average cost of a home in Anchorage was about $469,000 last year. This reaches 20% in just a few years.

The cost of rent has also risen in recent years in much of the state, and in Anchorage in particular. According to state economists, the average rent for a two-bedroom apartment in Alaska rose 7% last year, the largest increase since 2011.

The cost of land, labor, materials and transportation have all gone up in most communities, said Brian Butcher, CEO of Alaska Housing Finance.

Brian Butcher, CEO of Alaska Housing Finance, discusses changes in the housing market from his organization’s headquarters in Anchorage on September 1, 2023. (Adam Nicely/Alaska Public Media)

“We’ve gotten to a situation where even now, even building market homes, developers can’t afford to build them and then sell them at the price they built them for,” he said. “That’s what makes housing prices go up.”

In addition, the cost of borrowing to buy a home has risen to its highest levels in decades. AHFC is a private agency that can tap into capital markets that regular lenders cannot. This way, it can offer mortgages to many Alaska homebuyers at better than market rates.

“For example, a year or two ago, 21% of the homes people were buying in Alaska were PHCC loans,” Butcher said. “This year it’s 34%. So we’re seeing more activity.”

In Soldotna, the non-profit organization RurAL Cap is overseeing the construction of nine homes. The construction workers who chop the wood and fire the nails together are also the owners.

Nine local families are working together to build nine homes through the nonprofit’s self-help mutual housing program. The program connects low-income families to low-interest mortgages backed by the federal government.

Each family commits to working 36 hours a week at home. Volunteers can contribute too. Their racial rights cover the down payments.

Rhonda Johnson learned about the program in 2009. She was working at Walmart at the time and was renting an apartment for herself and her four children.

Rhonda Johnson works with owners and builders in RurAL Cap’s self-help mutual housing program at a site in Soldotna on Aug. 31, 2023. Before working at RurAL Cap, she logged thousands of volunteer hours working on her own homes and in the homes of others through the program. . (Adam Nisley/Alaska Public Media)

“There’s no way I’m going to be able to buy a house,” she said. “Who has $30,000 to put down for a house? I don’t. It’s the effort, building your house, building among friends.”

It took about seven years before Johnson qualified, got on the waiting list and finished her house.

“And then I had friends and sons after me,” she said. “And I just helped build and build and I love volunteering.”

Within a few years, she logged thousands of volunteer hours in 45 homes. She won a National Volunteer Award in 2021. She now works as a RurAL Cap in the programme.

Rhonda Johnson of Soldotna poses with her National Community Action Recognition Award from the National Community Action Partnership at a ceremony in Boston in 2021. Johnson has volunteered thousands of hours to help build homes through RurAL Cap’s Self-Help Mutual Housing Program. (Courtesy of Rural Cap)

She said it was a complete job.

“Just to move in and be able to say it’s their home,” she said. “I built it with my own hands.”

The RurAL Cap Program has helped thousands of people since its inception in 1971.

But there’s a new construction technology on the horizon capable of dramatically lowering the cost of market-rate housing: 3D concrete printing.

Next year, Nome will serve as a testing ground for an automated system to lay the foundation, walls and roof of the house. The city and its partners are receiving a federal grant to build pilot homes to test the feasibility and economics.

A robot extrudes concrete in a demonstration of how 3D concrete printing can be used to build homes. The city of Nome, Penn State University, and commercial company X-Hab 3D are collaborating on a demonstration project to use the technology to build a home in Nome in 2024. (Courtesy of AddCon Lab, Penn State)

Barring disruptive technological breakthroughs, Alaskans like Eric Peterson are calling for loosening the rules governing what can and cannot be built as a more urgent path to affordable housing.

“A lot of Anchorage’s problems could be alleviated by providing cheaper housing,” Peterson told the Anchorage Assembly in July.

(Tags for translation)Affordable housing in Alaska

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