Anchorage Builders ‘Feel the Burn’ of the New Title 21

According to the Municipality’s own assessment, Anchorage annually needs 909 new housing units which include multi-family, duplex, and single-family. Since 2008, when they began the needs assessment, Anchorage has fallen far short on meeting the acknowledged goal, and this year will be no exception as local builders ‘feel the burn’ of the newly implemented Title 21 rewrite. Through February 2016, there has been only one duplex permit and thirteen single-family permits issued. This compares to twenty-one single-family permits and sixteen duplex permits issued the first two months of 2015.

Anchorage will continue its downhill slide of new housing units with no new activity in sight because, in addition to grappling with the new Title 21, homebuilders are also faced with the additional cost of the updated International Building Code of Standards which will require the re-engineering of every housing unit to be permitted in 2016. This new code is set to be approved by the Anchorage Assembly in April and if implemented will cost $1,200 just for the re-engineering of the plan by a certified designer, not counting the additional cost of construction for hold-down and sheer walls.

Just as builders are faced with the growing disconnect between new home values and resale, the home building community has been hit with the double whammy of Title 21 and the building codes. Although, quite frankly, we need the relocation inventory being brought on by Cartus and Brookfield Relocation Services during the coming months, the implementation of increased construction costs brought on by the promulgation of new regulations and restrictions couldn’t have come at a worse time for homebuilders. How many relocation homes will actually be coming on the market is still up in the air, but without a doubt Anchorage could use a couple hundred homes to help boost our sagging inventory.

Another reason why Anchorage continues to fall behind in housing inventory is our aging housing stock and its increased vulnerability due to fire. In 2015, the Anchorage Fire Department responded to one hundred twenty-seven residential fires or more than one every three days. Thirty-five of those fires were in multi-family dwellings affecting more than one occupant. Many of these fires were in older multi-family properties in East Anchorage where there is a disproportionate number of renters. The replacement of these units will only add to the increased cost of rent for many families as any property that is destroyed by more than 50% will also have to conform to the new Title 21 and hold-downs, et cetera.

No wonder renters and buyers are flocking to the Valley. In Anchorage, we have a single-family home on the market for every 572 people. In Eagle River, that number is one home per 248 people. But, in the Mat-Su Borough with a population of 100,178, there is a single family home available per 160 residents. Anchorage has a housing shortage and no number of relocation homes coming on the market will solve that problem.