The Future of Housing in Anchorage

We all know that Anchorage is a multi-cultural town with over 140 languages spoken in our schools. But, did you know Anchorage is also becoming a multi-family community with over 300 to 500 multi-family and mixed use housing units planned over the next few years? If all the units proposed and under consideration by the MOA planning department are built, Anchorage will soon have hundreds of four to seven story apartment style units over first floor retail. The proposed R3A spot zoning in various designated locations around Anchorage is a pending ordinance before Planning and Zoning designed to facilitate more rental housing, both federally subsidized for low income residents as well as a splattering of market rate rental units. As part of the mix, some units may be designated as for sale condos.
 
I applaud any effort by the MOA to create more urgently needed housing in all sizes, shapes and price points but what I am most concerned about is the wide economic and social disparity between subsidized rental housing and luxury hillside homes and its long term implications for Anchorage as a community because there is not much in between when it comes to Anchorage housing. There are few new single family subdivisions coming online in 2018. Home builders are still struggling at the bottom of the permit barrel with only 141 permits thru August. Duplex permits, whether as a condo or single owner, also are low for a community our size. So why is this widening gap occurring?  One reason is because there are federal funds available for subsidized housing. Another is multi-family developers, again whether for profit or non-profit entities, have more financial resources to hire consultants to advocate for these projects, which show larger rates of return and provide as much as a 15 to 18% administrative fee back to the developer when federally subsidized. But, on the other side of the housing market, single family builders’ average profit is 6%, according to national statistics. 
 
I estimate that less than 10% of homebuyers want to live above a coffee shop. Millennials want to live in suburbia in a home like where they were raised. They want a single family home with a garage, fenced yard and three bedrooms. Today, the square footage of the home may be smaller and the lot like a postage stamp but it has a front door and a garage and you don’t have to walk up three flights of stairs or take an elevator to get to your front door. Boomers want the same thing but without the stairs. This is a basic misconception perpetuated by a select number of planners and developers who are proponents of mixed use. Unfortunately, if all goes as planned, it will create a wide social divide between those who can afford a luxury hillside home and those can’t with hardly any housing in between.
 
My advice to all buyers is if you are looking to buy a single family home, do so now. Because Anchorage isn’t going to have many more in the future unless building and zoning codes are changed to accommodate single family homes as well as high density mixed use properties.