The response of Alaska to the national housing crisis has been different from other states. In many regions across the nation the construction of new homes is moving up quickly to meet the demand.
But this isn’t the case in Alaska.
In a recent speech in the Sitka Chamber of Commerce, Nolan Klouda explained that Alaska is ranked 45th among all states for the number of new homes built per capita and is building around two new units per 1,000 individuals in the average. Inside the state Mat-Su was the highest of the list of new construction. Not far behind – which is not surprising – is Southeast.
“Sitka actually constructs lots more houses per capita than any other place in the state, excluding the Mat-Su in the Mat-Su, which is very interesting,” said Klouda. “This is adjusted for population density: Sitka is currently building around four units per 1,000 residents. I was surprised to see the fact that Southeast communities are among the top. Additionally, Haines, Ketchikan, and Skagway which are all above the average for the state, too.”
Klouda is director for the University of Alaska Center for Economic Development in Anchorage. He was in Sitka to take part in the chamber’s fall speaker series about housing.
The majority of the new residential being built in Sitka is result of a growth of the Southeast Alaska Regional Health Consortium. In general, Klouda said that projects such as employer-built housing and senior housing that is subsidized will boost the market for housing but they won’t necessarily bring the final outcome for buyers.
“Whatever the reason I believe that’s an overall positive thing,” he said. “I am still hoping to see more housing. However, Sitka is doing better than the majority of communities in Alaska in this regard although affordability may be a problem.”
Klouda blamed the affordability issue to the lack of land within the state, as well as high costs for construction, and outdated zoning laws, many of which were drafted when Alaska was not a distinct type of state.
“A majority of the time, the zoning process is designed to protect existing communities from being changed but it’s not about safety or health, or something similar,” Klouda said.
He was also hesitant to blame the increase in short-term rental rentals in Alaska for the expensive housing costs. Based on anecdotal information He estimated that 3 percent of Sitka’s housing inventory was held in short-term rentals. Klouda believes that the market for short-term rentals was adjusting to changes in the tourism industry faster than other forms of accommodation.
“So the problem isn’t that short-term rentals are bad,” Klouda said. “I believe it makes sense to have this type of income-generating supplement. I believe the problem in this regard is that every year, you’ll see increasing numbers of homes that are rented out as short-term rentals, as visitors rise. In the State, we don’t make a lot of hotel rooms nowadays. As a result, more of your housing stock is stored as short-term rentals. We also have low costs of construction (new housing) which means that increasing amounts of housing stock becomes basically the hotel.”
Klouda stated that he was concerned about the growing trend of short-term rentals getting out of control He also favors imposing caps to help ensure they are kept in check.
Nolan Klouda spoke at the Sitka Chamber’s Fall Housing Series on November 29.
