The Juneau Assembly has offered grants to residents looking to build accessory dwelling units, often called mother-in-law apartments, since 2015. The goal was to promote housing construction in Juneau, especially for long-term rentals.
Last summer, they boosted the funding for that grant program. Now, it’s been six months since the Juneau Assembly approved 16 grants amounting to $13,500 each for residents who want to build accessory dwelling units on their properties.
Members hoped the grants would incentivize people to construct more housing. But the city’s housing and land use specialist, Joseph Meyers, said only one person has applied since the size of the grant more than doubled.
“You know, we are advertising it, and we’re putting it out there. I’ve had a couple of inquiries,” he said. “So there’s some interest, it might just be that there’s not a ton of knowledge of the program.”
The previous version of the grant only offered $6,000. So far, 44 residents have used the grant funding since it began in 2015. In total, it’s estimated there are more than 800 accessory dwelling units in Juneau.
In August, the city boosted the program to adjust for inflation and the rise in construction costs.
Meyers said the cost of building additions like accessory dwelling units can be spendy — upwards of $100,000 in some cases. He says the city grant won’t cover the entire cost of adding a unit — but he says it’s a start.
“The price of putting in an accessory dwelling unit has always been a little bit expensive. We really wanted to try to be able to cover more of the cost or to try to provide more for people to develop more units,” he said.
Assembly member Michelle Bonnet Hale supported increasing the grants back in August. Now, she said she is not sure why people aren’t biting at the opportunity, but one reason could be the high cost of construction.
“It’s just a drop in the bucket. Right? I mean, it depends if you’re just like converting a room or converting something above a garage or something — that’s one thing. But if you’re actually building something, that’s just a drop in the bucket,” she said.
Hale said restrictions may also dissuade people from building more housing. Accessory dwelling unit grant recipients can’t use the unit as a short-term rental for at least five years.
According to the 2023 economic indicator report from the Juneau Economic Development Council, renters in Juneau pay an average of about $1,400 per month.
On the flip side, the average rate for a short-term rental in Juneau is about $5,600 per month. That’s according to data from airDNA, a company that tracks short-term rentals in cities around the world.
The city has sent out press releases and social media posts about the program. But Hale said they’ll need to do more to promote it if they want more people to apply.
City leaders said there are 15 grants now available. More information is available on the city’s website.
