Municipality’s homeless plan would have unintended consequences

Many people are concerned about two ordinances currently before the assembly: AO 2020-58 and AO 2020-66. Over the course of more than 12 hours, about 125 citizens voiced their worries in public testimony. There would have been more testimony if not for the pandemic, and had there been more public notice.

From a real estate professional’s viewpoint, these proposals are not well thought out and will have a multitude of unintended consequences. Below are some reasons why, and a suggestion for a solution.

AO 2020-58 will allow homeless and transient shelters in the B3 Zoning District by conditional use, which means without any review by the Planning and Zoning Commission. A quick search of the municipal tax rolls shows more than 3,950 properties listed with B3 zoning designations. This ordinance could allow placement of homeless and transient shelters in those properties, a change that will potentially affect the adjoining businesses and residential neighborhoods throughout Anchorage – completely undermining what was envisioned for the area.

The Planning and Zoning Commission plays an important part in the overall development of Anchorage. Its mission is to guide Anchorage land use development and community resources to meet the quality of life, economic, social, environmental, and physical needs of present and future residents. Good planning makes for livable neighborhoods, a safe and healthy community, and a sustainable economy. Land use fits with housing, transportation, community and economic development to give Anchorage its character.

AO2020-66 identifies four properties in different locations for two separate engagement centers to provide services for the unsheltered homeless, a treatment center with step-down housing, and a potential facility for use as housing with a resource center.

At a July 9 meeting on Zoom, an administration spokesperson indicated there was no evidence that these ordinances would lead to a decrease in property values. This is only partly true, because the Municipality doesn’t have the information. Anchorage is a non-disclosure city. Real estate sales data is gathered by appraisers and real estate professionals, but not shared with the Municipality.

We suggest that these ordinances could lead to decreased property values. We have proof that other types of external forces — crime, foreclosures, sex offenders, illegal drugs, even the neighbor with an unkempt house and yard — can decrease property values and stigmatize a business or residential neighborhood, sometimes in a snowball effect as one external force tumbles into another.

Homeless needs are more than just housing. A Longwood University study focused on treatment centers in Richmond, Virginia, and quantified the effect of residential rehab centers on nearby real estate values. The study sample was composed of residential listings in the real estate market between 2001 and 2011. The final data consisted of about 195,000 homes on the market, with about 111,000 homes that eventually sold. That community had 36 substance abuse treatment centers (half treated opiate addiction) located within the broader area, and nine were located within the city limits.

In the Longwood report, a Substance Abuse Mental Health Services Administration survey of over 14,000 facilities (with a 94% response rate) indicated many patients in residential treatment had a dual diagnosis: mental health and addiction. Some 39% of the clientele had this dual diagnosis. Combined, alcohol and drug addiction accounted for approximately 45%. Clients in treatment solely for drug abuse accounted for 34%-36% and 18%-20% of the patients abused only alcohol. A service provider will naturally want to cover the full range of services to ensure payment and profit from the broadest range of options.

The Longwood analysis concluded that values decreased 8% when properties neighbored a treatment center; but found a decrease as much as 17% if the center also treated opiate addiction.

Locally, the crime and drug component can be seen in a June 2020 mini-documentary, “The Last Stop on Karluk,” available on YouTube. This video shows how one small business owner continues to deal with issues stemming from the Brother Francis Shelter and Beans Cafe.

This is a live, continuing demonstration showing the unintended consequences of how surrounding properties will be impacted by crime, campsites, litter, feces and drug paraphernalia with passage of AO 2020-58 and AO 2020-66.

Please don’t be mistaken: I believe we need to solve the homelessness problem. However, these ordinances and the multiple locations are not the solution.

If the goal was to start a conversation, then it has started. But there has to be a better solution that won’t affect so many residents and business owners negatively.

For starters, the city should conduct a more thorough search for locations to consolidate services, not separate them. With so much of the homeless problem associated with mental health issues, perhaps the city should look at the mental health trust lands.

For example, the Alaska Mental Health is a state corporation that administers the Alaska Mental Health Trust, a perpetual trust, to improve the lives of beneficiaries. The Trust operates much like a private foundation, using its resources to ensure that Alaska has a comprehensive integrated mental health program. The Alaska Mental Health has a total of about 31 vacant lots and I believe are financially capable of constructing a consolidated state of the art facility.

I hope the Assembly and administration will realize the current patchwork of proposals will create even more problems from the unintended consequences.

Barbara Ramsey is a local associate broker specializing in residential real estate. She can be reached at info@ramseyteam.com.

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