OPINION: Anchorage needs more housing

In 2019, my wife and I, while expecting a baby, shopped for a new home. Anyone who’s looked at housing in Anchorage knows the drill. There’s not much on the market, and prices are very high for what you get. One affordable and attractive home we looked at seemed like a dream come true — until we realized that walking across the floor gave us the sensation of walking downhill, because the whole house had sunk on one side! Another one we briefly considered was a fixer-upper that would need $80,000 worth of work. We eventually found a very nice home in Bayshore that was built in 1982. Lucky for us.

Anchorage has a housing problem. Today, we build shockingly few housing units for a city of our size. Nationally in 2021, about five homes were built for every 1,000 people. In Anchorage, we added about one, while the Mat-Su region added seven. At the same time, average home prices in the city have climbed ever higher, reaching almost $470,000 last year, up from about $390,000 in 2019. In June 2019, there were about 2,000 homes listed for sale. In June 2023, there were fewer than 600. Yet the market hasn’t responded by building more homes. Why?

While I don’t agree that Anchorage is “out of land” (we’re a low-density city with vast parking lots), we don’t have many green fields ripe for new development. So buildable land is expensive, and sometimes needs to be redeveloped from some other use. Local construction costs are about 40% above the national average, which doesn’t help but also doesn’t stop homebuilders in the Valley where labor and materials cost about the same. Interest rates are high at the moment, but home construction was still inadequate when rates were low. Developers point to zoning and permitting requirements as major impediments to new construction.

Zoning is not solely responsible for our current housing situation, but it is certainly a factor. Until we find a way to push the Chugach mountains out of the way or build neighborhoods on stilts over Cook Inlet, land use regulation is one of the few barriers we can actually control.

Residential zoning mandates low-density building in most of Anchorage, with large minimum lot sizes. Attached structures like duplexes and triplexes are only allowed in some of the 13 different residential zoning districts. Apartments are strictly limited to specific areas. Housing formats such as townhouses, which make efficient use of land and are popular among young homebuyers, are not allowed in much of the city without clearing expensive and time-consuming hurdles. With limited land available, we should make the best use of what we have. All of this means that meaningful zoning reform needs to be on the table if we want to get serious about affordable housing.

The problem is well worth solving. High costs and low inventory encourage outmigration, making it harder for young people to stay (or people of any age, for that matter). Housing has probably contributed to Anchorage’s population loss, which has been even more severe than for the state as a whole. Research increasingly links homelessness to high housing costs as well. All of this hurts our economic potential and the depth of our workforce. It makes Anchorage a less livable place, despite our many strengths.

We shouldn’t overestimate the impacts of simplified zoning, both positive and negative. Taken together with other reforms that the Anchorage Assembly has enacted, such as allowing accessory dwelling units (ADUs) and the abolition of parking requirements, zoning reform can nudge us gently toward greater housing supply. More work needs to be done to incentivize multifamily construction through tax abatement and other mechanisms. The burdens we place on developers to build access and utility infrastructure should be reduced as well.

Opponents of zoning reform should also recognize that simplified zoning will not radically or abruptly change the face of existing neighborhoods. I hear fearful scenarios of high-rise structures sprouting like weeds in single-family neighborhoods, casting shadows on prized zucchini beds and flooding the streets with new traffic. I remind people that large residential buildings are usually not economical to build in Anchorage, especially if the developer has to buy and demolish valuable single-family homes to construct them. We probably won’t accidentally stumble our way to the kind of housing abundance that scenario implies.

More likely, simplified zoning will mean stylish new homes built on smaller lots as redevelopment opportunities gradually arise. Townhouses, duplexes, and triplexes will be easier to build and give a tight market some elbow room. Gentle density, achieved slowly, with a variety of price points, will help take luck out of the local housing market. That’s good for Anchorage.

Nolan Klouda is the executive director of the University of Alaska Center for Economic Development, and is a multigeneration Alaskan.

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