OPINION: Alaska’s new construction home rebate program benefits everyone

The topic of a housing shortage has become a popular headline in Anchorage, across Alaska and the U.S., as it’s one of the biggest issues we face as a community, state and nation. As a long-time member of Alaska’s homebuilding industry, I’ve worked to address issues within the housing sector my entire career. What drives the cost and availability of housing comes down to a complex set of criteria including local, state and national regulations, interest rates, price and availability of materials and land, and so much more. Housing market inventory also plays a big role — and there’s simply not enough housing for everyone.

Change is on the horizon, I hope, as our elected officials recognize they need to be part of the solution. Recently, the Alaska Legislature allocated $7 million for a new construction home rebate program. The program is set to head to the governor’s office for his signature. We’d like to thank our elected officials for their leadership in working to help find creative solutions on the issue of housing. This new program will benefit everyone.

Alaska needs more housing, and the only way to add housing to the market is by building new homes. Incentivizing homebuyers to build is the most effective way to add inventory. While this program is capped at $7 million, it could potentially result in more than $200 million in new energy-efficient housing statewide. For example, if the average new construction home price is $600,000 by offering a rebate of $20,000 as part of this program, Alaska homebuyers are leveraging the state’s investment at a 30-to-1 ratio.

When homebuyers choose to build they not only add housing to the market, they remove themselves from the pool of homebuyers bidding on existing homes. Alaska’s limited stock drives up home prices and creates competition. That’s why this program is limited to new construction. If a down payment rebate program were to be used for all housing, it would only create additional bidding wars on the limited number of available homes. Additionally, it would not incentivize adding new homes to the market. By limiting the program to new construction homes, it will exponentially expand the amount of dollars invested in Alaska’s housing stock.

Giving homeowners the keys to their new homes is the best part of our job. Homeowners are invested in their communities. They engage in community service, volunteer at our schools and contribute to our economy. Building homes is about building a better community for everyone.

Andre Spinelli is president of Spinell Homes and president of the Anchorage Home Builders Association.

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