OPINION: Rising home prices squeeze Alaska seniors

As recent data has highlighted, Alaska faces an intensifying housing crisis. The average price of a house in Anchorage is up 26% in the last 5 years, rents are up by similar margins, and interest rates remain high. Wages have not kept pace. There’s been lots of discussion of how that dynamic squeezes renters, young families, and those looking to buy their first home. But there’s another group facing financial pressure but getting less attention—seniors.

As home values rise, so do property taxes. Seniors, who often live on fixed incomes from pensions, savings and Social Security, struggle to keep up with these rising costs. Most working-age people see their incomes rise over time. That’s not true for most seniors, so these rising costs erode their ability to cover other essential expenses like food, utilities, and healthcare. A decade ago, the state provided $15 million in revenue support for the Municipality of Anchorage. This year it was $4.4 million. Next year it will be less. The state could reduce property tax burdens simply by restoring that funding to cities.

Similarly, insurance and upkeep costs rise as a home becomes more expensive. Higher insurance premiums are required to cover the replacement value of the property, and higher maintenance costs are justified to maintain the high value of the home. This is in addition to rising maintenance costs as the home ages. For people on fixed income, these rising costs again cut into their ability to pay bills on a day-to-day basis.

It’s easy to look at seniors and point to the value of their most valuable asset — their home — and write them off as financially solvent, but accessing that value can be very difficult for seniors. While many working-aged people might cash out some of their rising home value using a home equity line or by refinancing, banks are reluctant to lend to people without stable employment, including most seniors.

Put together, these factors contribute to a tight financial picture for too many Alaskans, particularly our elders who worked hard to make our great state what it is. I’m grateful to be in a position to address this issue, and I’m focused on doing something about it.

Rep. Donna Mears is the representative for House District 21, South Muldoon, in the Alaska Legislature.

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