It’s spendy living in Alaska to start with, but a new study says Juneau is the most expensive place in the state to live.
While other places have higher energy or grocery costs, the combination of all those factors with Juneau’s high housing costs make the capital city the most expensive place in the state to live according to a new study by economists with the Department of Labor and Workforce Development’s Research and Analysis Section.
The annual cost-of-living study looked at a variety of costs facing Alaskans, including apparel, recreation, education and communication as well, although housing was by far the largest single expense for most Alaskans, the study said.
During the year the biggest single increase was in energy costs, which drive up costs for both housing and the second biggest expense, transportation.
“When you compare cost of living to incomes, all of our Alaska cities are above the national average, with Juneau highest at 139 percent of the national average, followed by Fairbanks at 137 percent, Anchorage at 130.6 percent and Kodiak at 127.6. By comparison, in the Lower 48 you have to visit major metro areas like New York City and Washington, D.C., to find higher costs of living,” said Labor Commissioner Dianne Blumer, a former Juneau resident, who introduced the study in the department’s monthly Labor Trends magazine.
While Anchorage has “relatively affordable” heating with its access to natural gas, Juneau heats mostly with fuel oil, which drove up costs in the last year, the study said.
While Anchorage edged out Juneau slightly in the price of single-family homes, its wages were much higher, making those homes more affordable.
“Higher earnings can offset home costs, though, and this factor makes Juneau the least affordable market.” Fried said in the study.
Average homes in Anchorage were valued at $329,000 last year, just above second highest Juneau’s $321,000, the study said.
The statewide average costs were $282,000, with the lowest housing prices in Alaska in Kenai and then the Mat-Su Boroughs.
To calculate how affordable those costs are, the study compares them to incomes, and determines that it would take 1.6 average incomes in 2011 to buy a house in Juneau, well above the 1.4 incomes needed in Anchorage.
Because of Anchorage’s proximity to the Mat-Su, the best housing deal was for an Anchorage worker to buy a Mat-Su house, which could be done with a single average income. Presumably, that would drive up transportation costs.
Rents in Juneau were also high, but not the highest in the state.
Buying groceries is assumed to require about 16 percent of family income in 2011. The study used an existing quarterly grocery price index for its calculations. That study calculated the cost in Juneau for a family of four with children ages 6-11 at $153.45 per week.
That amount was 108 percent of what the same groceries would cost in Anchorage, which was used as a base level for the state.
Other Southeast costs included Ketchikan at 122 percent of Anchorage’s level, Petersburg at 127 percent, Sitka at 141 percent and Haines at 147 percent.
Kenai tied Juneau at 108 percent for second lowest, while Fairbanks was just a bit higher at 112 percent. Highest in the state was Dillingham at 250 percent of Anchorage.
The cost-of-living study included some caveats in making comparisons, however, cautioning that many products available in the larger cities simply weren’t available for comparison in the smaller ones. At the same time, it also warned that the comparison didn’t account for the possible substitution of subsistence-harvested meats, berries and other products for those from the grocery store.
The study also used an existing energy cost survey to calculate costs of gasoline and heating oil, which it said were $4 and $4.31 respectively, for Juneau. Only one other Southeast community was listed, Hoonah, with prices of $4.39 for gasoline and $4.39 for heating fuel.
Communities such as Juneau and Hoonah, which are regularly served by barges, had lower prices.
Dillingham paid $6.25 for gasoline and $5.16 for heating oil, but highest in the state was Hughes, which paid $8.25 for gasoline and $9 for heating oil. In Hughes, fuel is delivered by air.
While Juneau had the highest cost of living in Alaska, it was only 10th nationwide, with several expensive cities, such as San Francisco and New York City both exceeding Juneau’s costs.
• Contact reporter Pat Forgey at 523-2250 or firstname.lastname@example.org