It seems Juneau may soon have an opportunity to move beyond the talking and hand-wringing phases of addressing its affordable housing problem, and take concrete steps toward new homes in the capital city.
Part of the reason for this is House Bill 264’s recent passage in the Legislature’s lower chamber with wide support. This measure — if it clears the Senate and is signed into law by Gov. Sean Parnell — would allow cities to change the timing in how they collect taxes on newly subdivided parcels of land.
Currently, if a large plot goes through the process of being subdivided, its value in the eyes of both the real estate market and the tax assessor’s office goes up — often way up, because it can now legally hold more homes. As state law is written now, the prospective developer is on the hook for that increase in taxes at the start of the next year, even though improving the land, building houses or commercial buildings and selling it is a process that can take much longer.
Under HB 264 — championed by Republican Juneau Rep. Cathy Muñoz and House Speaker Mike Chenault, R-Nikiski, and later co-sponsored by Juneau’s Democratic Rep. Beth Kerttula — the would-be builder can put off that increase in taxes while his or her subdivision is being built and the homes therein are sold. Here, “put off” doesn’t mean “not pay.” The developer still must keep current with paying the levy at the previously assessed value, and must make good on the difference when the property is sold. The difference is that, instead of being liable for the increase as soon as the property is reassessed, the developer can make those payments as the smaller pieces of land are sold. This breaks the payment up over the number of parcels the property is subdivided into, and defers them until they are sold — presumably when the builder is in a much better cash position to make them. A five-year limit on deferrals helps prevent this from becoming a tax haven for land speculators instead of the encouragement for building housing and commercial space Juneau needs.
Finally, the bill leaves the decision up to individual municipalities as to whether or not to create this incentive to build. If a city believes its coffers will suffer too much, or it doesn’t need to boost housing construction, then that town can choose to opt out. For a city and borough like Juneau, however, it may just give it a powerful tool to spur much-needed housing and commercial construction.
“This helps us have more development in Juneau, and we need it — we need more housing,” Kerttula said after the bill passed the house, and she’s right.
The other development that may lead to new housing took place at City Hall on Tuesday, when the Juneau Planning Commission approved new building height and housing density requirements in certain areas of town. Under that plan, buildings in three zoning areas — General Commercial, Light Commercial and Multi-Use 2 — could add many more housing units per acre, and could grow by one story to help accommodate that growth. Under the ordinance, General Commercial zones could hold 50 residential units per acre, up from the current 18, while Light Commercial zones would max out at 30 units, also up from 18 (Multi Use 2 zones would also see an increase in the maximum number of units they can hold, 80 instead of the current 60).
One intent of the plan is to make construction of new apartments and condominiums in those areas commercially viable. City planner Ben Lyman on Tuesday described the proposed maximum of 30 units an acre in Light Commercial areas as a minimum level needed to spur development.
“Right now residential development isn’t happening in our commercial zones because 18 units per acre just doesn’t work financially,” he said, based on his discussions with architects, developers, engineers and so on. “But at 30 units per acre, something changes. It allows them to build unsubsidized, affordable housing in Juneau.” If this proposal seems like a big change, that’s because it is. Planning Commission Vice Chairman Dennis Watson praised the plan Tuesday, calling it one of the most progressive in some time in Juneau.
Let’s hope it proves to be, because progress is needed when it comes to affordable housing in the capital city. At the end of the first half of 2011, the average cost of a new home in Juneau was $321,391, according to the Juneau Economic Development Council. The Census Bureau reported national average home price in June of 2011 was $273,100. Juneau’s rental vacancy rate in 2011 stood at 3.2 percent, compared to a national rate of 9.2 percent (again, according to the JEDC). And all of those numbers come at a time of flat population growth in Juneau, and doesn’t account for the growth the capital city will need in the coming years.
The housing issue in Juneau has been a problem sparking much discussion and little action for a long time. However, the city and state this week took practical and meaningful action to help the problem. The housing height and density ordinance will soon be in front of the City Assembly, and it’s likely, given Sen. Dennis Egan’s supportive comments about HB 264’s chances in the Senate, the tax deferral plan will be there as well. The Assembly needs to support these practical ways to alleviate Juneau’s housing crunch.
• Ward is deputy managing editor of the Juneau Empire. The views he expresses are his alone, and do not necessarily reflect the views of the Empire’s editorial board.
Comments (28)
Add commentmore handouts do not push people to provide for themselves
Juneau has a higher than national avg rental rate because it is a tourist town. The population doubles in the summer and those people aren't living in tents or buying homes and leaving them vacant for the rest of the year. Our genius elected boneheads want to misrepresent the facts as Juneau needing more housing and giving more handouts and side deals to builders.
Of course there's always use your pfd for a downpayment instead of urinating it away on shopping trips an vacations. No one needs to be concerned about devaluing the homes of people who were responsible, worked and saved to buy their started places.
We can just flood a limited market with freebies, further enforce Alaska's entitlement epidemic and harm people who have worked, saved and provided for their families.
At least the builders and politicians will profit.
Right Thing
Yuo hit it right on the head.The good old boys who own most off the land in j-hole wont let affordable housing happen.
Juneau Isn't Really Serious
About housing as long as the CBJ continues to utilize housing in the Marine View Apartments to harbor bureaucrats. That a structure built for human habitation is used for government offices neatly illustrates that talk is more prevalent than action when it comes to the subject of providing more housing.
More ownership is a good thing
And first-time buyers need more options. Condos, mobile homes, starter houses...whatever it takes to get buyers inside that first property.
I think....
I agree with Do the right thing on this one. While Latitude is correct and home ownership is good, it depends on what we mean by "affordable" housing. Are we talking rentals? Low-income housing? Unfortunately, these kinds of places are typically not well-kept, have junk and stuff in the yards, and police arriving in the middle of the night several times a week. (I know, used to live right across the street from some of each kind of housing) Not great for your property value, for those of us who saved, and worked, and kept our place nice in order to eventually afford something better.
Rather than just a handout to builders, can't we be more directive about what kinds of structures will be built for those receiving the handout, to make sure it's the right kind of housing?
How is cramming a bunch of
How is cramming a bunch of homes on small lots good for the public? Its not.
What would help the public?
How about bigger lots for less money, and lower prop. taxes or more city /state land for the public and less land for the mining and timber industry!
I say "hook" the developer and stop hooking the public.
@Jumpstart: population
@Jumpstart: population density most certainly is good for the public. Low-density suburbs are extremely wasteful.
Maybe instead of "more, more, more!" you should be looking at how to more effectively utilize what we already have.
might be good for you perk,
might be good for you perk, but I like having a little room on my $75,000.00 lot!
How is flooding the market
How is flooding the market with a bunch of lower costing "new" homes going to help the rest of us that worked hard, saved and bought the "older" but also "expensive" home as our starter home? Whos going to buy our homes when there are cheaper newer homes on the market?
This bill screws lots of people in Juneau that have paid their dues but it does help the developer. Also why cut taxes when CBJ needs revenue?
I think the bill should die and let the market forces work as they are supposed to.
Not a tax cut
@al97ct: Please re-read the article. The bill that passed the state House allows *deferral* of taxes due to an increase in the assessed value as the result of subdivision. The developer still owes all the increased taxes, but CBJ could opt to allow them to be paid as each lot is sold.
It's like when your bank allows you to skip a credit card or mortgage payment. You still owe the money - but you don't pay it immediately.
You claim to want to let market forces work, yet complain that the value of your older home might drop as a result of less expensive properties coming on the market. Guess what? That's exactly how market forces might work. Should the CBJ assembly instead pass an ordinance that all new housing must be priced at or above some level so as to preserve existing property values?
Madsen? Build something
Madsen? Build something nice? Has to be a rumor...
2 Questions - Isn't there a size limit for the purchased land?
It seems to me the legislature was considering a minimum land size of 5 acres for the purchase. Can someone please
clarify this? What if I have 2 acres and want to subdivide it?
Will this law apply in this case? And, I am wondering how the assessing people will track these purchases. Guessing owners will have to apply for it in a timely manner; ...an issue for the CBJ to work out I guess...My next question is: How
does this help with regard to affordable housing? The buyer will pick up the slack in the end...just saying...
@Roughcut
That must be just a rumor... Madsen has never let anything like permits slow up any of of his projects
Juneau needs lower income
Juneau needs lower income rentals and homes period. If your dogging on this I suggest you go and try to rent something being single and earning less then 25k a year. Throw in a child and you can't do it alone.
Not everyone has a degree and makes 75k. And that's the way it should be, we need homes for people that bag your food and watch your children.
It's also a stretch to call this a hand out. The amount of money it takes to buy land and front money to build on it is extremely high here and it won't get lower without something like this. There should be a dely on the tax increase as well, while its under development. You shouldn't have to pay tens of thousands of dollars until the property is actually worth that much. Finished product.
I would agree that the prices
I would agree that the prices of housing in Juneau is ridiculous. However, having just leveraged myself to the hilt to buy one of those ridiculously overpriced homes, I'm not terrible excited to have the city and/or state come in and make it so I owe more than its "worth". I worked my arse off to get where I am, struggling as a single income family to get to where we could buy a house. Something needs to be done, I'd just rather not get shafted in the process
awilkins - This is a “Bill”
awilkins -
This is a “Bill” that acts to spur development by deferring costs to the developer so it is not a natural supply/demand market force.
It's an incentive that works to increase wealth for developers while decreasing wealth of current home owners.
I agree its not a tax cut but the taxes/revenue are not available to CBJ for up to 5 years.
So let's only care about the
So let's only care about the people already "set" up. Sorry you might take a hit, but you at least have a home.
@hellojuneau1
There is no size requirement in the bill per se, but the parcel of land has to be subdivided into at least three pieces. So, it would need to be large enough to accommodate that.
Well Stu, I worked 20 hr days
Well Stu, I worked 20 hr days for five years straight to be able to do it. Anyone who is willing to do what I did, can have what I have. And yes, I currently have a home, but if the market changes such that I am upside down on my mortgage, I might not. What I hear a lot of, is people with one job, a big screen TV and a big cushy sofa who complain that they cant afford a house. Get off the sofa. Sell the TV. Go get several jobs.
Nice job Cathy
This is creative and functional! Kudos to Rep. Munoz for getting something solid in the works. It is a win-win situation for Juneau and actually addresses, rather than 'study', a major impediment to development.
Housing
I'll get flammed over this post, but what the heck! I retired a couple years ago and left Juneau. The primary factor was the overall cost of living, however housing and energy cost sealed the deal.
My children and grandchildren still live in Juneau. I'm reminded that my daughters must work two jobs to make ends meet.
I agree something must be done!
@kpawsuh: the couch and TV
@kpawsuh: the couch and TV will bring in maybe $300. You'll have to do more than sell relatively inexpensive furnishings to buy a house. Working 20 hour days for 5 years is also not realistic for most people, given the risk of, well, death.
Housing is expensive in Juneau. If you rent, you get gouged (although it does seem like there have been more inexpensive studios and 1 bedroom apartments lately). If you buy a house, it's expensive or it has a lot of problems. If you buy a condo, you get stuck with HOA fees for the rest of your life. If you buy a mobile home, you get stuck with the lot rent for the rest of your life.
The only truly cheap option is a houseboat. And houseboats kinda suck.
every single time I think I
every single time I think I might be getting ahead there is some Republican stepping on the working middle class for their little bit of pocket of change to help a developer.
Akstue- I am "set up" because I worked to be "set up". I did not just stick my finger in socket and got set-up. It took a long time of saving every freaking penny while "renting" for me to be able to buy my home and thats what everyone should have to do.
mwchristian- I stuck it out here in hopes of selling my modest 290,000.00 (what I have been hoping to get for it), older home all through the capital move talks and before then, now this crap.
I would support this bill if were only for appartments but thats about it.
For you home owners
A higher percentage of owners is in everyone's interest. The more investment people have in their community, the more engaged they are in its welfare. An involved citizenry is the foundation of democracy.
But on a more self-serving note, that guy who's building equity in that condo, mobile, or little shitbox townhouse may be the guy with enough equity to trade for your somewhat nicer place with a yard when you're ready to move on.
Madsen
Laugh or agree with the sniping about the Madsen projects but don't overlook the obvious: While many talk about housing, Madsen builds housing and without massive subsidies, grants or use of public funds.
Those who say "talk is cheap" are not either not paying for or paying attention to the endless round of bureaucratic and wonkish chit-chat that has not yielded much in terms of genuine housing.
At least Madsen gets something done, which is more than you can say about most of the housing advocates with the exception of the Roman Catholic Church which has built more housing for the needed than all the chattering class combined.
Apt Buildings
I'ld like to see a few real apt buildings in town. Take a six acre plot, devote 40 or 50 percent of it to parking and a Marine View or Federal Building type structure, and the rest to park-like landscaping. Do that three times and you've got plenty of 2-3 bedroom housing units. It could be cost-efficient, space-efficient, and attractive. This town could actually grow then instead of languishing as it has over the past five decades.
Right now we just have basically three classes living here. Those who have lived here for generations and inherited or made their fortune, those who have "made it" but are subsequently living close to the edge, and those who have "made it" by living off government largesse. I guess there's actually a fourth class, too....Weaving in and out of this town are many who come but find the area unsustainable for realizing their dreams and subsequently move on.
Do we have any industry in this town besides government, mining, and fisheries? Oh yeah. There's retail, tourism, and the Alaskan brewery. Beer, art, and a bit of processed fish are the only refined things we have to export. Everything else leaving town, except for people, is just raw material that gets turned into product somewhere else in the world.