Renters balance life on the edge
Dianne Slater is hopeful she'll get an apartment next month. If a subsidized rental opens, as she suspects, she is most excited about laying her head on a pillow and feeling safe. Until then, when not working, she will continue to live in her van or stay at the Glory Hole.
Truth be told, it's scary sleeping in your car, she said.
The 55-year-old woman has been looking for an affordable apartment since returning to Juneau last October. Slater left Juneau years ago, after raising children, because of the city's high cost of living and unmanageable rents. She returned to live close to family.
Slater offers Juneau a question, how can an apartment that cost $375 in the 1970s cost $1,200 now?
"I realize the world is about profit," she said. "But the same person owns the building. It's paid for."
Slater is just one of those in nearly 2,000 Juneau households in need of an affordable rental in Alaska's most expensive market, where the average price of a two-bedroom apartment is $1,096 per month. Housing costs in Kodiak and Sitka are close behind, with two-bedroom apartments just $30 per month cheaper, according to Department of Labor statistics.
Nearly half the renters in Juneau cannot afford the apartments they live in, said Daniel Ungier, staff member of the Juneau Affordable Housing Commission. Even with prices as they are, less than 1 percent of the rentals in the city are vacant most of the time.
"Invariably, it means a squeeze that results in homelessness even for the working," Ungier said.
In the first two weeks of January, 60 people visited Stan Marston, program coordinator for the Juneau Homeless Coalition, looking for help paying the rent or utilities so they could avoid an eviction notice.
"An unexpected expense of even $100 will set them back in rent," Marston said. "Housing is not affordable."
In the last quarter of 2007, Marston took in 200 applications for rental assistance. He said only 40 were helped, with $18,000 in no-interest loans.
The Affordable Housing Commission has listed the low-income renter as those most affected by Juneau's high cost of living. Slater calls them the working poor.
"Unstable living attacks the psyche," Slater said.
By definition "affordable housing" means the cost of housing does not exceed 30 percent of a household's income. According to the commission, the average rate for a two-bedroom apartment in Juneau is $1,096 and for that to be considered affordable, the renter must earn a wage of $21 per hour.
The average wage of a renter in Juneau is $9.11 an hour, Ungier said. Even if a couple lives in that apartment, one of them will need two jobs, he said. Alone, it takes three jobs.
When people earning low wages slip financially, they join the homeless population of Juneau. Working families are the fastest growing demographic of the homeless population, Ungier said.
People need a living wage to pay the cost of living, said Tamara Rowcroft, general manager of the Alaska Housing Development Corp.
Recently Realtor Honey Bee Anderson told the commission that some homes in the $250,000 price range have dropped in price by about $15,000.
As the housing market cools and adjusts to new forces, rental prices are not expected to decline. Rowcroft has not seen rents drop once during the last 20 years.
"I've seen it level off," she said.
Last year the Juneau Assembly tasked the Affordable Housing Commission to research affordable housing issues in Juneau and make recommendations, which could bring some financial relief for thousands.
To date, the commission has primarily focused on lower-income home buyers and ways to create a stock of $200,000 homes in a city where half of the homes on the market exceed $300,000.
The city is beginning to incorporate zoning changes to encourage smaller homes in denser neighborhoods in an effort to reduce costs for buyers. And organizations such as the Juneau Land Trust are building affordable homes to sell even as they keep the land.
A smaller home sold on a smaller lot costs less, Ungier said. Solving the rental issue is just a more complicated task.
The real problem is affordable rentals don't make money for developers, he said.
Assistant City Manager Kim Kiefer is the city's liaison to the commission. The commission hasn't formally looked into affordable housing solutions for the renters, she said. Renters were just added to the list; at the next meeting they're hoping to begin formal work on the issue.
Rowcroft manages 96 subsidized apartments in Juneau for her parent nonprofit housing company. She said it's expensive to develop affordable rental projects and developing them for a profit is not a sound idea any longer. Affordable housing is best left to nonprofits, she said.
"There is nothing profitable about affordable housing," Rowcroft said. "It's a losing business."
Ungier is doing the research to find cost solutions for the commission. One way to lower costs is to increase supply. Unfortunately federal funding for housing projects is drying up, he said. In the past, grants, low-interest loans and tax breaks were enticements that brought for-profit developers into the affordable game.
Another concept is a city-administered trust fund that provides grant capital and low-interest loans to private developers in exchange for building affordable rentals.
Dale Pernula, Juneau Community Development Director, said the city is already laying the groundwork with sewer service extension to Peterson Hill and in North Douglas.
"If we want to allow for more multi-family housing we need to extend sewer service," he said.
The city also could allow denser development and taller buildings, and, if apartments are built on public transportation corridors, that could further reduce costs by not requiring as much land for parking, Pernula said.
"At this point the city has no recommendation to act on," Kiefer said.
• Contact Greg Skinner at 523-2258 or greg.skinner@juneauempire.com.
By the numbers
• Average rent on a Juneau two-bedroom apartment: $1,096.
• Average renter wage in Juneau: $9.11 per hour.
• Household income required to afford that apartment: $46,255.
• The number of hours a minimum wage worker must work each week to afford that apartment: 114.
Source: Juneau Affordable Housing Commission