My Turn: At what price affordability?

Juneau's economy, population slide is resulting in lower-priced housing

Posted: Tuesday, August 21, 2007

For the past several years, many in Juneau have pleaded for affordable housing. It's finally coming, but not because of public meetings or the money we've spent on a revised comprehensive plan or a couple of silly ordinances - or even the advisory committee members who have given hundreds of hours of their time looking for solutions.

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Unfortunately, we are achieving lower-priced housing in Juneau because our economy and population are headed south.

The recently released Juneau Economic Development Council report cites several "disturbing trends in Juneau's economy." These include: a flat to declining population over the last six years; an aging population; declining public school enrollment; a deteriorating personal income average and a steep increase in real estate inventories of homes for sale.

How did this happen?

It's not the recent talk about legislative sessions being held outside of Juneau causing the downturn. This situation began brewing at least 10 years ago. We've been losing ground for several reasons, beginning with housing costs. Housing has not been affordable in Juneau for years. Why not?

Assume you are a contractor seeking a building permit with tolerable conditions. It won't happen in Juneau. Space limitations prevent sharing examples here, but if you know a contractor, ask him (or her) why they quit building in Juneau. If you don't know a contractor, I can give you a list of folks who have given up working here because of the onerous conditions and delays that are inevitable with every permit application submitted to the city.

Now, if someone can't find an inexpensive place to live, it's hard to say "yes" to a job here. But what jobs can we offer?

Juneau's economic base is government, yet we have fewer state jobs every month and that job erosion has gone unchecked and unchallenged by our local leaders for more than 10 years.

The Kensington Mine, which would have created about 375 new jobs, will be delayed for years due to Southeast Alaska Conservation Council's lawsuit. I have not read a single My Turn by our mayor, Juneau Assembly members or our legislative delegation calling for SEACC to resolve its litigation. Why not?

The cost of transportation in and out of Juneau also is a factor in our sluggish economy. Both the former and current governor have made progress on a road out of Juneau, but it has received no support from our mayor or legislative delegation. There is no arguing the fact that a road out of Juneau would permanently stimulate the economy and give capital movers one less reason to attack Juneau.

While new "big-box" stores are opening, name one new major construction project set to begin in the next several months. There aren't any. If it weren't for tourism (and those cruise ships that Juneau loves to kick and tax), we'd be even worse off than we are.

Why are we building a new high school at the same time our school enrollment is in decline and our population is shrinking? Will we be able to finish building this school and then operate it within budget? Following the last bond election, the district superintendent said it was too early to tell if the school will be completed at the voter-approved amount.

Does this bring us to the fact we are finally achieving affordable housing in Juneau?

Consider this. Today, more than 200 single-family dwellings are for sale. Home sales are stagnant with many already on the market longer than 180 days. Sellers are slashing their asking prices, appraised values are tumbling and there are fewer and fewer buyers. The scariest part of this for taxpayers is that many recent homes have sold well below assessed value which will result in pressure on the Assembly to raise the mil rate to keep property tax receipts at their present level.

Remember 1986 and 1987? Home values tumbled and equity melted away. Well, here we go again. If we continue to remain passive about our economy, houses will become very affordable - except there will be few buyers.

Juneau's economic engine cries out for leadership that will give it a jump start!

• Errol Champion is an associate broker with Coldwell Banker Race Realty. He previously served two years on the Juneau Planning Commission and nine years on the Assembly.



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