The housing crisis: Are we now an elitist community?

Posted: Monday, August 29, 2005

Where do I start? Crow Hill condos - 768 square feet, two bedrooms, one bath and 25 years old - are now selling for about $150,000. They were selling for about $90,000 just one year ago. Even at these low interest rates a single person with normal debt will need to be a range 19 state employee (about $4,000 a month) or better just to qualify.

That leaves about half of our citizens unable to qualify for even such a modest home as the above. These people will now need to rent. A two-bedroom apartment, much like the Crow Hill condo mentioned above, now rents for about $1,000 a month and the market is tight.

Because of this new pressure on the housing rental market, I expect rents to rise for the above apartments to about $1,500 a month within the next 24 months. This prediction is based on the fact that new fourplexes will cost about $700,000 to build, so to amortize the above loan, landlords will need to get in excess of $1,500 per month. Fourplexes have risen from $350,000 at the first of the year to $475,000. I know this because I sold most of them.

So, how is the Juneau Planning Department addressing this crisis? It continues to lower density zoning regulations (this increases housing prices) even though everyone knows to bring housing prices down they need to raise densities. In addition to making this very hard on many normal wage earners, the world environmental model for population increase is density increases, not urban sprawl.

The land along the back loop is the only decent land left to build on in our city, with water and sewer and easy site preparation. This is our most valuable land and the only land we can presently use to provide some relief for our children and our other unrich citizens by building affordable housing. This would require at least a D-5 (five units per acre) zoning though, which is normal neighborhood zoning and the zoning that was applied for recently. According to Juneau's Comprehensive Plan, this also was what the zoning was to transition to anyway when the sewer was installed.

The Planning Department, completely ignoring all advice to the contrary, and previous city planners, just rezoned this entire area to D-3 (three units per acre) and took 13 months to do so. The only houses one can economically build on this land are $500,000 homes. The Planning Department just created an elite neighborhood that will be of little use to solving our housing crisis.

In essence, we have this very serious housing crisis impacting the unrich and people of modest incomes needing affordable housing in Juneau, and the Planning Department takes the last few acres of easy-to-build-on land and gives it all to the very rich.

Have we devolved into an elitist community? Our Planning Department is paying no attention to affordable housing even though our Comprehensive Plan dictates affordable housing and a 15-year supply of land.

In two years, when houses are even higher in cost, rents have risen to $1,500 a month for a modest two-bedroom apartment and interest rates are most likely higher, how do we keep state workers here to staff the Capitol and provide teachers, nurses and other social support services when half the people in Juneau cannot afford to buy or rent a home?

Disclosure: I have been working on two applications with the city to change zoning, which is how I educated myself about this subject.

• Juneau resident Chuck Ramage is a Realtor and a retired state worker who has been coordinator for both the Office of Emergency Medical Services and the Office of Alcoholism.

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