Rents might be high in Juneau, but landlords say they've got bills increasing to the point that some are questioning whether this once-profitable investment is worth it anymore.
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"There is never any talk about what the cost to the landlord is. When people got into the business of private buildings (20 or 30 years ago) it was far more lucrative then than it is now," said Charlie Polk, who has been a landlord for nearly 35 years in Juneau. Now, he said, costs associated with running a rental are so high, profits are minimal.
Landlords have been hit with rising costs of fuel, water, sewer and garbage collection. Add to that, rapidly escalating property values are forcing owners of rental properties to pay much higher taxes, even though the city lowered the tax rate.
Chuck Ramage, a Re/Max of Juneau Realtor who has dabbled extensively in property management and often sells rental units, said he believes the city is approaching a crisis state as prices continue to increase.
"Three years ago (two-bedrooms) were about $950 a month. Now for a quality one they are getting $1,250," he said. "I really expect to see the rents go up 25 percent in the next 24 months."
Adam Tolles rents a two-bedroom apartment in West Juneau for a steal of a price at $850 a month, but he shares it with a roommate, a situation he would prefer to avoid.
"It is nice to have your own place. I've been looking for the last year," the Safeway employee said.
He's been searching for a one-bedroom under $700 - a feat he labeled as "extremely difficult" and was even forced into a hotel for a few weeks this past year before settling for not living alone.
A glance through the Juneau Empire's Monday classifieds shows a limited number of listings - 24 apartments, eight duplexes or condos and nine homes. The cheapest rental is a studio, with utilities included, going for $675 per month. The priciest homes are a four-bedroom Douglas duplex and three bedroom Mendenhall Valley home, each for $1,850, including utilities.
Juneau resident and landlord Mike McCuster has a completely remodeled three-bedroom valley duplex listed for $1,500, utilities included. McCuster owns a few other duplexes and an eight-plex in the area and said he has been forced to raise his rents roughly 8 to 10 percent in the past few years, just to cover increased costs.
"I think rents were pretty stagnant before fuel prices started to go up," he said. "Rents have been going up because costs have gone up by fairly big percentages. I made more money two years ago than I do today."
Anyone who got into the business nowadays, Polk says, would be a "damn fool because they'd wait about five months and go in the hole."
When Polk bought his four-plex, he used the revenue from one apartment to pay for the cost to maintain all four - which meant he was drawing income from the three remaining units.
It now takes rent paid from two-and-a-half units just to cover his bills - taxes, utilities and insurance, all of which are going up. Since he lives in one with his wife and three grandchildren, Polk's income is derived from just a half a unit. But Polk considers himself fortunate - unlike many landlords, his property is paid for, canceling out a monthly mortgage payment.
What's strange is that rents continue to rise - leaving some to wonder about where the money is going.
"Basically everybody is blaming it on the landlord, but the city has more blame coming to it than anyone else. My taxes are just atrocious," Polk said.
Yet while the percentage the city of Juneau collects has actually dropped in recent years - including one full percentage point from 2005 to 2006 - rising property prices in Juneau overall mean more money is collected on each property.
Jim Canary, Juneau's assessor, said that the city follows the market and levies taxes according to a property's current market rate - which increased 15 percent this past year. The city of Juneau collected about $3.5 million in real property taxes in 2006 compared with $1.5 million in 1995, according to city data.
This means that someone like Polk, who might have originally paid just $105,000 for his four-plex, is now paying his taxes based on a property value that has nearly quadrupled.
A majority of landlords in Juneau include utilities - minus electrical - in the price of rent, according to a recent survey by the Alaska Housing Finance Corp.
As prices rise for water, sewer, garbage collection and oil, property owners pay out more. Workers' compensation costs have increased insurance rates. And construction costs also are higher than ever before, according to another survey by the corporation, making maintenance a more costly endeavor.
Susan Jurgeleite manages the Cordova Heights apartments in West Juneau and said she is trying to get the building owners to force tenants to pay for maintenance.
"I told her we shouldn't have to unclog a drain three times in a year (for one tenant)," she said, relaying a story about a renter who once attempted to put an entire whole raw king salmon head in an apartment disposal.
Ramage of Re/Max said that another cause of higher rents is the general shortage of housing.
Currently, he said, there are no four-plexes on the Juneau Multiple Listing Service, the data system that lists all available properties in the area. Not only that, there is little land to build on and no lots with reasonable prices.
Brittany Retherford can be reached at email@example.com.
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