Alaska still pricey place to live, but it's cheaper than NYC

Posted: Thursday, October 18, 2007

ANCHORAGE - State economists say it still costs more to live in Alaska than others parts of the United States.

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The good news is that Anchorage, Fairbanks and Juneau are still cheaper places to live than San Francisco, New York or Honolulu.

While energy costs rose sharply between 2002 and 2006, the softening of the housing market appears to have put downward pressure on housing costs, state economists Neal Fried and Dan Robinson noted in the October issue of Alaska Economic Trends. Housing costs were up 2.4 percent in 2007, compared to 4 percent in 2006.

The annual article on the cost of living in Alaska measures the economy in two ways. The first is to measure the inflation rate, or the rate at which prices are increasing over time. For that, the Consumer Price Index is the authoritative source. The second is to measure the cost differences between locations.

While the CPI gives the most authoritative answer to questions about how much prices are rising over time in one location, determining cost differences between locations is a little more complicated, the economists said.

The economists said housing costs could be a good proxy for a community's cost of living when making geographic comparisons because they make up such a large share of total household expenditures.

A 2006 survey of rental prices in 10 areas around the state, conducted by the Alaska Department of Labor and Workforce Development for the Alaska Housing Finance Corp., showed that rent for both homes and apartments was highest in Juneau and lowest in the Wrangell-Petersburg Census area.

Median rent and utilities for a single-family home in the Juneau Borough in 2006 was $1,746, compared to $1,630 in the Fairbanks North Star Borough, $1,569 in the municipality of Anchorage, $1,350 in the Matanuska-Susitna Borough, $1,221 in the Kenai Peninsula Borough, and $960 in the Wrangell-Petersburg census area.

Apartment costs were highest in Juneau, where rent and utilities averaged $1,081 for 2006, compared to $950 in Anchorage, $800 in the Mat-Su borough and $740 in the Wrangell-Petersburg census area.

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