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Whether it's buying a home or renting, Juneau is one of the most expensive places in Alaska to put a roof over your head.
Over the last few years, home ownership has moved out of the grasp of a lot of Juneau residents.
Based on average Juneau wages, it took the pay of 1.9 wage earners to afford a standard mortgage in the first half of the year, according to the Alaska Housing Finance Corp.'s affordability index. That figure is up from the average wages of 1.8 people last year and 1.6 in 1998.
The index, based on a 20 percent down payment and no more than 24 percent of income going to mortgage payments, shows a steady decline in the average Juneau wage-earner's home-buying power. Down payments of 20 percent aren't common and most people pay 28 to 29 percent of the income toward mortgages, said Jan March, a loan processor with Residential Mortgage's Juneau office. Down payments are usually the least amount possible under a given loan program, she said.
Numerous federal, state, bank and private programs have developed to help people afford buying homes.
Edna Abbott tapped into one of several Tlingit-Haida Regional Housing Authority home-loan and home-improvement programs. She expects to close on her $175,000 home by Tuesday.
"I've already got my Christmas present," Abbott said. "I'm very lucky."
It also means her daughter Alesa, who turned 7 on Wednesday, will get her own room for a birthday present.
"Every day, she is like 'Mom, when are we moving?'" Abbott said.
Abbott, a state accounting clerk, said she heard THRHA had home ownership programs and went in to investigate.
Tlingit-Haida's main goal is to help tribal members, said spokeswoman Barbra Holian. But because of the source of some of the organization's funding, a few programs are open to nontribal members, a fact not widely known, she said.
The Juneau-based organization roughly splits its resources between subsidized rents and loan programs throughout Southeast, Holian said. Abbott is one of about 165 people in the loan program with another 750 people getting rental assistance.
After applying under a loan program and being approved, Abbott told Tlingit-Haida what kind of house she was looking for and the agency acted like a real estate agent, she said, showing her homes she might like. After rejecting two, she found a nice, three-bedroom house in the Mendenhall Valley.
"I'm definitely surprised how fast the process is," she said.
To get the down payment and closing costs, Abbott saved her Alaska Permanent Fund and Native corporation dividends and got a loan from Housing First to cover the rest. She found out about Housing First, a small, local nonprofit group, from someone at Tlingit-Haida.
"Always ask if anyone knows of any assistance available," Abbott said. "Just don't be afraid to ask."
For people who are in a Tlingit-Haida loan program, Housing First lends up to $2,000 to help with a down payment, said Betsy Longenbaugh, loan administrator at Housing First.
For people outside the Tlingit-Haida programs, the income-based Housing First program loans up to $25,000, interest free, with a forgiveness of 10 to 20 percent a year, depending on the amount of the loan, she said.
The program is finishing its second year of helping people in Juneau and the first year for Sitka.
A surprising number of people qualify for the program because of Juneau's high housing costs, Longenbaugh said. The program helped 30 people - slightly more than half were single mothers - this year with the $400,000 in federal money it received via AHFC, she said. The group, however, is out of money until about March when it should be funded again, Longenbaugh said.
"Thank God for these programs," said real estate agent Mike Race.
Programs such as Housing First and Tlingit-Haida have sprung from the rapid decrease in the affordability of homes in Juneau.
When AHFC began its affordability survey in 1992, 1.3 average wage earners were needed to buy a home in Juneau with the state averaging 1.4. Since then, the state average has gone up only one-tenth while Juneau needed another six-tenths of an wage earner to buy a home. Only Bethel is higher than Juneau on the affordability index, said James Wiedle, a research analyst with AHFC.
Meanwhile, Juneau's average wage and salary has gone from $31,475 in 1992 to $32,268 last year, a gain of less than 3 percent, said Neal Fried, a state labor economist. The number is derived from the total number of jobs divided by the total payroll, he said.
There might be light at the end of the tunnel for an average Joe and Joan to afford a house. The average price of homes sold in Juneau is going down, at least for the first half of this year, but how long that trend continues is a good question.
According to the AHFC's survey of lenders, the average price of single family homes sold in Juneau soared more than $16,000 in 1999 to more than $205,000 after declining slightly in 1998. For the first six months of 2000, the average price of homes sold dropped about $3,000.
The Juneau housing market is driven by government jobs. More than 40 percent of jobs are federal, state or local government. That creates a demand on the upper end of the housing market that developers meet, leaving a void at the lower end of the market, Wiedle said.
But unlike Anchorage or communities Outside, normal housing market forces aren't at play here. Juneau doesn't have the option of having a bedroom community where the commute is longer, but the land prices are less.
And with a closed system such as Juneau's, factors like the state economy can shift the supply of homes from an undersupply to an oversupply quickly, said Steve Gilbertson, land and resources manager for the city.
Wiedle said a number of factors determine the market value of single family homes. The four largest factors are pace of home sales, development costs, interest rates and income, he said.
Real estate agent Dutch Knight said business has been good. Knight, owner of Frontier Realty, said houses have been "popping off" the market recently.
Knight estimates that about 10 percent of the market is new homes, but there is a real shortage in the starter home market of about $150,000 and below. He blames that on the difficulty and cost of developing new properties.
Race, owner of Coldwell Banker Race Realty, also said developing new properties is difficult. A friend of his recently bought a lot for around $50,000, but then had to sink another $30,000 into lot preparation before he could even begin building, Race said.
There is plenty of land available for development, but the flat, well-drained, less costly land to develop is now mostly gone, city official Gilbertson said. In the 1960s and 1970s, the land was cheaper to develop and there were a number of developers who were building starter homes, he said.
City standards associated with new subdivisions - paved streets, curbs and gutters - add significantly to the cost of developing a property, Gilbertson said.
Another factor in building cost is materials, but if you think the cost of materials would be partly to blame for expensive homes, you'd be wrong. AHFC pegged Juneau as the second lowest of eight urban and three rural areas surveyed in its 2000 construction cost survey. Only Ketchikan beat Juneau on the cost of construction materials and the cost of transporting those materials.
A lot of people have too much debt or don't have the credit rating to own a home, but renting a place in Juneau isn't cheap either.
The annual March state rental survey by AHFC lists Juneau as the most expensive community for single family home and mobile home rentals, and the third most expensive in apartment rentals behind Kodiak and Valdez/Cordova.
The occupancy rate has improved the last few years, from less than 2 percent, where it was for seven years, but it remains at 5 percent. Prices have not gone down despite more vacancies on the market, said Amy Hiley, Juneau area coordinator of for AHFC's public housing division.
The HUD payment standard for a one-bedroom apartment is $843, according to AHFC information.
AHFC operates 145 family and 62 senior units in Juneau. The state-owned corporation helps another 275 families pay rent to private landlords, Hiley said.
Rental price relief is on the way, at least for a few people. acKinnon Apartments should become available by mid-January, said Nicole Hartman, manager. The efficiency and one-bedroom apartments will go to people who make less than 60 percent of the median family income for Juneau, Hartman said. Median family income is listed by the Department of Housing and Urban Development as $52,200 for a family of two.
The building, built in 1925, is undergoing a complete renovation to level floors and bring plumbing, electrical and other systems up to code.
Adding MacKinnon's 23 units should help relieve a little stress on the subsidized housing market, Hiley said. AHFC has more than 200 families (single people are also counted as families) waiting for one-bedroom units with more waiting for multi-bedroom units, she said. And while there are a number of subsidized apartment complexes near town, few are in the heart of downtown, Hiley said.
After two years in a subsidized apartment with her young daughter, soon-to-be homeowner Edna Abbott is just thankful to get out of a cramped apartment and into her own home, she said.
Abbott said she plans to start moving some of her belongings into the garage over the weekend, then take a day off after the loan closes to unpack and move in.
"I'm so excited, I'll be up all night."
Mike Hinman can be reached at email@example.com.