INSIDE REAL ESTATE: Landlords’ housing for homeless a positive in spendy market
Congratulations are in order to Cook Inlet Housing Authority and Weidner Apartments for their joint effort to provide housing and support for some of Anchorage’s homeless. It’s a small but important step forward between public and private partnership that perhaps other landlords in Anchorage will take to heart.
It’s similar in intent to the Section 8 housing voucher system that allows qualified renters to integrate into market housing through a federal subsidy program managed by the Alaska Housing Finance Corp. The integration of lower income and homeless into market housing allows for many social benefits and creates an opportunity for upward social mobility not available in “projects.”
This new program also recognizes the need for other than monetary assistance when it comes to socially integrating mixed income tenants, including job training and internship opportunities. It’s a significant partnership and should be applauded for its commitment to the community to help take some homeless out of camps and off street corners.
Fair market rent, or FMR, as determined by Housing and Urban Development in 2018, ranks Anchorage as 98 percent more expensive than other U.S. cities, which is a contributing factor to Anchorage’s homeless, many of whom have some limited income but not enough to have a permanent residence. FMR for a two-bedroom apartment, according to HUD, is currently $1,337 per month in Anchorage.
Efficiencies and studio apartments are $944. One-bedrooms have an average rent of $1,081 and the three-bedroom rate is $2,000.
Most of Anchorage’s rental housing stock was built between 1980 and 1984 when more than 18,168 total units were built. Compare that to the years 2015-17 when only 888 units were constructed.
Today’s landlords continue to struggle with aging properties requiring significant structural and mechanical repairs and more maintenance while at the same time, both landlords and tenants face increasing costs for gas and electricity as well as recently increased taxes on rental properties.
Although there is no data for 2018 available from the Department of Labor or Alaska Housing Finance Corp., other online data sources show that Anchorage has slowly seen a rising vacancy factor due to Alaska’s three-year recession.
Vacancy rates have slowly crept up from 2.6 percent in 2012 to 5 percent 2017, although nationally a healthy vacancy rate is considered 5 percent. However, just to keep vacancy rates in perspective, during the real estate recession of 1988, Anchorage vacancy rates were over 25 percent. During the recession of 2006-08, vacancy rates hovered around 8 percent.
Lack of newly built multi-family units over the past 10 years has kept Anchorage’s vacancies low or average with the nation. Anecdotally, 2018 has brought some minor rent concessions such as one month’s free rent or a longer time on the market, particularly with older properties that may have not been kept up by the small investor.
Anchorage needs more housing of all types. Most apartments built over the past 30 years have been two-bedrooms. Our changing demographics points to a need for new efficiency and three-bedroom units.