Anchorage housing: addressing Anchorage's housing problems can build Alaska business.

• Author: Anderson, Tasha
• Position: SPECIAL SECTION: Building Alaska

Affordable housing is a problem in Anchorage. According to "Out of Reach 2015," a report published by the National Low Income Housing Coalition (nlihc.org), Alaska is ninth in the country in terms of highest wage required to rent a two-bedroom unit. According to their data, the Fair Market Rent for a two-bedroom unit in the state is $1,173; in order for Alaskans to pay 30 percent of their income or less on housing, they need to make $22.55 an hour--Alaska's current average renter wage is $17.47. Further, Alaska's minimum wage is currently $8.75, which translates to working 103 hours per week to afford a two-bedroom unit (again, assuming housing costs are 30 percent of a worker's income). In fact, according to the July 2015 Alaska Trends, a publication of the Alaska Department of Labor and Workforce Development (labor.state.ak.us/ trends/jul15.pdf), Anchorage residents "spend the most [of their income] by far on housing," averaging more than 40 percent.

Bill Popp, the Anchorage Economic Development Corporation's (aedcweb.com) president and CEO, says, "We are the 21st most expensive housing market in the United States, according to the Cost of Living Index." The July 2015 Alaska Trends says that Alaska ranks number four in terms of living costs, surpassed only by Hawaii, Connecticut, and New York.

The "Out of Reach 2015" Report looks specifically at several occupations, their average wages, and how those compare the Fair Market Rent for one-bedroom and two-bedroom units. Of the twenty occupations identified, only four (managers, nurses, teachers K-12, office supervisors) had an adequate average wage for two-bedroom units, adding only the work category of executive assistants when looking at one-bedroom units. A few of the occupations that don't make the cut are retail sales, office clerks, personal care aides, cashiers, fast food workers, waiters, bookkeepers, cooks, and teachers' assistants.

There's no doubt that Alaska's housing market has an influence on Alaska's businesses. "We have about 60 percent of businesses that respond to our annual surveys [2015 Annual Business Confidence Index Report] that tell us that the cost and availability of housing has affected their ability to either attract, retain, or both, workforce. When housing is becoming that significant in the minds of the business community, we really know that it's a more significant issue than it has been in the past," says Popp.

Housing Availability

The availability of housing is a specific, yet obviously related, difficulty in Anchorage. "Out of Reach 2015" states that the 2014 average apartment vacancy rate in Alaska was 3.2 percent, while a "healthy" vacancy rate is in the range of 5 percent. It's not just the availability of apartments that's low; according to the...