INSIDE REAL ESTATE: Anchorage’s housing shortage continues
Anchorage, Alaska’s largest metropolitan area, continues to face a housing shortage due to the lack of new construction activity that has been exacerbated by the implementation of the new Title 21 land use regulations.
As the chart demonstrates, new single family permits have been at a steady decline since 2013 and the decline from 2015 to 2016 is a whopping 50 percent. For the first quarter of 2016, Anchorage had only 26 single family permits, a historic low. Only 14 duplex units were permitted compared to 26 just a year ago.
The most dramatic decline, however, came in multi-family permits for new units. In 2015, there were 148 first quarter units permitted compared to only seven in 2016. This low number is particularly discouraging for moderate and low income residents and is indicative of struggle all market segments are having with the new regulations.
To put these historic low permit numbers into a wider context, let’s take a look at other communities with similar populations, some of which have also been affected by the struggling oil industry. Tulsa, Okla., has a population of 391,906 and for the first quarter had 118 new single family permits.
Arlington, Texas, has a population of 365,438 and had 66 single family permits. Both of these communities are influenced by the health of the oil industry and yet proportionately in relationship to the population are creating more new housing starts than the Municipality of Anchorage. The difference can only be attributed to our newly minted land use regulations.
Henderson, Nev., has a population of 257,729 and had 500 new single family permits for the first quarter of 2016. Nevada, in general, has had a rebound from the recession of 2008, and although one can’t expect Anchorage to have a comparable first quarter of single family permits, it has actually been years since we have had 500 new single family permits annually.
There is no easy solution to the problem that the planning department and the Municipal Assembly has created. Repeal is most likely not going to occur. Instead, hundreds of hours and thousands of consultant dollars will be spent trying to peel the onion off the over regulations, one layer at a time. And, as for all those purported homes coming on the market, as a result of oil industry layoffs?
We need them to fulfill the shortage of housing created by the new Title 21. It is not that lenders will not lend and builders are afraid to build, it is a simple fact that the new regulations are making it more expensive and creating delays to getting sticks in the air.