The Municipality of Anchorage has a property tax base of $39.4 billion as of July 2015, according to the MOA tax accessor, who recently made a presentation at Dwell Realty’s monthly sales meeting. This tax base includes land stretching from Cook Inlet to Eklutna and from Turnagain Arm to Portage, including the Chugach National Forest. Within this area, there are 86,612 residential properties which have a total assessed value of $25.54 billion in 2015. There are 10,532 properties zoned commercial, representing $10.56 billion in tax assessed value. Personal property has 8,353 accounts and represents $3.29 billion in value.
However, you might be surprised to know that there are a number of exemption types both mandated by the federal or state government or optional as enacted at the local level. Mandated exemptions include cemetery, charitable, educational, hospital, religious, disabled veterans, senior citizens, housing authorities, native claim, veteran organizations. Optional include business personal property, spouses, widows/widowers of disabled veterans, military service connected death, charter schools, community purpose and deteriorated properties. Economic development also has optional tax exemption, although I am not sure what that definition includes.
Sixty-five percent of the tax base comes from residential properties which pays for schools, roads, police, fire, MOA staff, et cetera. But, despite its economic muscle and importance, housing always seems to take a back seat, or even ends up in the trunk, when it comes to municipal priorities, regulations and process schedules. Housing is hidden away in quiet cul-de-sacs, winding roads and tucked in nooks and crannies of Anchorage’s land base from Peters Creek to Potter Creek. Housing is not the ‘signature’ shiny buildings of downtown or mid-town but yet their tax base supports 65% of MOA’s infrastructure and expenses and bears the burden of continued tax increases. Yet, despite the promises of every new municipal administration, Anchorage continues its decline of record low building permits. Currently, Anchorage’s building permits are only 85% of last year’s which was a record low.
According to the 2016 Property Appraisal Annual Valuation Report, single family residences increased 2.5%. Duplex/Triplex increased 4.4%. Condos had a 2.8% increase and vacant land a negligible 1.7%. One way to ease the burden on the residential tax base would be to reconsider some of the optional exemptions enacted at the local level. As improved properties, these exemptions have access to roads, water, sewer and other utilities. Some choices are harder to make than others but certainly taxing deteriorated properties would be a good place to start the discussion. I’m not an economist but it seems like loosening the regulations for residential land development and new home construction would be a more viable alternative to increasing our revenue from taxes than continued tax increases, however how modest.