National home ownership rates fell in the second quarter of this year, according to a recent report in the Wall Street Journal. The rate is currently 64.2%, down from 64.3% a year ago. Here in Alaska, the most recent statistic shows home ownership rate at 63.7%. That’s a slight increase from the 2017 rate of 63.5% but still below the national average.
But here’s the bad news. Anchorage’s home ownership rate is only 60.1%–well below the national and state ownership rate. What exactly does this number mean? Anchorage has a population of 291,538. Therefore, assuming the statistics are correct, there are 116,324 residents who do not own their own home in Anchorage. So where do they live? They are renting an apartment or room, sharing a single family home or doubling up in some way or are even homeless.
People tend to rent when there is instability in an economy—whether on a national and/or local level. Although Alaska is a wealthy state our inability to adequately and effectively govern our financial and natural resources has a recurring and negative impact on our low ownership rate. Unfortunately, even low mortgage rates hasn’t moved the needle to increased home ownership.
Adding to our growing housing problem is the lack of newly constructed multi-family housing. Over 82,000 of our multi-family units were built between 1990 and 1960. Even the ones built in the 1980’s are now almost forty years old! And it wasn’t until 1992 that new building codes began to recognize the need for more energy efficiency. These older units add to the renter’s cost for electricity and home heating. Many are beyond repair by landlords who lack the knowledge or financial capability to bring them up to a standard of acceptable living conditions.
But from 2014-15, there were only 668 multi-family units permitted. From 2016-2018 that number declined by over 30% to just 400 units. I would be curious to know if these numbers actually replace the units damaged or destroyed by fire and earthquake. Much of that decline is also a result of the Title 21 rewrite which required new design restrictions for multi-family units. Few developers can afford the time and consulting hours to work their way through the 836 single spaced pages of restrictions and requirements for a new build.
Anchorage needs a reset of its priorities. We are beginning to look like a worn out community and can no longer hide behind hanging baskets and bike paths. That beautification is only skin deep.
Visit me on Saturday in Heather Wood and Sunday in WestGate from 1-4 pm or email me with comments and questions at email@example.com.