Business Intelligence

Business Intelligence

Anchorage’s housing appears stable, but there are challenges
Anchorage’s housing market is stable, which is a good sign in the current economy, but housing experts also call it stagnant in terms of the pace of new building needed to replace aging properties and to develop types of housing in demand in the city’s changing demographics. A lot of this came out in a presentation on housing in Anchorage on March 5 sponsored by Common Ground, a volunteer policy group. Real estate broker Janelle Pfleiger told the audience that Anchorage’s single-family residential sales price average was stable at $373,100 in 2018 with an average condominium price of $209,136. There are currently 569 units of both types on the market. The average time on the market for homes across all price points, up to $900,000, is one to three months and the inventory of homes appears steady across those price ranges, Pfleiger said. The market is stable, in other words, also tight.

There are some disturbing trends, however. In the last decade the inventory of homes priced around $100,000 – an affordable “starter” price for a young couple or a worker earning medium-scale wages – has dropped from 3,600 units in 2009 to 2,600 in 2018. This is an impediment for many businesses try- ing to recruit workers from out-of-state, or even to retain workers. The housing stock is aging with much of it built in the 1980s, and new homebuilding is at a low level. Against this backdrop is the changing nature of Anchorage’s population with more seniors desiring homes on single levels and near amenities like retail, parks and trails. Young people value homes of this type, too. However, the cost of new construction makes building housing with types of homes most in demand economically challenging.

Anchorage city officials are moving to address the need, at least in the city’s downtown core. The municipal assembly approved a 12-year tax abatement for multi-unit projects that are mixed-use, including commercial. The residential portion of the project would get the tax break. Some developers criticized the plan as too restrictive in applying only to the downtown.

Sign of confidence? New freight terminal under construction
In a signal of confidence in the state’s economy, Span Alaska said it will build a new 54,000-square-foot freight terminal in Anchorage to support the company’s operations. Span is owned by Matson Logistics and is the state’s largest freight forwarder and less-than-container-load shipper, handling 180,000 shipments of 400 million pounds yearly. The facility will be on a 16-acre parcel near Chugach Electric Association’s Southcentral Power Plant in west Anchorage. Foundation work is underway now and “vertical” construction of buildings will start soon, the company said.

Another positive note – personal income rising
New data on Alaska personal income show a 2 percent gain in 2017 and 3.7 percent gain in 2018, an encouraging trend after a 2 percent drop in personal income in 2016. The gain is a likely sign of gradual economic recovery but it is not all due to wage growth ¬– other sources of income are also a factor, state economists said. Data for 2018 is for only the first three quarters, the latest information available, but are compared with the first three quarters of 2017.

Alaska municipalities to coordinate sales taxes for online purchases
Amazon, the on-line retailer giant, is charging local sales taxes for purchases within Alaska municipalities that have sales tax. Residents of Juneau, for example, will see 5 percent tax added to the cost of on- line purchases. Skagway residents would see 3 percent added. The online collection stemmed from an initiative of the Alaska Municipal League following a U.S. Supreme Court decision allowing states to collect sales tax from retailers with no physical presence in the state. Amazon is also adhering to local variations in tax, such as Skagway’s seasonal changes in tax rate and local tax exclusions and caps. AML is now working to clear technical difficulties on the online collections.

Fairbanks moves to address its deferred maintenance
The Fairbanks North Star Borough is taking steps to address its backlog of deferred maintenance on borough facilities, some- thing the state of Alaska has yet to do. A new ordinance, approved unanimously by the borough assembly, requires 7 percent of local tax collections to go toward facilities maintenance. A backlog of several hundred million dollars in deferred maintenance has been estimated. Borough officials are developing a plan to tackle the problem, which will be presented to the assembly in coming months. Deferred maintenance on state buildings is meanwhile estimated at nearly $2 billion statewide, about half of which is in the University of Alaska system. The state has no plan in place to address the problem.

Eielson housing contractor still balks at local tax
Military Living, which provides on-base housing at Eielson Air Force Base, is still contesting local property taxes levied by the Fairbanks North Star Borough. The company operates 900 units of housing at Eielson and owes the borough $10 million in taxes, the borough contends. In its property tax dispute with the Fairbanks, Corvias Military Living argues it is not liable for taxes on base housing because it must relinquish ownership of the houses to the Air Force after 45 years, and thus is not a conventional private property owner. The borough and the state of Alaska, which oversees local property tax assessments, disagree. A lawsuit filed in the dispute is now before the state Supreme Court. The customary practice for private owner/operators of facilities on military bases is to negotiate a payment-in-lieu-of-tax, or PILT, with a local municipality.

Fairbanks teachers want new contract, raises
Amid the gloom on state funding for schools Fairbanks teachers and the Fairbanks North Star Borough School District have started meetings on a new contract. The Fairbanks Education Association, representing about 900 teachers in the district, has asked for 4 percent annual pay raises and supplemental retirement benefits. The teachers are also asking for extra pay for teaching large classes and improvements in working conditions. The district is offering 0.5 percent pay raises and status quo in retirement and health benefits. Contract proposals were also exchanged on two other education unions with contracts expiring June 30, the Fairbanks Principals

Association and the Education Support Staff Association. The three bargaining units represent about 1,750 employees, of which teachers are the largest group. Cuts to state education funding for school districts proposed by Alaska’s governor will affect negotiations.

Alaska federation of natives returns to Fairbanks in 2019
The big Alaska Federation of Natives annual convention returns to Fairbanks this October after being held in Anchorage for three years. The Interior city is also pitching AFN to be selected as host city for the 2020 convention. AFN’s annual gathering is one of the state’s biggest meetings, typically drawing several thousand people. It provides a big boost to local hotel, retail and restaurant businesses in the city where it is held. It is also one of the state’s most important forums for policy discussion and debate. Many business meetings are also held at AFN, in separate sessions. Alaska Native corporations are major business enterprises in Alaska, employing substantial numbers.

New Alaska tv series, this one actually filmed in state
Los Angeles-based film producers are working to develop a television series to be named “Sitka” set and filmed in the Southeast Alaska community. The story lines would be fictional but the production company, Driven Equation, hopes to develop a realistic portrayal of Sitka. The overall theme will be healing, a contrast with the kinds of films and reality-TV shows that have portrayed Alaska. Some of the seven supporting roles would be locals as will half of the production crew, the company said. A pilot show is planned to be filmed this spring which will be used for marketing the series. The company hopes to land a video streaming service, the first choice being Amazon.

Comments are closed.