Legislature(2023 - 2024)ADAMS 519

04/19/2023 01:30 PM House FINANCE

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Audio Topic
04:20:03 PM Start
04:20:56 PM Presentation: Alaska Housing Finance Corporation Housing Programs
05:23:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 30 Minutes Following Session --
+= HB 40 APPROP: CAPITAL/SUPPLEMENTAL TELECONFERENCED
Heard & Held
+ Presentation: Alaska Housing Finance TELECONFERENCED
Corporation Housing Programs by Bryan Butcher,
Chief Executive Officer, and James Wiedle, Budget
Director
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 40                                                                                                             
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations   and   other   appropriations;   making                                                                    
     supplemental  appropriations; making  appropriations to                                                                    
     capitalize  funds;  and   providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
^PRESENTATION:  ALASKA HOUSING  FINANCE CORPORATION  HOUSING                                                                  
PROGRAMS                                                                                                                      
                                                                                                                                
4:20:56 PM                                                                                                                    
                                                                                                                                
BRYAN  BUTCHER,  CHIEF  EXECUTIVE  OFFICER,  ALASKA  HOUSING                                                                    
FINANCE CORPORATION,  introduced himself and  the PowerPoint                                                                    
presentation    "Alaska    Housing    Finance    Corporation                                                                    
Presentation to  House Finance" dated  April 19,  2023 (copy                                                                    
on  file). He  advanced to  slide 2  and indicated  that the                                                                    
mission  of the  Alaska Housing  Finance Corporation  (AHFC)                                                                    
was  to  provide access  to  safe,  quality, and  affordable                                                                    
housing to Alaskans.                                                                                                            
                                                                                                                                
Mr. Butcher  continued on  slide 3 which  depicted a  map of                                                                    
AHFC  locations   around  the  state.  The   locations  were                                                                    
primarily  public   housing,  but   the  office   worked  to                                                                    
administer  federal  Housing  and  Urban  Development  (HUD)                                                                    
projects,  low  rent  programs,  and  voucher  programs.  He                                                                    
reminded  the committee  that the  dividend the  corporation                                                                    
planned to pay for FY  23 totaled $23.4 million. He advanced                                                                    
to  slide 4  and  explained there  were  11 capital  project                                                                    
requests from AHFC  in the capital budget  and four requests                                                                    
in the mental health budget.                                                                                                    
                                                                                                                                
4:22:44 PM                                                                                                                    
                                                                                                                                
JAMES  WIEDLE,  BUDGET   DIRECTOR,  ALASKA  HOUSING  FINANCE                                                                    
CORPORATION,  continued the  presentation  on  slide 5.  The                                                                    
first  capital  project  request   was  for  the  Affordable                                                                    
Housing   Development  Program   (AHDP).  The   program  was                                                                    
requesting  $10,500  in  federal receipts  and  $500,000  in                                                                    
statutory designated program receipts. He read the slide:                                                                       
                                                                                                                                
     This   program   allows   AHFC's   subsidiary,   Alaska                                                                    
     Corporation  for Affordable  Housing (ACAH)  to develop                                                                    
     affordable   housing   units  throughout   the   state,                                                                    
     leveraging  a  variety  of available  funding  sources,                                                                    
     including the  Low Income  Housing Tax  Credit Program,                                                                    
     HUD Public  Housing Funds  (including the  Capital Fund                                                                    
     Program and  Moving to  Work Funding),  loan financing,                                                                    
     and other private resources.                                                                                               
                                                                                                                                
     Projected  Outcomes:  This  request will  help  provide                                                                    
     financial leveraging  for approximately 50-75  units of                                                                    
     newly  constructed affordable  housing units  depending                                                                    
     on the building locations within the state.                                                                                
                                                                                                                                
Representative Galvin asked  where the 50 to  75 units would                                                                    
be  located,  what the  size  of  the  units would  be,  and                                                                    
whether  the units  would be  intended for  families or  for                                                                    
single individuals.                                                                                                             
                                                                                                                                
Mr. Butcher  responded that the  ACAH program  was developed                                                                    
about 12 years prior and  it had more flexibility to develop                                                                    
housing than AHFC  itself. The initial model  looked at for-                                                                    
profit developers,  regional housing authorities,  and other                                                                    
resources  outside of  AHFC and  the corporation  decided to                                                                    
begin by  constructing the housing in  Anchorage. He thought                                                                    
that if  the program could  not work in Anchorage,  it could                                                                    
not work  anywhere in the  state. The  corporation developed                                                                    
88 affordable  housing units in  Anchorage: 70  units called                                                                    
the Ridgeline Terrace  complex and 18 units  near the Costco                                                                    
in east Anchorage. After the  project was determined to be a                                                                    
success, AHFC  decided to develop  housing in  the Fairbanks                                                                    
area. The  corporation was currently developing  50 units of                                                                    
senior housing and family housing  in Fairbanks, which would                                                                    
open during  the summer  of 2023, and  the remainder  of the                                                                    
units would open  in 2024. The current priority  of AHFC was                                                                    
to begin  planning housing projects  in more rural  areas of                                                                    
the state.                                                                                                                      
                                                                                                                                
Representative Galvin asked how large  the units were and if                                                                    
the  units were  standalone houses,  apartments, or  another                                                                    
type of building.                                                                                                               
                                                                                                                                
Mr. Butcher  responded that  the units  tended to  be larger                                                                    
buildings. He  thought that the smallest  development was 18                                                                    
units.  The size  of the  units varied,  but senior  housing                                                                    
tended  to consist  of one  bedroom  apartments. The  family                                                                    
units often  had two bedrooms and  sometimes three bedrooms.                                                                    
The trend  he had seen across  the state was that  fewer and                                                                    
fewer families needed larger units  and the units were often                                                                    
on the smaller side.                                                                                                            
                                                                                                                                
4:26:29 PM                                                                                                                    
                                                                                                                                
Representative  Hannan understood  that  a  unit of  housing                                                                    
could  potentially   refer  to   a  development   with  four                                                                    
buildings  if  the units  were  fourplexes.  She noted  that                                                                    
sometimes an  individual apartment was considered  one unit.                                                                    
She asked  if the  request would build  75 apartments  or 75                                                                    
developments.                                                                                                                   
                                                                                                                                
Mr. Butcher responded  that the term unit was  used to refer                                                                    
to a  single apartment. For example,  an 18-unit development                                                                    
would consist of 18 separate apartments.                                                                                        
                                                                                                                                
Representative Hannan asked for  confirmation that the $10.5                                                                    
million request would only develop 75 apartments.                                                                               
                                                                                                                                
Mr. Butcher responded  that it was a broad  number. The per-                                                                    
door costs  of apartments were  surging in all areas  of the                                                                    
state,  but the  problem  was particularly  severe in  rural                                                                    
areas.                                                                                                                          
                                                                                                                                
Representative  Hannan understood  Mr.  Butcher's answer  to                                                                    
mean that the request would develop 75 apartments.                                                                              
                                                                                                                                
Mr. Butcher responded in the  affirmative and noted that the                                                                    
cost was an estimate.                                                                                                           
                                                                                                                                
Co-Chair  Edgmon  asked  if the  modeling  for  the  project                                                                    
assumed the units would be first time venture housing.                                                                          
                                                                                                                                
Mr.  Butcher responded  in the  affirmative  and noted  that                                                                    
AHFC  had  to  start  the  modeling  for  the  project  from                                                                    
scratch.                                                                                                                        
                                                                                                                                
Mr. Wiedle  continued on  slide 6, which  was a  request for                                                                    
rental  assistance for  persons  displaced  due to  domestic                                                                    
violence,  also  known  as  the  Empowering  Choice  Housing                                                                    
Program (ECHP). The  budget request was for  $1.5 million in                                                                    
unrestricted general funds (UGF). He read the slide:                                                                            
                                                                                                                                
     Program provides transitional housing assistance (up                                                                       
     to   36   months)    for   individuals   and   families                                                                    
     experiencing domestic violence,  sexual assault, dating                                                                    
     violence, and  stalking. AHFC administers  this program                                                                    
     in the same  way it manages its  Housing Choice Voucher                                                                    
     Program.                                                                                                                   
                                                                                                                                
     Program  is  administered  in  collaboration  with  The                                                                    
     Alaska Network on Domestic  Violence and Sexual Assault                                                                    
     and  the  Council  on   Domestic  Violence  and  Sexual                                                                    
     Assault, who refer eligible households to the program.                                                                     
                                                                                                                                
     Projected  Outcomes: Rental  assistance for  up to  214                                                                    
     households statewide, displaced  from permanent housing                                                                    
     or  otherwise  at risk  of  displacement  because of  a                                                                    
     recent or reoccurring instance of domestic violence.                                                                       
                                                                                                                                
Representative  Ortiz understood  that the  requested monies                                                                    
would not necessarily be allocated  to current shelters. The                                                                    
funding  was  not  intended   to  further  develop  existing                                                                    
facilities, but to provide new  housing options. He asked if                                                                    
his understanding was correct.                                                                                                  
                                                                                                                                
Mr. Butcher responded in the  affirmative and added that one                                                                    
of the biggest  reasons a person would not  leave an abusive                                                                    
situation  or  would  return to  an  abusive  situation  was                                                                    
because of a  lack of housing. He explained  that AHFC would                                                                    
have a  voucher to  find an apartment  for an  individual or                                                                    
family in need  and a shelter would choose  the housing. The                                                                    
individual or family  could live in the housing  unit for up                                                                    
to three years.                                                                                                                 
                                                                                                                                
Representative Coulombe  asked what  the paperwork  would be                                                                    
like  for the  applicants.  She wondered  how intrusive  the                                                                    
process  would  be  and  if  there was  a  burden  of  proof                                                                    
requirement.                                                                                                                    
                                                                                                                                
Mr. Butcher replied  the shelters were more  involved in the                                                                    
application process than AHFC.  He deferred to his colleague                                                                    
online to provide more detailed information.                                                                                    
                                                                                                                                
4:32:03 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:32:30 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Edgmon  relayed that the individual  was not online                                                                    
and he would return to  the question once the individual was                                                                    
available.                                                                                                                      
                                                                                                                                
4:32:44 PM                                                                                                                    
                                                                                                                                
Mr.  Wiedle  continued on  slide  7  and reported  that  the                                                                    
request for  the Rural  Professional Housing  Program (RPHP)                                                                    
was  $1.75  million  in   AHFC  corporate  dividends,  $3.25                                                                    
million  in  UGF,  and   $500,000  in  statutory  designated                                                                    
program receipts. He read the slide:                                                                                            
                                                                                                                                
     This  program   helps  recruit  and   retain  essential                                                                    
     professionals   in   Alaska's  small   communities   by                                                                    
     providing  gap   funding  to  increase   rental  units.                                                                    
     Funding   awarded   through  a   competitive   process.                                                                    
     Eligible    projects     include    acquisition,    new                                                                    
     construction,  and  rehabilitation. Local  governments,                                                                    
     tribal councils,  nonprofits, school  districts, health                                                                    
     corporations,  native  corporations,  regional  housing                                                                    
     authorities,  and  non-profits  are eligible  for  this                                                                    
     program.                                                                                                                   
                                                                                                                                
     Projected  Outcomes:  Program   expected  to  fund  the                                                                    
     development,  rehabilitation, or  acquisition of  up to                                                                    
     22  units  of  housing   in  10-15  of  Alaska's  small                                                                    
     communities.                                                                                                               
                                                                                                                                
Representative Galvin  asked for  the definition of  a small                                                                    
community.                                                                                                                      
                                                                                                                                
Mr. Butcher  responded that AHFC's  definition of  rural was                                                                    
the same  as the state's  definition of rural. He  could not                                                                    
remember the exact definition, but  it referred to a smaller                                                                    
community on the road system.  He relayed that there had not                                                                    
been any development through RPHP  in the larger communities                                                                    
in the  state such as  Anchorage, Juneau, or  Fairbanks. The                                                                    
program had  existed for about  15 years and had  built over                                                                    
500 apartments  in over  80 communities,  and most  of which                                                                    
were small communities. He would  provide the committee with                                                                    
a map of the developments.                                                                                                      
                                                                                                                                
Representative Galvin appreciated  the explanation and added                                                                    
that if the  program fit into the map on  slide 3, there was                                                                    
no  need for  Mr. Butcher  to follow  up with  her. She  was                                                                    
grateful to know that the  program was developing housing in                                                                    
smaller communities with deep needs.                                                                                            
                                                                                                                                
Representative Stapp asked if  the corporation was providing                                                                    
block  grants  to  various housing  authorities  and  school                                                                    
districts in  rural Alaska to  assist in the  development of                                                                    
new housing units.                                                                                                              
                                                                                                                                
Mr.  Butcher responded  that there  would  be a  competitive                                                                    
process once more was known  about the funding availability.                                                                    
He explained  that AHFC  almost always  provided a  loan for                                                                    
rural  housing  projects and  it  was  then determined  what                                                                    
portion of the money could  be paid directly and what amount                                                                    
needed  to  be supplemented  with  gap  financing. In  rural                                                                    
Alaska,  the  combination  of debt  and  gap  financing  was                                                                    
typically not sufficient to complete a project.                                                                                 
                                                                                                                                
Mr. Wiedle  continued on slide  8, which detailed  a request                                                                    
for  $500,000   in  AHFC  corporate  dividends   for  energy                                                                    
efficiency research. He read the slide:                                                                                         
                                                                                                                                
     Funding for research, monitoring and testing of energy                                                                     
     efficiency   designs,    products,   and   construction                                                                    
     technology in Alaska's homes and public facilities.                                                                        
                                                                                                                                
     Projected   Outcomes:   Program   will   generate   and                                                                    
     disseminate  empirically  based   evidence  on  energy-                                                                    
     efficient  design of  homes in  Alaska to  the building                                                                    
     industry and the public.                                                                                                   
                                                                                                                                
4:36:31 PM                                                                                                                    
                                                                                                                                
Representative Galvin  asked whether AHFC  collaborated with                                                                    
the  Cold   Climate  Housing  Research  Center   (CCHRC)  in                                                                    
Fairbanks.  She  wondered  if the  corporation  assisted  in                                                                    
funding projects.                                                                                                               
                                                                                                                                
Mr.   Butcher  responded   that   CCHRC   was  AHFC's   most                                                                    
significant partner  in Fairbanks.  The two  entities worked                                                                    
together  to  determine  the   focus  of  energy  efficiency                                                                    
projects in the area. He relayed  that due to the variety in                                                                    
climates in  Alaska, there  were more  logistical challenges                                                                    
than in other states.                                                                                                           
                                                                                                                                
Co-Chair  Edgmon  noted   there  were  testifiers  available                                                                    
online   to   answer   Representative   Coulombe's   earlier                                                                    
question.                                                                                                                       
                                                                                                                                
Representative Coulombe would follow  up with the testifiers                                                                    
offline.                                                                                                                        
                                                                                                                                
Mr.  Wiedle continued  on slide  9, which  detailed a  $1.75                                                                    
million request  in AHFC corporate  dividend for  the Senior                                                                    
Citizen  Housing Development  Program (SCHDP).  He read  the                                                                    
slide:                                                                                                                          
                                                                                                                                
     Funding  for  development  of  senior  citizen  housing                                                                    
     units  and  accessibility   modifications  to  seniors'                                                                    
     residences.                                                                                                                
                                                                                                                                
     Program   provides    competitive   grant    funds   to                                                                    
     municipalities,    public    or   private    non-profit                                                                    
     corporations,  and  regional  housing  authorities  for                                                                    
     housing    acquisition,     new    construction,    and                                                                    
     rehabilitation  of   senior  households   with  low-to-                                                                    
     moderate income.                                                                                                           
                                                                                                                                
     Projected Outcomes:                                                                                                        
         Development of up to 80 units of senior housing                                                                     
         Accessibility modifications on up to 27 units of                                                                    
          senior housing                                                                                                        
                                                                                                                                
Mr.  Wiedle  continued  on  slide 10  and  the  request  for                                                                    
federal  HUD  HOME  Investment Partnerships  Program  (HOME)                                                                    
grants.  He  relayed  that  the   funding  request  was  for                                                                    
$750,000  in  AHFC corporate  dividends  and  $4 million  in                                                                    
federal receipts.  The funding  was provided by  HUD itself.                                                                    
He read the slide:                                                                                                              
                                                                                                                                
     Expand supply of affordable,  low- and moderate- income                                                                    
     housing  and strengthen  the ability  of  the state  to                                                                    
     design  and implement  strategies  to achieve  adequate                                                                    
     safe, energy efficient, and affordable housing.                                                                            
                                                                                                                                
     Projected Outcomes:                                                                                                        
         Fund up to fifty-four units of rental housing;                                                                      
         Finance 15 single family units through the                                                                          
          Homeownership Development program;                                                                                    
         Assist up to 11 lower-income homebuyers by                                                                          
          providing   down   payment    and   closing   cost                                                                    
          assistance                                                                                                            
                                                                                                                                
Representative  Coulombe  asked  how the  projected  outcome                                                                    
numbers were derived.                                                                                                           
                                                                                                                                
Mr. Butcher responded that the  AHFC used the data from past                                                                    
years  to  make  projections  for  future  years.  The  HOME                                                                    
program  allowed for  flexibility and  the projections  were                                                                    
broad because the actual numbers had not yet been released.                                                                     
                                                                                                                                
Representative  Coulombe asked  if  the money  was going  to                                                                    
municipalities.  She  thought   that  the  Anchorage  Health                                                                    
Department  (AHD) received  monies from  the HOME  grant and                                                                    
distributed the funds accordingly.                                                                                              
                                                                                                                                
Mr.  Butcher responded  that the  municipality of  Anchorage                                                                    
was the  only community in  Alaska that was large  enough to                                                                    
qualify for  HOME funds.  The funds  in Anchorage  were used                                                                    
specifically for Anchorage itself.                                                                                              
                                                                                                                                
4:41:21 PM                                                                                                                    
                                                                                                                                
Mr.  Wiedle continued  on  slide 11  and  detailed the  $3.2                                                                    
million  request in  federal receipts  for  the HUD  Capital                                                                    
Fund Finance Program (CFFP). He read the slide:                                                                                 
                                                                                                                                
     This  federal grant  provides AHFC  with funds  to help                                                                    
     build, operate, maintain,  renovate or modernize public                                                                    
     housing.                                                                                                                   
                                                                                                                                
     Projected  Outcomes: Program  will provide  funding for                                                                    
     the repair,  maintenance, and upgrade of  housing units                                                                    
     in AHFC's Low Rent Program.                                                                                                
                                                                                                                                
Mr. Wiedle  advanced to slide  12 and detailed  the requests                                                                    
for federal  and other  competitive grants.  The corporation                                                                    
was requesting $1.5 million in  AHFC corporate dividends and                                                                    
$6 million in federal receipts. He read the slide:                                                                              
                                                                                                                                
     This authorization  allows AHFC to apply  for HUD other                                                                    
     federal  agency  and  private  foundation  grants  that                                                                    
     target  housing and  supportive service  needs of  low-                                                                    
     income  and  special  needs  Alaskans  such  as  senior                                                                    
     citizens, survivors of  human trafficking, persons with                                                                    
     mental,  physical,  or developmental  disabilities,  or                                                                    
     the homeless.                                                                                                              
                                                                                                                                
     Projected  Outcomes: Funds  will  allow  AHFC to  apply                                                                    
     for, and potentially receive,  funding from private and                                                                    
     federal  grant  programs,  including HUD  Continuum  of                                                                    
     Care, HUD  811 Program  for Persons  with Disabilities,                                                                    
     HUD  Housing  Assistance   for  Persons  with  HIV/AIDS                                                                    
     (HOPWA), and  Department of  Justice Housing  for Human                                                                    
     Trafficking Survivors.                                                                                                     
                                                                                                                                
Mr.  Wiedle   moved  to  slide   13  and  the   request  for                                                                    
competitive grants  for public housing. The  request was for                                                                    
$350,000  in  AHFC corporate  dividends  and  $1 million  in                                                                    
federal receipts. He read the slide:                                                                                            
                                                                                                                                
     Funding for  AHFC to leverage federal  agency (HUD) and                                                                    
     private foundation grants that  target housing needs of                                                                    
     low-income and special needs groups  who live in public                                                                    
     and/or assisted housing.                                                                                                   
                                                                                                                                
     Projected Outcomes:  Authorization will enable  AHFC to                                                                    
     apply for,  and meet match requirements  of federal and                                                                    
     private foundation grant  programs including HUD Family                                                                    
     Self-Sufficiency   Coordinator;  HUD   Elderly/Disabled                                                                    
     Service  Coordinator Program,  HUD Youth  Demonstration                                                                    
     Program; and, Jobs-Plus Initiative Program.                                                                                
                                                                                                                                
Representative  Galvin   understood  that   the  competitive                                                                    
grants funding  would help pay  for housing costs  but would                                                                    
not build  new housing. She  asked if her  understanding was                                                                    
correct.                                                                                                                        
                                                                                                                                
Mr. Butcher responded that the  request was specifically for                                                                    
programs  that would  benefit  public  housing tenants.  For                                                                    
example,  AHFC had  developed a  jumpstart  program to  help                                                                    
transition   public  housing   residents  into   independent                                                                    
apartments and  potentially transition  into buying  a home.                                                                    
The residents  needed help with  job training  and financial                                                                    
literacy  and  the request  would  help  fund the  resources                                                                    
required to provide the individuals with assistance.                                                                            
                                                                                                                                
Representative  Galvin  understood  that the  funding  would                                                                    
help pay for programs that  would offer skills and education                                                                    
and  possibly  assistance  with the  paperwork  required  to                                                                    
apply  for  independent  housing.   She  asked  if  she  was                                                                    
correct.                                                                                                                        
                                                                                                                                
Mr.  Butcher responded  in the  affirmative  and added  that                                                                    
another  grant  example  was funding  to  help  children  in                                                                    
public  housing   to  obtain   a  part-time   job  providing                                                                    
landscaping services for the housing units.                                                                                     
                                                                                                                                
4:45:48 PM                                                                                                                    
                                                                                                                                
Mr. Wiedle  continued on slide  14, which was a  request for                                                                    
$3 million  in AHFC  corporate dividends for  a supplemental                                                                    
housing development program. He read the slide:                                                                                 
                                                                                                                                
     Program  facilitates the  construction of  decent, safe                                                                    
     and   sanitary   housing   through   regional   housing                                                                    
     authorities  by  providing capital  for  infrastructure                                                                    
     costs not  typically paid for  by federal  (HUD) funds.                                                                    
     Eligible use  of funds include: Onsite  water and sewer                                                                    
     facilities;   roads   to  project   sites;   electrical                                                                    
     distribution  systems;   and,  energy-efficient  design                                                                    
     features in homes.                                                                                                         
                                                                                                                                
     Projected   Outcomes:  funds   would  enable   Alaska's                                                                    
     Housing  Authorities to  construct affordable  homes in                                                                    
     urban  and rural  communities, fund  on-site water  and                                                                    
     sewer  facilities,  provide  roads to  housing  project                                                                    
     sites,  develop  electrical  distribution  systems  and                                                                    
     support    other     critical    residential    housing                                                                    
     infrastructure.                                                                                                            
                                                                                                                                
Representative  Coulombe  asked  for confirmation  that  the                                                                    
request was for  $3 million. She asked if there  was a match                                                                    
requirement because the request seemed low.                                                                                     
                                                                                                                                
Mr.  Butcher  responded that  the  use  of the  funding  was                                                                    
limited to  construction or renovation on  units. He thought                                                                    
the reason  for the  specificity was  because on  a national                                                                    
level, there  were few areas that  needed infrastructure. In                                                                    
rural Alaska, there would be no  place to build the units if                                                                    
infrastructure   was  not   prioritized.  The   program  was                                                                    
developed  many  years  prior  to  supplement  the  lack  of                                                                    
infrastructure  in rural  areas of  the state.  He explained                                                                    
that AHFC funds would offer  the flexibility to build a road                                                                    
and provide  utilities in order  to allow  rural communities                                                                    
to  use the  federal funds  for  the building  of new  units                                                                    
rather  than  renovation  of old  units.  In  rural  Alaska,                                                                    
almost all of the new  units in development were being built                                                                    
by the regional housing authorities.                                                                                            
                                                                                                                                
Representative  Hannan agreed  with Representative  Coulombe                                                                    
that $3  million did  not seem  sufficient for  the project.                                                                    
She  asked if  one chosen  regional housing  authority would                                                                    
receive the  entirety of  the funds  every year,  or whether                                                                    
every  housing  authority would  receive  a  portion of  the                                                                    
annual funds.  She indicated that  $3 million would  not pay                                                                    
for  the  extension   of  the  water  and   sewer  line  for                                                                    
affordable housing projects in Juneau.                                                                                          
                                                                                                                                
Mr.  Butcher responded  that the  funds were  distributed to                                                                    
all eligible  regional housing  authorities. He  thought the                                                                    
projects were smaller  in scale and most  of the communities                                                                    
only needed one or two units.                                                                                                   
                                                                                                                                
Co-Chair Edgmon  commented that in rural  Alaska, building a                                                                    
house  entailed  many other  elements  such  as road  system                                                                    
accessibility and  the electrical  and sewer systems  of the                                                                    
community. In  some respects, logistical  difficulties could                                                                    
eclipse the value  and effort of building  the house itself.                                                                    
He went to a seminar on  tiny homes in Anchorage and relayed                                                                    
that there was a prototype  tiny home that had an associated                                                                    
cost that  was "not  so tiny." He  thought that  the seminar                                                                    
was useful in  that it helped determine  what the logistical                                                                    
costs would be  for similar houses. He recalled  that a four                                                                    
by eight  piece of  plywood cost  nearly $100  in Dillingham                                                                    
the prior  summer. He appreciated  the work of  AHFC because                                                                    
it was an expensive time to build houses.                                                                                       
                                                                                                                                
4:51:08 PM                                                                                                                    
                                                                                                                                
Mr.   Wiedle  continued   on  slide   15  detailing   AHFC's                                                                    
weatherization program.  The request  was for $2  million in                                                                    
AHFC  corporate   dividends  and   $3  million   in  federal                                                                    
receipts. He read the slide:                                                                                                    
                                                                                                                                
     Program   allowed   AHFC   to  receive   Federal   U.S.                                                                    
     Department of  Energy (DOE) funding  for weatherization                                                                    
     and rehabilitation  of housing  units occupied  by low-                                                                    
     to-moderate  income housings.  AHFC corporate  receipts                                                                    
     augment   services   provided   under   this   program,                                                                    
     particularly in rural areas,  where federal rules often                                                                    
     limit the total  amount of federal dollars  that can be                                                                    
     expended on a housing unit.                                                                                                
                                                                                                                                
     Projected Outcomes:  In FY 24, the  program expected to                                                                    
     weatherize up  to 300 households. The  program expected                                                                    
     to weatherize up to 300 households.                                                                                        
                                                                                                                                
Co-Chair Edgmon  suggested that Co-Chair Foster  explain the                                                                    
ways in which the program was not simply rural in nature.                                                                       
                                                                                                                                
Co-Chair   Foster  appreciated   the  program   and  thought                                                                    
building  new units  was important,  but also  expensive. He                                                                    
thought  the  return  on  investment  for  the  project  was                                                                    
encouraging.  He referred  to page  1 of  the Weatherization                                                                    
Program Impacts  Report (copy on  file) which  reported that                                                                    
from  2008  through  2018,  a  total  of  $579  million  was                                                                    
invested  into  the  program  yet  on  page  3,  the  report                                                                    
indicated that  state funding for  the same time  period was                                                                    
$386 million.  He asked which  number was correct.  He noted                                                                    
that of the  state funding, the majority of  the monies were                                                                    
provided upfront in  2008. He asked what  state spending had                                                                    
been in more recent years.  He suggested that AHFC follow up                                                                    
with  the  committee with  the  information.  He hoped  that                                                                    
state  spending  could  grow  in   the  future  and  he  saw                                                                    
significant benefits to growing the program.                                                                                    
                                                                                                                                
Mr. Butcher responded that the  difference was that the $579                                                                    
million  figure included  the energy  rebate  funds and  the                                                                    
$386  million did  not.  The majority  of  the initial  $386                                                                    
million  funding   was  intended  for   weatherization.  The                                                                    
weatherization costs  were completely funded by  the program                                                                    
if  a household  had an  income  below a  certain level.  An                                                                    
energy rater would  determine what would need to  be done to                                                                    
a home  to properly weatherize  it and the occupants  of the                                                                    
home  would have  18 months  to  complete the  improvements.                                                                    
Once complete, the energy rater  would confirm that the work                                                                    
had been done and the  occupants would receive a rebate from                                                                    
AHFC.                                                                                                                           
                                                                                                                                
Mr.  Butcher added  that  AHFC  programs typically  received                                                                    
more funding  when the  price of  oil was  high. One  of the                                                                    
challenges  was that  federal  dollars involved  significant                                                                    
limitations; for  example, projects  had to average  a spend                                                                    
of $8,000  or less on a  home build. He relayed  that $8,000                                                                    
per  home  was  an  extremely  low  number  for  home  build                                                                    
projects in rural  Alaska and it would  be almost impossible                                                                    
to accomplish.                                                                                                                  
                                                                                                                                
Mr. Butcher continued that due  to the limitations, AHFC had                                                                    
used state dollars to supplement  federal dollars. The state                                                                    
received $18 million from  the Infrastructure Investment and                                                                    
Jobs Act (IIJA)  from the federal government,  but the funds                                                                    
came with the same $8,000  per home restriction. It would be                                                                    
difficult to  administer the dollars in  rural Alaska, which                                                                    
was a higher-need area than  urban Alaska. He indicated that                                                                    
it was a  challenge to determine the best  way to distribute                                                                    
the funds to benefit the entire state.                                                                                          
                                                                                                                                
4:56:51 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  appreciated  the   review  of  the  rebate                                                                    
program and noted  that he liked the  program. He understood                                                                    
that  the $18  million in  federal funding  was spread  over                                                                    
five years. He hoped that  the amount of state funding could                                                                    
be  increased and  that spreading  the funds  out over  time                                                                    
would make for  a more manageable process. It  was the prime                                                                    
time for weatherization projects in  rural Alaska due to the                                                                    
particularly high costs of oil.                                                                                                 
                                                                                                                                
Representative Coulombe asked if a  person would have to own                                                                    
a home  to participate in  the program.  She was aware  of a                                                                    
weatherization  program in  Anchorage for  mobile homes  and                                                                    
although   the  program   had  helped   some  people,   many                                                                    
individuals  did not  own their  mobile homes  and were  not                                                                    
eligible  for the  program. She  wondered  if renters  could                                                                    
participate.                                                                                                                    
                                                                                                                                
Mr. Butcher responded  that a person had to own  a home when                                                                    
the program  first began, but  AHFC expanded the  program to                                                                    
include  apartment buildings  and  newly constructed  homes.                                                                    
However, as the funding  shrunk the eligibility requirements                                                                    
became narrower. He deferred to  a colleague to provide more                                                                    
specific details.                                                                                                               
                                                                                                                                
4:58:49 PM                                                                                                                    
                                                                                                                                
JIMMY  ORD, ALASKA  HOUSING  FINANCE CORPORATION,  ANCHORAGE                                                                    
(via   teleconference),  relayed   that  both   renters  and                                                                    
homeowners could take advantage of the program.                                                                                 
                                                                                                                                
Co-Chair Edgmon asked how many homes had been weatherized.                                                                      
                                                                                                                                
Mr. Butcher  responded that when  the program began  and the                                                                    
price  of  oil  was  high,   the  idea  was  to  provide  an                                                                    
additional  energy dividend  to Alaskans.  The question  was                                                                    
whether  there was  a more  long-term solution.  The average                                                                    
home  reduced its  energy use  by over  30 percent  when the                                                                    
program was fully  funded. There was a  long-term benefit to                                                                    
Alaskans, particularly  in consideration  of the  high price                                                                    
of oil. He appreciated  that past governors and legislatures                                                                    
had supported the program and  had acknowledged the benefits                                                                    
and results  of the program.  He asked  if Mr. Ord  knew the                                                                    
answer to  Co-Chair Edgmon's  question regarding  the number                                                                    
of homes that had been weatherized as part of the program.                                                                      
                                                                                                                                
Mr. Ord  replied that  he did  not have  the numbers  but he                                                                    
thought  the   [provided  Weatherization   Program  Impacts]                                                                    
report included the requested information.                                                                                      
                                                                                                                                
Mr. Butcher would follow up with the details.                                                                                   
                                                                                                                                
Co-Chair Edgmon  appreciated the  program and noted  some of                                                                    
the homes that had been built  in his district in the 1960s,                                                                    
1970s, and before did not  have basic insulation or properly                                                                    
sealed windows and doors. He had  been told that many of the                                                                    
homes had the  potential to incur energy cost  savings of 30                                                                    
to 40 percent  under the program. He was  interested in what                                                                    
could be  done going forward  to maximize federal  loans and                                                                    
provide assistance to rural Alaska.                                                                                             
                                                                                                                                
Representative Galvin asked if there  was an ideal number of                                                                    
houses the corporation would like  to weatherize every year.                                                                    
She  thought the  program was  a short-term  investment that                                                                    
would pay dividends to Alaskans for a long time.                                                                                
                                                                                                                                
Mr.  Butcher responded  that he  would supply  the requested                                                                    
information  to  the  committee.   Every  five  years,  AHFC                                                                    
conducted a housing needs assessment  across the state which                                                                    
determined  how  many  homes  needed  to  be  renovated  and                                                                    
weatherized. It  was difficult to obtain  additional funding                                                                    
due to federal  restrictions. He added that  there were many                                                                    
homes  in the  state with  overcrowding issues  which caused                                                                    
mental  health  problems  in  addition  to  physical  health                                                                    
problems.  He   relayed  that  AHFC  did   not  employ  home                                                                    
builders,  but instead  contracted out  the responsibilities                                                                    
and  worked   with  regional  housing  authorities   on  the                                                                    
development of the projects.                                                                                                    
                                                                                                                                
Representative   Galvin   would    appreciate   seeing   the                                                                    
assessment.  She met  with the  Homeless Assistance  Program                                                                    
(HAP) earlier in the day and  was told that there was a need                                                                    
for over 127,000 housing units  in the state, which would be                                                                    
challenging to accommodate. It would  be helpful to know the                                                                    
corporation's goal.                                                                                                             
                                                                                                                                
5:06:38 PM                                                                                                                    
                                                                                                                                
Representative  Hannan commented  that she  was a  homeowner                                                                    
who took  advantage of the  weatherization program  nearly a                                                                    
decade  prior. She  had recently  completed a  renovation on                                                                    
her  house and  was stunned  to learn  that components  like                                                                    
electrical  plugs  and   recessed  lights  used  unnecessary                                                                    
amounts of energy if not  weatherized properly. She asked if                                                                    
simple  weatherization  techniques   were  required  in  the                                                                    
construction  of new  buildings in  order to  prevent future                                                                    
issues. She  wanted to  ensure that  new housing  units were                                                                    
built with energy efficiency in mind.                                                                                           
                                                                                                                                
Mr. Butcher responded in the  affirmative and confirmed that                                                                    
all   of  the   programs   he  had   discussed  during   the                                                                    
presentation  required  that  the  units  be  highly  energy                                                                    
efficient.  He indicated  that the  houses would  receive at                                                                    
least five stars in a  six star energy efficiency system. By                                                                    
state  law, AHFC  was only  permitted to  purchase mortgages                                                                    
for  energy efficient  homes;  therefore, homebuilders  were                                                                    
constructing  higher efficiency  houses in  order to  ensure                                                                    
the  homes  could   be  purchased  by  a   wide  variety  of                                                                    
individuals.                                                                                                                    
                                                                                                                                
Co-Chair Foster commented  that weatherization could involve                                                                    
small  changes  like stopping  drafts  with  shrink wrap  or                                                                    
replacing windows.  He had lived  in his  grandmother's home                                                                    
and  discovered that  there was  newspaper in  the walls  in                                                                    
lieu  of   proper  insulation,  which  was   common  in  the                                                                    
villages. Other  issues such as  the floors  separating from                                                                    
the walls  due to permafrost could  be fixed in a  matter of                                                                    
hours with the proper equipment,  but cost was a significant                                                                    
barrier  for  many  village residents.  The  issue  was  not                                                                    
exclusive to  villages and he  had seen  deteriorating homes                                                                    
in urban areas like Anchorage and Fairbanks as well.                                                                            
                                                                                                                                
Co-Chair  Edgmon  commented  that it  was  interesting  that                                                                    
statewide  energy codes  did not  go into  effect until  the                                                                    
late  1980s. Many  of the  houses built  during the  housing                                                                    
boom  of  the  late  1980s were  not  energy  efficient.  He                                                                    
thought that many homes in  Anchorage that were built during                                                                    
that time could benefit from weatherization.                                                                                    
                                                                                                                                
5:11:09 PM                                                                                                                    
                                                                                                                                
Representative  Coulombe thought  that  there were  leftover                                                                    
HUD funds in  Anchorage due to a lack  of public information                                                                    
and  awareness of  the housing  grants. She  understood that                                                                    
the  unawarded grants  and funding  continued  to roll  over                                                                    
from year to  year. She asked what happened  to the leftover                                                                    
funds.                                                                                                                          
                                                                                                                                
Mr.  Butcher responded  that if  there were  leftover funds,                                                                    
AHFC would alert  the Office of Management  and Budget (OMB)                                                                    
and the  Legislative Finance Division  (LFD), and  the funds                                                                    
would potentially  be reappropriated.  He did not  think any                                                                    
of the housing programs under  AHFC had ever experienced the                                                                    
problem  of having  leftover funds.  He  explained that  the                                                                    
housing  needs in  the  state  were so  severe  that it  was                                                                    
unlikely that the  corporation would ever have  the funds to                                                                    
accomplish its goals.                                                                                                           
                                                                                                                                
Mr.  Butcher  thought  the   program  providing  housing  to                                                                    
teachers  in  rural areas  of  the  state  stood as  a  good                                                                    
example of  an underfunded  program. The  corporation worked                                                                    
with the  communities to fill out  applications and increase                                                                    
funding  opportunities.   Most  communities  that   did  not                                                                    
receive funding after one round  of grant applications would                                                                    
receive funding  after the second round  of applications. He                                                                    
emphasized  that   the  corporation   worked  to   help  the                                                                    
communities that  needed the most  assistance in any  way it                                                                    
could.                                                                                                                          
                                                                                                                                
Representative Coulombe  asked if AHFC was  helping fill out                                                                    
paperwork and grant applications.                                                                                               
                                                                                                                                
Mr. Butcher responded that the  corporation was not involved                                                                    
to  the level  of helping  with the  paperwork, but  it held                                                                    
many  informational meetings  as the  funding was  announced                                                                    
and   provided   opportunities   for  individuals   to   ask                                                                    
questions. He  explained that  staff members  had one-on-one                                                                    
conversations with  community members  and helped  them with                                                                    
"big picture" elements of the application process.                                                                              
                                                                                                                                
Mr. Butcher  continued on slide  16 which began  the portion                                                                    
of the  presentation that included  the requests  for mental                                                                    
health budget items.                                                                                                            
                                                                                                                                
Mr. Wiedle moved  to slide 17 and detailed  the requests for                                                                    
HAP. The  corporation was requesting  $6.35 million  in AHFC                                                                    
corporate dividends,  $950,000 in  Mental Health  Trust Fund                                                                    
Dividends (MHTAAR), and $850,000  in state general funds. He                                                                    
read the slide:                                                                                                                 
                                                                                                                                
     The  Homeless  Assistance  Program provides  grants  to                                                                    
     assist nonprofit organizations,  local governments, and                                                                    
     regional   housing   authorities  in   addressing   the                                                                    
     emergency needs of homeless and near homeless.                                                                             
                                                                                                                                
     Projected  Outcomes: In  FY2024,  program will  support                                                                    
     the operations  of 35  homeless and  supportive housing                                                                    
     service providers in 13 different communities.                                                                             
                                                                                                                                
Mr. Wiedle  continued on  slide 18  and relayed  the request                                                                    
for the Beneficiary and Special  Needs Housing Grant Program                                                                    
(SNHG),  which  was  for $1.75  million  in  AHFC  corporate                                                                    
dividends, $1  million in state general  funds, and $200,000                                                                    
in MHTAAR. He read the slide:                                                                                                   
                                                                                                                                
     Funds  for  nonprofit  service  providers  and  housing                                                                    
     developers to increase  housing opportunities to Alaska                                                                    
     Mental  Health Trust  beneficiaries  and special  needs                                                                    
     populations.                                                                                                               
                                                                                                                                
     Projected Outcomes:                                                                                                        
         Ongoing operational support for 17 congregate                                                                       
          housing   properties  for   victims  of   domestic                                                                    
          violence,   people   with    mental   illness   or                                                                    
          developmental    disabilities   and    chronically                                                                    
          homeless Alaskans;                                                                                                    
         Reduction in recidivism among clients spending                                                                      
          time in institutions                                                                                                  
                                                                                                                                
5:15:28 PM                                                                                                                    
                                                                                                                                
Mr. Wiedle advanced to slide 19,  which was a new request of                                                                    
$135,000 in  MHTAAR for a  rural housing coordinator  in the                                                                    
Northwest Arctic Borough. He read the slide:                                                                                    
                                                                                                                                
     The  project would  fund  a  Rural Housing  Coordinator                                                                    
     position to  support state operating  infrastructure in                                                                    
     the Northwest Arctic Borough.                                                                                              
                                                                                                                                
     Projected   Outcomes:  A   Rural  Housing   Coordinator                                                                    
     position, funded  in the Northwest Arctic  Borough that                                                                    
     will   engage   community   partners,   document   best                                                                    
     practices and  lessons learned  of a  grassroots effort                                                                    
     to  build local  capacity  and a  coalition to  address                                                                    
     homelessness   and   to    strategize   on   addressing                                                                    
     overcrowding,   substandard   housing  and   increasing                                                                    
     affordable housing.                                                                                                        
                                                                                                                                
Representative   Galvin   thought    the   position   seemed                                                                    
beneficial.  She asked  what brought  about the  creation of                                                                    
the new  position and why  the Northwest Arctic  Borough was                                                                    
chosen over other rural areas.                                                                                                  
                                                                                                                                
Mr. Butcher responded  that the impetus was  that there were                                                                    
homeless  coordinators  being  funded through  various  fund                                                                    
sources  in  Anchorage,  Fairbanks, and  Juneau,  but  rural                                                                    
coordinators  were   not  being  funded.  There   was  still                                                                    
important  work occurring  in rural  areas, but  it was  not                                                                    
being funded  in the same way  as it was in  urban areas. He                                                                    
relayed that  Alaska Mental  Health Trust  Authority (AMHTA)                                                                    
felt  strongly that  AHFC needed  to employ  coordinators in                                                                    
rural areas  and asked if the  corporation would collaborate                                                                    
with the trust  on the program. The  corporation had already                                                                    
seen numerous successes  due to the funding  of the program,                                                                    
such as the  opening of a homeless shelter  in Kotzebue. The                                                                    
coordinators were  able to accomplish necessary  projects in                                                                    
communities that  would have otherwise not  been undertaken.                                                                    
He would not  be surprised if there was  some flexibility in                                                                    
moving coordinators from area to  area depending on the need                                                                    
of the communities.                                                                                                             
                                                                                                                                
Representative Galvin  appreciated the consideration  of the                                                                    
needs  in  rural  communities. She  added  that  the  Bethel                                                                    
region had deep needs and  she hoped to see more inclusivity                                                                    
of  other  regions and  that  the  unique elements  of  each                                                                    
community were  considered. She thought it  was important to                                                                    
give a  voice to an  individual from a given  region because                                                                    
the  locals were  most  aware of  the  particular issues  in                                                                    
their area.                                                                                                                     
                                                                                                                                
Mr.  Butcher   responded  that  Representative   Galvin  was                                                                    
speaking  to  the  next  slide,   which  was  a  coordinator                                                                    
position  that was  yet  to be  designated  to a  particular                                                                    
area.  The  reason the  first  coordinator  was assigned  to                                                                    
Kotzebue was  because the  regional housing  authorities had                                                                    
determined that the capacity was highest in Kotzebue.                                                                           
                                                                                                                                
5:20:01 PM                                                                                                                    
                                                                                                                                
Representative  Cronk  commented   that  he  represented  91                                                                    
communities  and thought  it  would be  valuable  to have  a                                                                    
coordinator position due to the vast number of communities.                                                                     
                                                                                                                                
Mr.  Butcher added  that  the  regional housing  authorities                                                                    
with  which   AHFC  worked  assisted  in   the  coordination                                                                    
efforts. Representatives  from the housing  authorities were                                                                    
located   in  all   communities.  There   might  not   be  a                                                                    
coordinator position listed for a  community, but it did not                                                                    
mean that  funds were  not dedicated  to housing  efforts in                                                                    
the communities.                                                                                                                
                                                                                                                                
Co-Chair Edgmon  commented that  rural areas  were beginning                                                                    
to  implement   more  modern  systems  such   as  widespread                                                                    
broadband  and modern  heating systems,  water systems,  and                                                                    
sewer  systems. The  systems could  be  monitored from  afar                                                                    
using  video calling  software  because maintenance  workers                                                                    
would  have the  ability to  view the  systems in  real time                                                                    
over  video. He  was  looking forward  to  building new  and                                                                    
modern homes in the villages.                                                                                                   
                                                                                                                                
Mr. Wiedle continued on slide  20 and detailed a request for                                                                    
a rural  housing coordinator position  in a new area  of the                                                                    
state. He read the slide:                                                                                                       
                                                                                                                                
     This   project  funds   a  Rural   Housing  Coordinator                                                                    
     position to  support state operating  infrastructure in                                                                    
     a region that does not yet have this position.                                                                             
                                                                                                                                
     Projected   Outcomes:  A   Rural  Housing   Coordinator                                                                    
     position that will  engage community partners, document                                                                    
     best  practices and  lessons learned  of a  grass-roots                                                                    
     effort  to  build local  capacity  and  a coalition  to                                                                    
     address  homelessness and  to strategize  on addressing                                                                    
     overcrowding,   substandard   housing  and   increasing                                                                    
     affordable housing.                                                                                                        
                                                                                                                                
Co-Chair Edgmon asked  if Mr. Butcher or Mr.  Wiedle had any                                                                    
closing comments.                                                                                                               
                                                                                                                                
Mr. Butcher  appreciated the  committee's time  and interest                                                                    
in the programs.                                                                                                                
                                                                                                                                
Co-Chair Edgmon reviewed the agenda  for the following day's                                                                    
meeting.                                                                                                                        
                                                                                                                                
HB  40  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 40 2019_Weatherization_Program_Impacts_Report 041923.pdf HFIN 4/19/2023 1:30:00 PM
HB 40
HB 40 AHFC Cap Bud HFIN 4.19.23.pdf HFIN 4/19/2023 1:30:00 PM
HB 40
HB 40 AHFC Response Q 042423.pdf HFIN 4/19/2023 1:30:00 PM
HB 40