Legislature(2021 - 2022)BARNES 124
03/25/2022 09:00 AM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Affordable Housing | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 25, 2022
9:06 a.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair (via teleconference)
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage (via teleconference)
Representative Liz Snyder
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: AFFORDABLE HOUSING
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MARK ROMICK, Deputy Executive Director
Alaska Housing Finance Corporation
Anchorage, Alaska
POSITION STATEMENT: Presented about affordable housing
challenges in Alaska.
MEG ZALETEL, Interim Executive Director
Anchorage Coalition to End Homelessness
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint presentation, titled
"Housing and Homelessness."
MICHELE BROWN, Senior Fellow
Rasmuson Foundation
Anchorage, Alaska
POSITION STATEMENT: Presented about affordable housing in
Alaska.
COLLEEN DUSHKIN, Executive Director
Association of Alaska Housing Authorities
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint, titled "An Overview
of Alaska's Housing Shortage."
CAROL GORE, President and CEO
Cook Inlet Housing Authority
Anchorage, Alaska
POSITION STATEMENT: Discussed affordable housing in Alaska.
ANDRE SPINELLI, Director
Alaska State Home Building Association
Anchorage, Alaska
POSITION STATEMENT: Discussed challenges in the construction
industry in Alaska.
ACTION NARRATIVE
9:06:00 AM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 9:06 a.m.
Representatives McCarty, Kaufman, Snyder, Nelson, Fields (via
teleconference), Schrage (via teleconference), and Spohnholz
were present at the call to order.
^PRESENTATION: Affordable Housing
PRESENTATION: Affordable Housing
9:06:46 AM
CO-CHAIR SPOHNHOLZ announced that the only order of business
would be a presentation on affordable housing.
9:07:51 AM
MARK ROMICK, Deputy Executive Director, Alaska Housing Finance
Corporation (AHFC), described the housing market in the state
and the affordable-housing challenges. He stated that the
mission of AHFC is to provide access to safe, quality, and
affordable housing to residents of the state. He continued that
AHFC works with nonprofit and for-profit organizations, along
with community groups to build affordable housing. He noted
that some funding comes from the federal government. He pointed
out that the emergency rental assistance programs have helped
stabilize the rental market and reduce homelessness, and, from
loss of income during the COVID-19 pandemic, homeowner
assistance programs help homeowners to pay their mortgage. He
noted that the Homeless Stabilization Program has helped 126
people move into more permanent housing. He explained that none
of these programs would be successful without the help of
nonprofit organizations and local governments throughout the
state. In general, the housing market currently is producing
strong sales. Vacancy rates are at lower rates across the
state; however, as interest rates rise, supply-chain issues will
be exacerbated by the cost of debt. When it comes to
availability of affordable housing, he said there is an uneven
capacity, and the pandemic has exacerbated this problem. He
added that these challenges have created new opportunities.
9:20:42 AM
MEG ZALETEL, Interim Executive Director, Anchorage Coalition to
End Homelessness, gave a PowerPoint presentation, titled
"Housing and Homelessness," [hard copy included in the committee
packet]. She stated that the Anchorage Coalition to End
Homelessness coordinates the geographic homeless prevention
response system in Anchorage. She maintained that housing is
the solution to homelessness; however, affordable housing is
difficult to obtain in Anchorage. She stated that rent for a
two-bedroom apartment would require a minimum hourly wage of
$23.74. She moved to slide 4, showing a map of Anchorage,
indicating the minimum hourly payrate to afford a two-bedroom
home in various zip codes. She stated that there was an average
5.9 percent vacancy rate statewide in 2021, with Anchorage's
vacancy rate at 4.3 percent. She advised that any figure under
a 5 percent vacancy rate becomes a very competitive market to
find housing. She added that vacancy rates do not include
properties used for Airbnb or VRBO. She expressed the opinion
that these types of [vacation rentals] have created housing
complications. Concerning permanent supportive housing, she
said this is reserved for people who have experienced chronic
homelessness, and most communities have no beds [for the
programs which support this]. She stated that larger, urban
areas have one to two beds per one thousand residents for
supportive housing. She stated that there are currently 855
individuals in the Municipality of Anchorage run shelters, with
over 150 of these individuals needing assistance from permanent
supportive housing [programs]. She advised that finding housing
for people who have a record of incarceration or behavioral
health problems, and who have experienced chronic homelessness,
is extremely difficult. The workforce needs for these programs
are high as well. She described this as a difficult issue in
Anchorage and statewide. Addressing rapid rehousing programs,
she said they have helped to reduce trauma for people
experiencing temporary homelessness; however, there is less than
one bed per 1,000 residents allotted for rapid rehousing. She
pointed out that the numbers shown on slide 5 and slide 6 do not
consider family rehousing possibilities; this is because the
assumption is that shelters are a last resort.
9:38:19 AM
MS. ZALETEL detailed the single adult homeless-prevention
response system. She explained that there is a continuum of
services which respond to homelessness, including several paths
to housing. She stated that workforce-supportive housing
involves converting hotels into single-room occupancy domiciles.
She related that support can be provided to landlords of
private-market units who would consider renting to people
experiencing homelessness. She advised, to combat the challenge
of vacancy rates, diversification of housing types needs to be
accomplished, and by leveraging rental assistance, federal
relief affordable-housing units could be created. She expressed
the difficulty in finding owners for capital projects, such as
new shelters and hotel conversions, because maintenance and
operation funding is not built in. She argued that the solution
involves creating a community land trust specific to owning
properties which service extremely low income and special needs
people within the homeless prevention response system. She
concluded that public and private partnerships could help to
address the immediacy of the need to assist people experiencing
homelessness.
9:42:35 AM
MICHELE BROWN, Senior Fellow, Rasmuson Foundation, spoke about
the investments the Rasmuson Foundation has made in housing in
the state. She described housing as the bedrock of community
safety, stability, health, and economic development. She
advised that affordable housing is not just a problem for people
with low income or those experiencing homelessness. Many of the
most common important and prevalent jobs do not provide the
income which would pay the rate for housing. She pointed out
the growing correlation between attracting and retaining a
workforce and the housing shortage. She explained that the lack
of housing access and the cost are both barriers to supplying a
workforce in the state. She argued that the time has come to
work together and analyze tools the state could deploy to
increase the availability and affordability of housing.
MS. BROWN suggested creating a housing trust, as this could
provide a permanent source of funding for the development,
preservation, and maintenance of housing stock. She pointed out
that Alaska is one of three states in the country which lacks a
housing trust. She notified the committee that the Alaska
Coalition on Housing and Homelessness along with the Anchorage
Coalition to End Homelessness are setting up a trust which will
be brought to the legislature for possible funding this session.
She outlined that a housing trust is a renewable resource which
can be used to "top off" projects that otherwise may fail to
come to fruition because of a lack of funding. There is an
endowment being created through the Alaska Community Foundation
to complement capital projects for housing in Alaska. The
source of funding would be in perpetuity. She argued that
housing trusts have worked well in other states. By integrating
efforts between nonprofits, private groups, and government,
these efforts can be streamlined to limit the overhead involved
with fundraising, grant applications, and more. She added that,
in Anchorage, the influx of seasonal tourism employees increases
rental competition.
9:28:17 AM
MR. ROMICK, responding to a committee question, said that Alaska
Housing Finance Corporation produced a dividend of $42 million
in fiscal year 2022 (FY 22); however, because of the current
financial situation across the globe, in FY 23 the amount will
be closer to $22 million.
10:03:16 AM
COLLEEN DUSHKIN, Executive Director, Association of Alaska
Housing Authorities, presented a PowerPoint, titled "An overview
of Alaska's Housing Shortage" [hard copy included in the
committee packet]. She stated that the association includes 14
regional housing authorities, which provide affordable housing
development and services to 196 tribes in Alaska. By working
with local, state, and federal partners, housing authorities are
the only developers of affordable housing in most of the state's
rural communities. The Native American Housing Assistance and
Self Determination Act of 1996 (NAHASDA) made it so homes could
be constructed for weather conditions in Alaska, but funding
through this entity has eroded by 30 percent. In addition, the
cost of building materials has skyrocketed due to inflation;
therefore, regional housing authorities face a growing need for
funding.
MS. DUSHKIN stated that [in the state] 12,600 homes are without
plumbing, 14,000 homes are heated inefficiently, and in some
regions nearly 40 percent of homes are overcrowded. She voiced
that the construction of 16,000 homes would help to alleviate
overcrowding. She advised that by 2030, the senior population
is expected to double, and 300 senior-living beds would be
needed. She stated that the Professional Housing Program is
critical to ensuring that communities have housing available for
professionals, which ensures a critical workforce and cuts down
on costly turnover. The Professional Housing Program is a
matching-grant fund and often a debt service for housing
development. She continued that, as the population of seniors
increases, having adequate housing for elders is critical for
communities. She pointed out that the Weatherization Program
extends the life of substandard homes, which otherwise might be
on the brink of uninhabitability. The Supplemental Housing
Development Grant Program requires a five to one match, with
housing authorities often leveraging this program with an eight
to one match. She opined that housing is the missing piece
within the Infrastructure Investment and Jobs Act. She said
that safe and affordable housing is necessary to thrive and
contribute to a sustainable community, but Alaska communities
lack this. She concluded that housing authorities welcome a
partnership with the state to invest in affordable housing in
all communities.
10:15:18 AM
CAROL GORE, President and CEO, Cook Inlet Housing Authority,
advised that affordable housing is Alaska's biggest [missed]
opportunity. She explained that housing is a top priority in
every community in Alaska, because, without it, companies and
employers cannot retain their workforce. Young professionals
are leaving because of housing shortages, and rural communities
face overcrowding. She stated that the Cook Inlet Housing
Authority has been developing and managing multi-family housing
for the last 20 years throughout Wasilla, Anchorage, and Palmer.
Currently, housing authorities cannot meet the needs of the
community on its own. She pointed out that in Anchorage, the
rental market is very "tight," with only a 5 percent vacancy in
affordable apartments; costs for rentals in the private market
are up by 23 percent; and the private market is only at a 3
percent vacancy. She argued that land, capacity, and funding
are needed to deliver housing to Alaskans; however, there is not
enough funding to meet this need. She stated that there has not
been a significant amount of housing built in Alaska without
help from the Alaska Housing Finance Corporation, which is the
strongest partner to Alaska's housing authorities. She advised
that housing construction alone will not solve the problem of
homelessness; to keep our most vulnerable citizens housed,
funding for case management and support services is needed, as
well. She expressed the opinion that affordable housing has
been underfunded for decades; without affordable housing the
state risks losing critical workforce, families, seniors, and
the opportunity for more economically viable communities.
10:22:04 AM
ANDRE SPINELLI, Director, Alaska State Home Building
Association, listed the challenges of building affordable
housing. He stated that the recent increase in the cost of
supplies, along with the shortage of building materials,
especially lumber, is a major challenge. He pointed out that
there has been a 30 percent increase in the cost of constructing
a house since 2019, which is drastic when compared to the
previous 15 to 20 years. He continued that there is a labor
shortage, as well as an increase in labor costs. There is also
a lack of affordable land and the infrastructure to turn vacant
land into developable lots. He concluded that a lack of
supplies has raised the cost of housing to an unprecedented
level.
10:30:15 AM
CO-CHAIR SPOHNHOLZ shared her concern that housing was not
included in the Infrastructure Investment and Jobs Act.
10:32:05 AM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
10:32 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ACEH Housing Presentation_3.25.22.pdf |
HL&C 3/25/2022 9:00:00 AM |
Affordable Housing |
| Alaska 2023 Housing Investment.pdf |
HL&C 3/25/2022 9:00:00 AM |
Affordable Housing |
| Final Global Pandemic Stresses Alaskas Housing 2-18-22.pdf |
HL&C 3/25/2022 9:00:00 AM |
Affordable Housing |
| An Overview of Alaska's Housing Shortage.pdf |
HL&C 3/25/2022 9:00:00 AM |
Affordable Housing |