04/24/2025 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

        HB 184-AIDEA FINANCE WORKFORCE HOUSING DEVELOP.                                                                     
                                                                                                                                
9:07:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT announced  that  the next  order of  business                                                               
would  be HOUSE  BILL NO.  184, "An  Act relating  to the  Alaska                                                               
Industrial  Development and  Export  Authority;  and relating  to                                                               
workforce housing development projects."                                                                                        
                                                                                                                                
9:07:52 AM                                                                                                                    
                                                                                                                                
REPORESENTATIVE  ANDI  STORY,  Alaska  State  Representative,  as                                                               
prime sponsor,  presented HB  184.   She paraphrased  the sponsor                                                               
statement  [included  in the  committee  packet],  which read  as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     In most of Alaska, there  is a severe housing shortage.                                                                    
     This  holds  true  in   our  communities  in  Southeast                                                                    
     Alaska. This  shortage is  causing outmigration  of our                                                                    
     younger residents, who are so  important in filling our                                                                    
     employment  needs  and  keeping our  longtime  families                                                                    
     here.  Adding more  housing units  is  critical to  our                                                                    
     communities.  Alaska  cannot  keep  our  residents  nor                                                                    
     attract key  public employees such as  police, teachers                                                                    
     and health workers if they cannot find housing.                                                                            
                                                                                                                                
     More rental units  are needed. In my  home community of                                                                    
     Juneau,  the 2023  Alaska  Housing Finance  Corporation                                                                    
     (AHFC)  rental  market survey  of  1,115  units sees  a                                                                    
     rental vacancy  rate of four percent.  Recent data from                                                                    
     the  American  Community   Survey  (ACS),  indicates  a                                                                    
     similar rental  vacancy rate  at 3.6  percent. Anything                                                                    
     lower than  a five percent vacancy  rate indicates that                                                                    
     the housing  supply is tight,  and demand  is outpacing                                                                    
     available  units. This  indicates  that meeting  demand                                                                    
     for  new   housing  will  require   additional  housing                                                                    
     construction since there is no  extra supply within the                                                                    
     existing housing market to take on this demand.                                                                            
                                                                                                                                
     HB 184 is important  because it expands AIDEA's mission                                                                    
     statement, allowing  the corporation to use  their loan                                                                    
     program for the desperately  needed construction of new                                                                    
     workforce  housing facilities  containing five  or more                                                                    
     dwelling units.  The bill  provides a  legal definition                                                                    
     of  "workforce  housing"  based on  the  Department  of                                                                    
     Housing  and  Urban Development's  working  definition,                                                                    
     which  calculates affordability  based  on the  average                                                                    
     median income of an area.                                                                                                  
                                                                                                                                
     This  bill moves  us closer  to addressing  our housing                                                                    
     demands.  It  is  imperative that  we  create  stronger                                                                    
     communities through  more housing options. I  urge your                                                                    
     support for HB 184.                                                                                                        
                                                                                                                                
9:11:38 AM                                                                                                                    
                                                                                                                                
HONOUR MILLER-AUSTIN, Staff, Alaska  State Legislature, on behalf                                                               
of Representative  Story, prime sponsor, presented  the sectional                                                               
analysis for  HB 184  [included in  the committee  packet], which                                                               
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     Section  1: Adds  a new  subsection 7  to AS  44.88.070                                                                    
     which states  the purpose  of the  authority. Providing                                                                    
     means of  financing and  facilitating the  financing of                                                                    
     construction of  new workforce housing  facilities with                                                                    
     five or more  units will now be part of  the mission of                                                                    
     AIDEA.                                                                                                                     
                                                                                                                                
     Section 2:  Adds a  new subsection  33 to  AS 44.88.080                                                                    
     stating the powers of the  authority. One of the powers                                                                    
     of AIDEA will now be  to provide means of financing and                                                                    
     facilitating  the  financing  of  construction  of  new                                                                    
     workforce housing facilities with five or more units.                                                                      
                                                                                                                                
     Section  3:  Extends  the  definition  of  "development                                                                    
     project"  under AS  44.88.900(6)  to include  workforce                                                                    
     housing facilities  with five  or more  dwelling units,                                                                    
     as   defined   in   the  new   subsection   J   of   AS                                                                    
     44.88.900(13).                                                                                                             
                                                                                                                                
     Section  4:   Adds  a  new  subsection   J  to  include                                                                    
     workforce housing in the meaning  of "project" under AS                                                                    
     44.88.900(13).                                                                                                             
                                                                                                                                
     Section 5:  Adds a  new subsection  22 to  AS 44.88.900                                                                    
     defining  "workforce housing".  Workforce housing  will                                                                    
     be  defined  as  residential  housing  that  costs  the                                                                    
     occupants  less than  30  percent of  the  income of  a                                                                    
     household with  120 percent of  the area  median family                                                                    
     income, as  determined by the United  States Department                                                                    
     of Housing and Urban Development.                                                                                          
                                                                                                                                
9:13:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RUFFRIDGE questioned the meaning of Section 5.                                                                   
                                                                                                                                
REPRESENTATIVE  STORY  said  it   means  that  housing  would  be                                                               
developed at fair market value for  people who are not low income                                                               
but are in need of affordable housing.                                                                                          
                                                                                                                                
REPRESENTATIVE  RUFFRIDGE calculated  that  in  Juneau where  the                                                               
median  family  income  is  $120,000,   the  bill  would  provide                                                               
financing from AIDEA for condo  units that cost $3,000 per month.                                                               
He opined that $3,000 does not sound affordable.                                                                                
                                                                                                                                
CO-CHAIR HIMSCHOOT said the goal  is to provide additional multi-                                                               
family workforce housing, not necessarily affordable housing.                                                                   
                                                                                                                                
9:16:41 AM                                                                                                                    
                                                                                                                                
STACY BARNES, Director, Governmental  Relations & Public Affairs,                                                               
Alaska  Housing Finance  Corporation  (AHFC), said  affordability                                                               
refers to U.S. Department of  Housing and Urban Development (HUD)                                                               
standards, which are updated on an  annual basis.  She offered to                                                               
follow up  with the area  median income (AMI) in  each community.                                                               
In  response to  a follow  up question,  she confirmed  that AHFC                                                               
offers  loan   programs  for  single  and   multi-family  housing                                                               
developments, but the goal is  to enable AIDEA to offer something                                                               
similar in recognition of the statewide housing challenge.                                                                      
                                                                                                                                
9:22:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RUFFRIDGE   asked  whether  AIDEA   had  received                                                               
requests  for   multi-family  dwelling  loans  and   whether  the                                                               
definition  of  area  median  family income  in  the  bill  would                                                               
increase affordability.                                                                                                         
                                                                                                                                
BRANDON   BREFCZYNSKI,   Deputy   Director,   Alaska   Industrial                                                               
Development &  Export Authority (AIDEA),  said no, AIDEA  has not                                                               
received any  commercial housing  applications through  the bank,                                                               
but there  have been preliminary talks  with municipalities about                                                               
financing  multi-family  units.     Nonetheless,  ADIEA  has  the                                                               
ability to provide commercial housing development.                                                                              
                                                                                                                                
REPRESENTATIVE  RUFFRIDGE   said  under  his   estimation,  AIDEA                                                               
already has the ability do what  is being proposed in HB 184, but                                                               
the  bill   would  impose  artificial  limitations   by  defining                                                               
workforce  housing  with  the  income  requirements.    He  asked                                                               
whether that is correct.                                                                                                        
                                                                                                                                
MR. BREFCZYNSKI  agreed that in  terms of running a  loan through                                                               
the  definition of  workforce housing  in the  bill, it  would be                                                               
limiting.  He  confirmed that AIDEA has the ability  to finance a                                                               
commercial  housing development  through  its  various funds  and                                                               
programs.                                                                                                                       
                                                                                                                                
9:28:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY   clarified  that   AIDEA  does   have  the                                                               
authority to provide  housing loans, which they  did primarily in                                                               
the 1980s.   They have  since stopped  providing them.   The bill                                                               
emphasize the importance  of these loans in  statute and provides                                                               
more direction.   She  said the key  problem is  that contractors                                                               
are not  building affordable housing because  it's not affordable                                                               
for  them.   She referred  to  the Ridgeview  housing complex  in                                                               
Juneau, which  was intended to  offer affordable housing,  but is                                                               
no longer considered affordable.                                                                                                
                                                                                                                                
9:30:52 AM                                                                                                                    
                                                                                                                                
CHRISTINE  WOLL,  Assembly Member,  City  and  Borough of  Juneau                                                               
(CBJ), gave invited testimony during the  hearing on HB 184.  She                                                               
stated  that  affordable housing  is  the  assembly's number  one                                                               
priority.   She discussed the  dire nature of the  housing crisis                                                               
in Juneau,  due in part  to changing  demographics and a  lack of                                                               
multi-unit  dwellings   that  has  resulted  in   less  available                                                               
housing.  The CBJ put together  a housing action plan in 2016 and                                                               
has   implemented  property   tax   abatement  for   multi-family                                                               
buildings  over four  units,  reduced  parking requirements,  and                                                               
built  a  number of  loan  and  grants  programs in  addition  to                                                               
rewriting the housing code.  The  city is finally starting to see                                                               
the fruits  of that effort,  she said, with  several developments                                                               
taking  advantage of  these opportunities.    She concluded  that                                                               
larger  projects do  not pencil  out  without flexible  financing                                                               
options.   She said HB  184 would  not solve the  housing crisis,                                                               
but it would add one more tool to the toolbox.                                                                                  
                                                                                                                                
9:35:25 AM                                                                                                                    
                                                                                                                                
RICHELLE  JOHNSON,  Research  &  Technical  Assistance  Director,                                                               
Center for  Economic Development, University of  Alaska Anchorage                                                               
(UAA), gave invited testimony during the  hearing on HB 184.  She                                                               
observed  that housing  is one  of the  top barriers  to economic                                                               
growth  in Alaska,  which also  impact  workforce attraction  and                                                               
                               th                                                                                               
retention.     Alaska  ranks   45   in   terms  of   new  housing                                                               
construction  and new  development  on  multi-family housing  has                                                               
slowed even more.   While there's a clear demand  in housing, its                                                               
not translating  to increased  development, which  indicates that                                                               
nontraditional  tools  are  necessary.   She  spoke  to  the  tie                                                               
between  housing   and  workforce,  which  impacts   the  state's                                                               
economic health.  She agreed that  the bill would not solve every                                                               
challenge for every  community, but it would give  them access to                                                               
a new  source of capital  and would  help improve the  margins on                                                               
housing development on the cusp of financial feasibility.                                                                       
                                                                                                                                
9:38:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLLAND asked  why there is a housing  crisis in a                                                               
stagnant   economy   that   is  experiencing   an   increase   in                                                               
outmigration and a  growth in nonresident workers.   He asked how                                                               
the data informs  the kind of housing strategies  that are needed                                                               
and how to make new construction attractive.                                                                                    
                                                                                                                                
MS.  JOHNSON reported  that  that  there is  a  trend in  smaller                                                               
household  sizes   across  the  state,  in   addition  to  multi-                                                               
generational  households without  enough available  or affordable                                                               
housing for  the younger generation  to move out.   Further, many                                                               
houses were  constructed in  the 1970s and  1980s, and  the aging                                                               
houses are leading to an  attrition of available units statewide.                                                               
So,  while there  is a  decreasing  number of  people in  Alaska,                                                               
there is also a decreasing number of available homes.                                                                           
                                                                                                                                
CO-CHAIR  HIMSCHOOT  commented  that  despite  adding  three  new                                                               
neighborhoods in Sitka, there is  still a housing shortage, which                                                               
is related to people aging in place.                                                                                            
                                                                                                                                
9:42:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY highlighted the  letters of support from the                                                               
Alaska Municipal  League (AML) and  Housing Alaskans, as  well as                                                               
the zero fiscal note attached to the bill.                                                                                      
                                                                                                                                
REPRESENTATIVE  HALL  shared  that  Alaska  has  a  very  serious                                                               
housing  shortage and  is  in  "crisis mode."    According to  an                                                               
Agnew::Beck  study, Alaska  needs 27,500  new housing  units over                                                               
the next  10 years.   She described  the bottleneck  taking place                                                               
with the housing landscape in Alaska.                                                                                           
                                                                                                                                
9:44:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRAX  asked whether  there  had  been input  from                                                               
bankers, developers, or the real estate industry on HB 184.                                                                     
                                                                                                                                
REPRESENTATIVE STORY said she had not reached out to developers.                                                                
                                                                                                                                
9:46:52 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT announced that HB 184 would be held over.