Legislature(2025 - 2026)ADAMS 519
05/02/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Overview and Capital Requests by Alaska Housing Finance Corporation | |
| SB113 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 57 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 113 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 57(FIN)
"An Act making appropriations, including capital
appropriations and other appropriations; making
reappropriations; making appropriations to capitalize
funds; and providing for an effective date."
^PRESENTATION: OVERVIEW AND CAPITAL REQUESTS BY ALASKA
HOUSING FINANCE CORPORATION
Co-Chair Schrage
1:46:10 PM
BRYAN BUTCHER, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, introduced
the PowerPoint presentation "Alaska Housing Finance
Corporation Presentation to House Finance," dated May 2,
2025 (copy on file). He quickly advanced to slide 2 titled
"Board of Directors," which named the members of the Alaska
Housing Finance Corporation (AHFC) board. He turned to
slide 3 that contained the AHFC's mission as follows:
Alaska Housing Finance Corporation's mission that was to
provide Alaskans access to safe, quality, affordable
housing. He expounded that the corporation's prime
responsibility was housing, but it had taken on other prior
responsibilities through subsidiaries at the governor's or
legislature's direction like the Green Bank that it
recently established. He moved to slide 4 titled "AHFC 2024
Highlights:"
• FY26 dividend to the State of $37.8 million
• Mortgage portfolio is growing, and performance is
healthy.
• Delinquencies and foreclosures are historically low;
• Public Housing funds are stable;
• Rural Professional Housing leverages expiring
federal funds and jumpstarts construction in rural
hubs;
• Alaska Corporation for Affordable Housing invests
meaningfully in new construction in Fairbanks and
Valdez.
Representative Galvin appreciated how the corporation was
able to help the state. She wanted context to the $37.8
million. She asked how the number was determined and
whether it was something the board decided. She also
wondered if the dividend was derived from a corpus and if
so, how much of the corpus was encumbered.
1:50:11 PM
Mr. Butcher responded that the dividend was determined via
state statute. He explained that AHFC paid a set 75 percent
of its net income on an annual basis. He furthered that the
corporation was completely self-supporting; two-thirds of
the budget was comprised of federal funds and one-third was
AHFC receipts. The corporation sold bonds on Wall Street,
the proceeds were used to buy mortgages, and its revenue
was generated via the mortgage payments. Subsequent to
paying it operating costs what remained was its net income.
He delineated that prior to the pandemic, revenues were
rising steadily but fluctuated at times because of factors
like the pandemic where short term investments dropped to
zero. Representative Galvin asked what the corporation's
bank account amount was. Mr. Butcher would follow up with
specifics. He estimated that the net value was around $4.5
billion which included all the mortgages and the 1,600
public housing units in 16 different communities in the
state that the corporation operated. He offered that AHFC
generally did not bond until it needed money for more
mortgages, therefore, did not "sit on" large cash balances.
Co-Chair Schrage referred to the Green Bank and asked if
AHFC was affected by the federal government's withdrawing
of Green Bank funding. Mr. Butcher answered in the
affirmative. He communicated that he anticipated an impact
was likely and reminded the committee that the bill was
funded via $20 million in federal funds. He added that no
specific programs were established yet. Currently, the
Green Bank was in its initial phase and the first board
meeting had not yet happened.
1:54:00 PM
Representative Allard noted the corporation's effort to
grow affordable housing. She referenced bullet point
regarding delinquency and foreclosures at historic lows.
She relayed that the mayor of Anchorage wanted to build
1000 homes and determined that the infrastructure could not
handle it. She asked if growing the market that quickly in
Anchorage would destabilize the market. She guessed that
the housing would likely be built in Chugiak and Eagle
River. Mr. Butcher responded that it was a lofty goal. He
surmised that homebuilders would not build homes if they
perceived they could not sell the houses. He acknowledged
that there was a lack of housing across the state and for
some period of time any new homes would be a benefit. He
deduced that if the population continued to dwindle, the
demand for housing would decrease and the private sector
market would respond accordingly. Representative Allard
asked if building duplexes or triplexes could drive down
the single family home market. She reiterated that 1000
homes in 10 years was a lot. She did not believe that the
cost of housing was driving people to leave the state. Mr.
Butcher responded that it could happen theoretically, but
in the last 5 years, they had seen median house prices in
Anchorage rise over 50 percent and was not affordable for
most people. Increasing the housing stock would bring the
prices down. He acknowledged that homeowners were concerned
about housing values and would not want to lose equity.
However, housing costs accelerating at that level was an
unhealthier situation.
Representative Johnson voiced that younger people were
being priced out of the market and some could not save for
a down payment. She wondered how the market could be
addressed and what could AHFC do to help solve the problem.
Mr. Butcher responded that there were a few things AHFC was
working on. He mentioned that a bill was adopted in the
prior year that allowed it to reduce the amount of a
mortgage from 95 percent up to 97 percent allowing a lower
down payment. He shared that often a young buyer could
afford the mortgage payment but had difficulty affording
the downpayment. The program made AHFC on par with the
federal Fannie Mae and Freddie Mac [government-sponsored
enterprises]. In addition, the corporation started working
to create more affordable housing and formed another
subsidiary called the "Alaska Corporation for Affordable
Housing" based on a communities need while not impacting
the local private sector housing.
1:59:58 PM
Representative Allard asked Mr. Butcher to define the
difference between affordable housing and low income
housing. Mr. Butcher responded that those with lower
incomes and seniors on fixed income could not afford a
house. Therefore, some type of subsidy was needed. He noted
the corporation administered low income tax credits via the
Internal Revenue Service (IRS) and certain grant programs
to lower costs to a level that a lower income Alaskans
could afford, which was typically set at 60 percent of a
community's median income depending on the program. He
mentioned workforce housing and the factors that had
increased housing costs. He announced that Alaska was
worse than anywhere else He offered that there was a lack
of housing across the country. The cost of housing had
increased more than salaries had. He pointed to another
program included in last year's Capital Budget that
appropriated $4 million to AHFC to work with various
agencies that had land to free up for workforce housing. He
indicated that the program was in its infancy, and he hoped
to report on its successes in the following session. The
market was no longer taking care of itself and programs
like the one he described were necessary.
2:03:55 PM
Representative Allard commented about the effects of
illegal aliens and open boarders exacerbating the
situation.
Representative Galvin cited the bullet point regarding
"Rural Professional Housing leverages expiring federal
funds and jumpstarts construction in rural hubs;" She asked
how much of the federal funds were set to expire and
whether it would hinder completion of any projects. Mr.
Butcher responded that the dollars had come from the
Emergency Rental Assistance (ERA) funds for rent relief.
The assistance was limited to 15 months during the
pandemic. The corporation could use the unexpended funds
for other things like affordable housing. The deadline for
obligating the money was the end of September 2025. He
added that any money Alaska did not expend would be sent to
another state. Representative Galvin hoped Alaska could use
all its funds and appreciated that AHFC were doing its best
to expend all of it in Alaska.
2:06:26 PM
Mr. Butcher examined to slide 5 titled "AHFC Operations:"
300 employees statewide:
• Public Housing in 16 communities
• Federal funding supports approximately 1,600
units and more than 6,000 Vouchers
• Collaboration with 14 Regional Housing Authorities
• Alaska's Housing Finance Agency
• Administrator of federal Housing Tax Credits & grant
programs
• Residential Energy Focus
Mr. Butcher commented that AHFC was helping communities
with affordable housing that were not familiar with the
system and how to obtain it. He noted about half its
operations dealt with public housing and the other half
with mortgage, finance, etc. In 1993, AHFC merged with the
prior Alaska State Housing Authority and the outcome was
"phenomenally successful" and very efficient. The
corporation accomplished "a lot more" than any other state
due to the merger.
Representative Hannan if any of the 300 employees were
staffing the 14 regional housing authorities. Mr. Butcher
responded that they were separate entities, and its
employees were for its public housing and apartment voucher
programs. He noted that there was often a "stigma"
associated with living in public housing and the voucher
program helped alleviate that.
2:10:22 PM
Representative Hannan asked if anyone using the voucher
could rent from one of the regional housing authorities.
Mr. Butcher replied in the affirmative and added that there
was flexibility. The corporation ensured that there were no
life, health, or safety issues with the rental units.
Representative Allard commented that the legislature had
something moving forward to make Alaska Industrial
Development and Export Authority (AIDEA) a financial
institution to offer mortgages. Mr. Butcher responded that
he had worked with AIDEA, and they could already finance
commercial housing, comprising of anything over 4 units. He
stated that the focus of the bill was to prioritize
utilizing the authority. He was unsure of the details but
felt that any additional funding for housing was a good
thing.
Mr. Butcher continued with slide 5 and briefly mentioned
some aspects of its energy programs.
Mr. Butcher continued to slide 6 titled "AHFC Financial
Performance:"
• Cumulative dividends to the State total $2.246
billion.
• AHFC's dividend reflects 75% of adjusted change in
net position.
• FY24 mortgage and loan purchases total $606.9
million.
• AHFC is highly rated by credit agencies
• Moody's upgrade in April 2025
Mr. Butcher expounded that he had seen AHFC's part of the
market go up considerably from 12 percent to 20 percent to
50 percent of all mortgages in the state; by federal law,
AHFC could offer a lower interest rate and were highly
rated by credit agencies at AA+.
2:13:59 PM
Mr. Butcher continued to slide 7 titled "Mortgage
Portfolio
Statewide Mortgages
• 15,607 active loans
• Delinquencies and Foreclosures at historic lows
Mr. Butcher highlighted that the mortgage portfolio had
increased to $3.6 billion, and the average interest rate
was 4.54 percent which was increasing to the 5.5 to 6.5
percent range and kept people in their existing homes that
had a mortgage with a much lower interest rate. He
reiterated that 30 day delinquencies were at 2.58 percent
with foreclosures at one-tenth of one percent. He
attributed it to responsible Alaskans and underwriters.
Representative Bynum asked if the fees were built into the
interest rate. Mr. Butcher would follow up with the answer.
Mr. Butcher continued on slide 8 titled "Public Housing:"
Public Housing remains a star performer for HUD
• 1,600 units owned and maintained
• 6,000 vouchers
• Set-aside voucher programs for
• Youth aging out of foster care
• Survivors of domestic violence & sexual assault
• Veterans (VASH)
• Homeless Alaskans
(Stabilization & Recovery)
Mr. Butcher related that he had talked a lot on the topic.
He pointed to voucher programs for targeted areas where
there was an uptick in people entering homelessness, a
program for victims of domestic violence and sexual
assault, a program for homeless veterans, youth aged out of
foster care, and homeless Alaskans. He noted that the
veteran voucher program was partnered with the Alaska
Verteran Administration and was highly successful.
Representative Galvin voiced that it was important work.
She cited the 1,600 units that they currently had and
wondered whether there were enough units to meet the needs.
Mr. Butcher responded that the number had not increased in
many years and their focus was on vouchers. He explained
that currently there were more people with vouchers than
housing available.
2:20:09 PM
Representative Galvin asked if there were 6,000 vouchers,
how many people were waiting and whether AHFC had a sense
of scope or scale of what was necessary. She wondered
whether AHFC had a goal of a certain number of units the
corporation hoped to build or assist in building. Mr.
Butcher responded that family size and needs were different
depending on the community. He thought that AHFC was merely
"chipping away" at the need. He furthered that the
Department of Housing and Urban Development had limits
reflected in federal law that prevented AHFC from approving
a single person to move into a large apartment, etc. and
the waiting list was significant. Representative Galvin
asked him to provide more information. Mr. Butcher would
provide the information.
MR. Butcher continued on slide 9 titled "Planning
Department:"
Funded 8,036 units across 139 communities
• 218 properties with 1,468 units were located in
rural communities.
• 157 properties were funded through Low Income
Housing Tax Credits with 5,784 units.
• 33 properties with 436 units were funded in
partnership with Alaska Mental Health Trust Authority
through the Special Needs Housing Grant (SNHG).
MR. Butcher pointed out that the planning department played
a role in trying to create affordable housing via
administering the programs. He shared that they worked with
many different organizations that were willing to partner
with them in many communities in the state.
Representative Galvin asked how long it took to fund 8,036
units. Mr. Butcher would follow up. He guessed that it took
around 35 years limited to about 100 per year.
2:24:48 PM
Mr. Butcher continued on slide 10 titled "Rural
Professional Housing/Last Frontier Housing Initiative:"
2025 Rural Professional Housing Awards
• Awarded funding to build/renovate 21 rural
professional housing units in Toksook Bay, Minto,
Fort Yukon, Shageluk, Galena, Naknek, Tok and
Noatak.
Last Frontier Housing Initiative: Western Alaska
• 24 professional and 9 low income units under
construction in Bethel, Nome and Kotzebue.
Last Frontier Housing Initiative: Southeast Alaska
• 14 low income units are nearly complete in Ketchikan
and 10 units are under construction in Sitka.
Representative Stapp cited the corporation's work with the
Cold Climate Research Center (CCRC) in Fairbanks. He
reported that the state had appropriated funds to work
with CCRC to help solve the rural housing problems. He
noted that there was no longer an appropriation for the
program. He asked what impact on housing they foresee due
to the loss of the collaboration. Mr. Butcher confirmed the
longstanding collaboration with CCRC. He elucidated that
AHFC did not work with them on developing housing as much
as developing ways to improve housing efficiency.
Historically, the CCRC had done statewide inventory studies
on how many houses were needed in every community across
the state, etc. The data helped instruct AHFC on the
direction it needed to go in developing housing.
Representative Stapp asked if the collaboration could be
maintained in the future. Mr. Butcher responded in the
affirmative and stated that they had other programs that
both entities worked on outside the Capital Budget
appropriation that Representative Stapp referenced.
2:28:02 PM
Mr. Butcher advanced to slide 11 titled "New Home
Construction Rebate:"
Homebuyers building or purchasing a newly constructed
home could be eligible for $10,000 if:
• Property will be owner-occupied;
• Restricted to single-family residences, duplexes,
triplexes and fourplexes where the homeowner occupies
one unit;
• Foundation was completed and inspected on or after
January 2, 2025;
• Meets a minimum 5-Star Plus or higher energy
efficiency standard;
• Not available for developers, investment properties
and non-residential buildings.
Mr. Butcher spoke to the new home construction rebate that
began in January 2025 and reported that there were 100
applications so far. He anticipated increased new housing
starts as a result of the program.
MR. Butcher mentioned slide 12 titled "FY25 Governor's
Proposed Capital & Mental Health Budgets" that contained
the list of its capital budget requests.
Mr. Butcher continued to slide 13 titled "Subsidiary
Spotlight: Alaska Corporation for Affordable Housing:"
Anchorage • Loussac Place: 120 multi-family units
• Susitna Square:18 low-income family units
Ridgeline Terrace: 70 mixed-income units
Fairbanks • The Meadows: 18 senior units
• Borealis Park: 40 multi-family units
• Opened Fall 2024 Valdez
• 20 units
• Expected to be completed early 2026
Mr. Butcher elaborated that AHFC developed the Alaska
Corporation for Affordable Housing (ACFAH) subsidiary
corporation roughly 12 years prior via legislation to
expand the corporation's powers working with developers.
They began in Anchorage as a testing ground. The program
expanded and currently it was looking at every regional hub
possible. He commented that the program was very
successful and was almost entirely funded with federal
funds and IRS federal tax credits. The program did not
utilize any AHFC or state dollars yet enabled AHFC to begin
chipping away to increase the amount of housing in
communities.
Co-Chair Foster referred to a project in the Chester Creek
area of Anchorage to develop housing. He wondered whether
AHFC was participating in the project. Mr. Butcher
responded that the parties were looking at developing the
Sullivan Arena area and he had engaged in discussions with
them. The corporation willingly engaged with any community
that had ideas regarding developing housing. He believed
that the project was promising and could deliver affordable
housing as well as market rate housing. He deduced that 50
to 100 units would transform the area.
2:33:57 PM
Representative Hannan cited slide 12 and pointed to the
AHFC projects in the governor's capital budget. She asked
which ones were in and which were out. Mr. Butcher did not
think he was the right person to ask.
Co-Chair Schrage offered to follow up with details.
CSSB 57(FIN) was HEARD and HELD in committee for further
consideration.
2:34:59 PM
AT EASE
2:39:08 PM
RECONVENED
Co-Chair Foster took over chairing for the meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB113 Additional Documents - CCH AnswersConnect - Apportionment Formulas.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB113 Additional Documents - CCH AnswersConnect - Market Based Sourcing.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB113 Public Testimony Rec'd by 4.16.25.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB113 Sectional Analysis ver A, 4.16.25.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB113 Sponsor Statement Ver A, 4.16.25.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB113 Sponsor's Powerpoint, 4.16.25.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 113 |
| SB 57 250502-HFIN-AHFC-OVERVIEW...pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 57 |
| SB 57 250502-HFIN-AHFC-OVERVIEW Final.pdf |
HFIN 5/2/2025 1:30:00 PM |
SB 57 |