Legislature(2023 - 2024)BARNES 124
02/08/2023 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Affordable Housing Hearing | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 8, 2023
3:15 p.m.
MEMBERS PRESENT
Representative Jesse Sumner, Chair
Representative Justin Ruffridge, Vice Chair
Representative Mike Prax
Representative Dan Saddler
Representative Stanley Wright
Representative Ashley Carrick
Representative Zack Fields
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
AFFORDABLE HOUSING HEARING
- HEARD: AFFORDABLE HOUSING HEARING
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MARK ROMICK, Deputy Director
Alaska Housing Finance Corporation
Anchorage, Alaska
POSITION STATEMENT: Gave a PowerPoint presentation on the
Alaska Housing Finance Corporation during the Affordable Housing
Hearing
ERIC VISSER, President
Alaska Home Builders Association
Anchorage, Alaska
POSITION STATEMENT: Gave a presentation on the Alaska Home
Builders Association during the Affordable Housing Hearing.
TODD MCMANUS, President
Alaska Bankers Association
Ketchikan, Alaska
POSITION STATEMENT: Gave a Presentation on the Alaska Bankers
Association
CHRIS KOLEROK, Legislative Committee Chair
Association of Alaska Housing Authorities;
Director
Public Policy for Cook Inlet Housing Authority
Anchorage, Alaska
POSITION STATEMENT: Offered information regarding the
Association of Alaska Housing Authorities during the Affordable
Housing Hearing.
ACTION NARRATIVE
3:15:44 PM
CHAIR JESSE SUMNER called the House Labor and Commerce Standing
Committee meeting to order at 3:15 p.m. Representatives Prax,
Ruffridge, Wright, Carrick, Fields, and Sumner were present at
the call to order. Representative Saddler arrived as the
meeting was in progress.
^AFFORDABLE HOUSING HEARING
AFFORDABLE HOUSING HEARING
3:16:14 PM
CHAIR SUMNER announced that the only order of business would be
the Affordable Housing Hearing.
3:16:47 PM
MARK ROMICK, Deputy Director, Alaska Housing Finance
Corporation, gave a PowerPoint presentation on the Alaska
Housing Finance Corporation during the Affordable Housing
Hearing [hard copy included in the committee packet]. As shown
on slide 2, he stated that the mission of AHFC is "to provide
Alaskans with safe, affordable, quality housing."
3:18:28 PM
MR. ROMICK continued to slide 3 and stated the number of units
and vouchers that AHFC has. He added an explanation on the
difference between public housing and the voucher program for
rental assistance. He said that they work closely with the
regional housing authorities and have sub-groups for providing
housing assistance to different groups of people.
3:20:00 PM
MR. ROMICK added that AHFC has job and skill training programs
to help people end their reliance on housing assistance. He
stated that 70 percent of its budget is federally funded. He
added that AHFC does not compete with banks for mortgages;
saying that AHFC buys them from banks and offers programs for
housing assistance. He continued that there are several
projects that will be completed by 2024 in the Fairbanks area.
3:23:29 PM
MR. ROMICK continued to slide 5 and gave the definition of
affordable housing used by AHFC: "a household spending no more
than 30 percent of their gross income on monthly payments,
including utilities." He stated that income below 50 percent of
median income is considered low, and added that in Alaska, that
number is 60 percent.
3:28:14 PM
MR. ROMICK continued to slide 7 and gave the numbers for the
COVID rental assistance program, stating that most of the money
came from the state, but money was also received from the
Municipality of Anchorage and the fourteen regional housing
authorities. He stated that the emergency vouchers received
from the Department of Housing and Urban Development were split
evenly between Anchorage and the rest of the state.
MR. ROMICK continued to slide 8 and stated that the rental
assistance program helped get money to landlords to keep the
rate of eviction down during the pandemic. He continued that
the leftover money from the program was used to help people with
unstable housing find more permanent housing.
3:32:54 PM
MR. ROMICK continued to slide 9 and stated that the homeowner's
rental assistance helped homeowners with three months of
mortgage payments and helped those who were delinquent on their
loans. He continued that the AHFC worked with the banks on
behalf of the homeowners rather than paying the homeowners
directly.
3:35:47 PM
MR. ROMICK continued to slide 10 and stated that AHFC does
market studies on all developments financed by the corporation
to meet federal requirements of not overbuilding in an area. He
said that AHFC keeps a database of energy efficiency ratings for
use on new construction and rehabilitation projects.
MR. ROMICK continued to slide 11 and stated that vacancies in
rentals were lower in 2022 than the ten-year average. He
continued that rents had been increasing but are now starting to
level out. He said that there were not definitive numbers on
the effects of short-term rentals, particularly in areas with
high numbers of tourists.
3:40:17 PM
MR. ROMICK added that the rise in interest rates is causing the
housing market to slow down, as homeowners have a more difficult
time getting the price they would have been able to before. He
continued that the cost of supplies is stabilizing but remains
very high, and has caused some issues with overcrowding,
particularly in rural Alaska. He concluded that there are not
enough non-profits to help everyone, and the solution involved
making it feasible for the private sector to build again.
3:46:06 PM
REPRESENTATIVE FIELDS asked if AHFC had considered developing
any of the empty lots in downtown Anchorage, Alaska, and whether
fixing ground contamination in any of them would be a qualifying
expense.
MR. ROMICK answered that while remediation is generally an
eligible expense, it has the potential to limit the project that
can be built due to the cost. He said that AHFC has been
discussing the possibility of developing parking lot 102 in
downtown Anchorage with the municipality for several years.
3:49:17 PM
REPRESENTATIVE CARRICK asked about the relation between the cost
and availability of building materials and the inability of the
private sector to develop more.
MR. ROMICK answered that availability of building materials has
improved and costs remain high.
3:50:54 PM
REPRESENTATIVE SADDLER asked about the short-term and long-term
effects of the emergency COVID assistance money on the housing
rental market.
MR. ROMICK answered that in the short-term, the assistance money
ensured that landlords would still receive payments, and that
the long-term would depend on whether the renters were able to
succeed on their own and stay in their current housing.
3:52:53 PM
REPRESENTATIVE GRAY asked about the structure of AHFC.
MR. ROMICK answered that any income generated by AHFC comes from
interest payments, and that that money is used to support the
operations of AHFC.
REPRESENTATIVE GRAY asked if the dividend provided by AHFC is
required by statute or if it can be used for other purposes such
as helping the homeless.
MR. ROMICK answered that the dividend is used to fund certain
projects, including assistance for the homeless.
3:55:50 PM
REPRESENTATIVE PRAX asked about the focus of AHFC in relation to
financing versus managing grants and subsidies.
MR. ROMICK answered that all of AHFC's mortgage activity is
financing and makes up most of the corporation's activity. He
continued that their project management duties are a result of
contracts they have with the federal government.
3:57:55 PM
REPRESENTATIVE WRIGHT asked how many vouchers were given out the
previous year and who decides the criteria for receiving a
voucher.
MR. ROMICK answered that the vouchers coming from the federal
government carried a stipulation to work with local and state
homelessness coalitions.
3:59:44 PM
REPRESENTATIVE PRAX asked what AHFC's market share is.
MR. ROMICK answered that AHFC's market share of mortgages is
roughly 20 percent, which he said has remained relatively
stable. He added that AHFC manages 1600 rental units, which is a
low number for the state.
4:01:12 PM
REPRESENTATIVE RUFFRIDGE asked what the timeline was for someone
seeking mortgage assistance from AHFC.
MR. ROMICK answered that he was unsure of the exact number of
days, but AHFC was working to automate certain processes to
reduce the amount of time spent waiting.
4:02:40 PM
ERIC VISSER, President, Alaska State Home Builders Association,
stated that the association is an organization that allows
different trades in the residential construction industry to
come together and work on challenges and problems together. He
stated that another function of ASHBA is furthering construction
education for contractors for the purpose of allowing them to
renew their occupational licenses.
4:05:49 PM
MR. VISSER stated that AHFC's 2018 housing assessment projected
a shortfall of approximately 16,000 housing units, and that
Alaska would need 25,000 additional housing units by 2025.
4:08:14 PM
REPRESENTATIVE SADDLER asked about the residential construction
workforce.
MR. VISSER answered that more homes would be built if there were
more workers, and one idea that ASHBA had was to go to high
schools and teach students about the possibilities of a career
in residential construction.
4:09:31 PM
REPRESENTATIVE PRAX asked Mr. Visser if he was part of the
housing discussion pertaining to the Fairbanks North Star
Borough.
MR. VISSER answered that he was not.
4:09:54 PM
REPRESENTATIVE GRAY asked what the Legislature could do to
create residential housing construction boom.
MR. VISSER answered that ASHBA believed it would be helpful if
the energy rebate program was reinstated, and for larger
developments such as Housing Alaska to help foster public and
private partnerships to seek out tax credits.
4:11:25 PM
REPRESENTATIVE SADDLER asked what the parameters are for
homebuilding operations in Alaska in relation to accessory
dwelling units.
MR. VISSER answered that he is supportive of accessory dwelling
units but that they are currently cost prohibitive.
4:12:36 PM
REPRESENTATIVE PRAX asked if Mr. Visser had looked at the
locally graded lumber bill that the Governor is considering
introducing.
MR. VISSER answered that he believes it would be beneficial for
the state.
4:13:18 PM
REPRESENTATIVE RUFFRIDGE asked if the regulations for accessory
dwelling units were decided on the municipal level and if the
state could do anything to make building them more feasible.
MR. VISSER answered that accessory dwelling unit regulations are
decided on the local level, and that the only state level
legislation on them that he knew of was in Oregon.
4:14:20 PM
TODD MCMANUS, President, Alaska Bankers Association, stated that
the Alaska Bankers Association is comprised of the seven banks
with physical locations in the state of Alaska. He said that
the member banks of the association provide 85 percent of non-
public lending in the state of Alaska. He said that the
association supports any efforts to create housing for Alaskans,
as it believes that it is an essential building block of the
economy.
4:17:30 PM
MR. MCMANUS stated that the Alaska Bankers Association works
closely with Alaska Housing on mortgage activities and said that
Alaska Housing is a much-needed resource in Alaska as many of
the federal programs do not cover certain areas in Alaska. He
stated his belief that the state should open more land for
building housing in the Southeast region of Alaska.
4:20:00 PM
MR. MCMANUS said that in addition to single family housing,
there is a great need for additional workforce housing in
Southeast Alaska to accommodate seasonal workers in the fishing
and tourism industries.
4:22:21 PM
REPRESENTATIVE CARRICK asked how much of rural Alaska would
qualify as a "loan desert" without in-state assistance programs.
MR. MCMANUS answered that large portions of Southeast Alaska
would qualify due to limited road access and added that he was
unsure about the rest of the state.
4:23:47 PM
REPRESENTATIVE GRAY asked what the legislature could do to build
the workforce.
MR. MCMANUS answered that reigniting interest in trade school
among high school students would help build the residential
construction workforce. He added that for the general workforce,
people need places to live and do business.
4:26:22 PM
CHRIS KOLEROK, Legislative Committee Chair, Association of
Alaska Housing Authorities; Director, Public Policy for Cook
Inlet Housing Authority, gave a PowerPoint presentation on the
Association of Alaska Housing Authorities [hard copy included in
the committee packet]. As shown on slides 3 through 5, he
stated that AAHA is a membership organization of the fourteen
regional housing authorities in the state of Alaska. He said
that the two main functions of AAHA are to provide training and
technical assistance to the regional housing authorities and
advocate for them.
4:28:53 PM
MR. KOLEROK added that the regional housing authorities develop
affordable housing and provide maintenance and upgrades for
older housing for the purpose of preservation. He said that one
of the requirements for the grants that AAHA receives is
building the homes to be highly energy efficient.
4:31:52 PM
MR. KOLEROK continued to slides 7 and 8 and stated that the AAHA
member organizations have a great economic impact on Alaska
through job creation and money being spent in the state.
4:34:24 PM
MR. KOLEROK continued to slide 10 and stated that 40 percent of
housing is considered overcrowded in certain regions of Alaska,
and that the problem is most prevalent in rural Alaska. He
continued to slide 11 and said that the number of homes being
built has dropped significantly since the 1990s.
4:36:51 PM
MR. KOLEROK continued to slides 12 and 13 and stated that the
supplemental housing development grant is a flexible grant that
can be used for building new housing, rehabilitating housing,
and construction of utilities for housing. He continued that the
grant only covers 20 percent of the cost, so when building a
project AAHA must secure other funding to go along with it.
4:38:01 PM
MR. KOLEROK continued to slides 14 through 16 and stated that
many homes in rural Alaska have incomplete plumbing. He
continued that many homes have 1 star energy ratings and there
is a great cost to keeping them heated during the winter. He
said that weatherization is an important way to keep homes from
becoming decrepit and improve their energy usage.
4:40:54 PM
MR. KOLEROK continued to slides 18 through 21 and stated that
the greatest barrier to more housing is the cost of materials,
labor, and logistics. He continued that infrastructure
sometimes must be built to move the building materials to the
site, adding to the cost.
4:44:50 PM
MR. KOLEROK continued to slides 22 through 26 and stated that a
home building kit includes only what is within the walls of a
house and not the concrete and steel used to support the
foundation. He added that the cost of homes has increased at a
greater rate than inflation. He said that federal funding for
Indian housing has not kept up with inflation.
4:49:39 PM
MR. KOLEROK continued to slide 29 and stated that nearly half of
the homeless population in Anchorage, Alaska, are people of
Native Alaskan descent. He continued that 18 percent of people
that are homeless in Anchorage became homeless before the age of
18, 38 percent have mental health or addiction issues, and 22
percent have experienced domestic violence.
4:52:14 PM
MR. KOLEROK continued to slides 30 and 31 and stated that there
is more to helping the homeless than just giving them a place to
live, because they have adapted to becoming homeless and have to
unlearn certain habits. He said that AAHA has suffered $1
million in damage as a result of moving homeless people into
housing without any preparation.
4:55:50 PM
MR. KOLEROK continued to slides 32 through 37 and stated that
there are several different levels of home living assistance,
ranging from people living independently to group living
facilities that offer in-home assistance to the people living
there.
5:01:00 PM
REPRESENTATIVE GRAY asked: about the low number of houses being
built in the Ahtna, Incorporated ANCSA region.
MR. KOLEROK answered that the area already has a low population
and certain capital requirements.
REPRESENTATIVE GRAY asked about the possibility of 3D printed
houses in Alaska.
MR. KOLEROK answered that building in rural Alaska requires
using materials that anyone can build or fix, because of the
immense cost in time and money that would occur if they needed
to bring in a specialist for any new construction or repairs.
5:04:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:04 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AAHA presentation for L&C committee 2-8-23.pdf |
HL&C 2/8/2023 3:15:00 PM |
|
| HLC Final.pdf |
HL&C 2/8/2023 3:15:00 PM |