Alaska leaders must coordinate to use federal housing funds, say authors

In a column published by the Anchorage Daily News, Shauna Hegna and Mike Huston argue that Alaska has a narrow window to restart its stalled homebuilding engine by coordinating state resources with new federal housing dollars. Hegna, the president of Koniag, and Huston, the president and CEO of Northrim Bank, serve as chair and vice-chair of the Housing Alaskans board of directors, and they write that the bipartisan ROAD to Housing Act offers Alaska a rare federal opening—but only if state leaders build a unified plan to use it. The Juneau Empire also carried the column.

The authors describe a housing market broken at both ends of the state. Try building a home in rural Alaska, they write: you may spend years chasing dozens of funding sources just to pay for it, and you still will not have driven a single nail. In the 80 percent of Alaska communities lacking road access, all lumber, fasteners, and many skilled workers have to be transported by air or barge, driving construction costs up to $800 per square foot—quadruple the national average. Appraisers have difficulty determining what a home is worth when almost nothing sells nearby, they add, so standard loans do not always work.

Priced out in cities and villages alike

Yet the crisis is not only a village problem, Hegna and Huston write. In Anchorage, Fairbanks and other road-connected towns, working families cannot find homes they can afford because building costs outrun what the market can pay. Employers, hospitals, the military and the university all struggle to house the people they need, and zoning rules and permit delays add to the challenge. A teacher in Anchorage and a health aide in a Bering Sea village face different housing obstacles, the authors note, but both are priced out of a place to live. Their families, their communities and Alaska’s economy pay the price.

A single family home under construction in Potter Highlands on Tuesday, April 27, 2021. (Bill Roth / ADN) — Photo: adn.com

Congress, they write, has just handed Alaska a new opening. The ROAD to Housing Act provides federal housing funding and regulations better suited to rural areas, such as quicker environmental reviews, increased factory-built housing, disaster recovery assistance and expedited building on vacant or underused parcels. But money alone does not build homes, the authors caution. Whether Alaskans in cities and villages see the benefit depends on whether state leaders are ready.

From scattered programs to a statewide strategy

Hegna and Huston contend that Alaska is not beginning from zero: the Alaska Housing Finance Corporation already administers numerous housing programs, additional state programs manage related initiatives, and state-controlled funds could help fund workforce housing. Regional housing authorities, tribes, employers and builders have the necessary expertise and are poised to build more. What is missing, they write, is a plan that brings it all together. Today, projects wade through separate applications, deadlines and rules, and the paperwork alone can sink them. A collection of programs is not a statewide housing strategy.

The column lays out five steps Alaska could take, drawn from a roadmap offered by the National Housing Crisis Task Force. The steps are to lead with a statewide plan by making housing a priority, setting a production goal and putting someone in charge of delivering results; put public land to work by making vacant and underused land available so projects pencil out; fill the financing gap by seeding a loan fund with public and philanthropic dollars and recycling the repayments to finance the next round of homes; build cheaper by scaling technology and materials innovations like modular and factory-built homes and building tough, energy-efficient homes that cost less to heat; and cut red tape by helping local governments allow more kinds of homes in more places and approve them faster. Do all five together, Hegna and Huston argue, and the impact multiplies.

Coordination unlocks stalled millions

To show what coordination looks like in practice, the authors point to the Housing Alaskans Public Private Partnership, which pooled $3 million from public, private and philanthropic sources to accelerate completion of 292 homes in 27 projects across 19 communities. Every project had been thoroughly reviewed by several funders yet remained stuck, slightly short of complete financing. That $3 million released roughly $100 million that had been invested but not yet spent, and accomplished this without adding paperwork burdens, lowering the developer’s expenses and speeding up move-in dates.

Imagine that approach applied to federal dollars, Hegna and Huston write: state, philanthropic and private partners coordinating the investments, conducting joint reviews and attaching fewer strings. Projects would be completed more quickly, price increases would cause less damage, and federal funds could be adapted to the terrain they reach, be it permafrost or a vacant lot in Anchorage.

The window is open, but it will not stay that way, the column concludes. Alaska must be ready to claim these new resources and coordinate them with its own if it is serious about addressing housing as an essential infrastructure need for its economy and communities. Alaska has the assets, the expertise and the institutions, Hegna and Huston write. What is needed now is the will to bring it all home, literally.