I heard there was a shortage of affordable housing in Sitka, and I have since learned thatthis is an understatement. At first I thought of buying a condo or a small home. I figured I could find a nice little condo - I was wrong. A comparable condo like the ones I was looking at in Juneau for $150,000-180,000 started at $260,000 in Sitka. A study by Agnew: Beck Consulting, LLC prepared in September 2005 entitled "Affordable Housing in Sitka: A Report to the Sitka Long Range Planning & Economic Development Commission" estimates the median priced home in the year ending July 2005 was $273,000, which is 18 percent higher from 2004.
I decided to look for rental housing. Again, I found that I was naive about the housing shortage in Sitka. When I visited Sitka I enlisted a real estate agent to help me find a place. The agent had one place listed for rent and that is where I am living now. I can't complain about my apartment. It's cute, small, and a little dark but in walking distance to work. However, with the cost of utilities and rent I am paying well over what I would pay in Juneau for a comparable apartment.
There are many problems that lead to the affordable housing crisis in Sitka according to the Beck Consulting report:
* Nationwide: interest rates are low, the economy is stable, the baby boom is inheriting billions.
* Sitka's population and economy continues to grow.
* Local demand is supplemented by pressures from outside community - for seasonal rentals, retirement homes.
* Land for new development in Sitka is severely limited; buyers can't shift their demand to outlying, low cost properties.
* Local developers prefer to build standard market rate single family houses because it is seen as being simpler to develop and more lucrative.
The result: rapid price escalation - 80 percent of the housing on the market in August 2005 is being offered at prices over $300,000 up from 33 percent in the August 2002-August 2003.
Meanwhile, according to "Affordable Housing in Sitka: A Report to the Sitka Long Range Planning & Economic Development Commission," the average incomes are flat and declining. Populations, payroll and the number of jobs in Sitka have returned to levels matching the early 90' but the average incomes have declined. The Sitka economy is increasingly dominated by lower paying service jobs. According to the State Department of Labor and Workforce Development, from 1993 to 2003, "Sitka's inflation - adjusted average individual monthly earnings dropped from 2,100 to 1,800." These low wages make it impossible to afford to live in Sitka.
I always knew in college that I would live in Juneau or at least Southeast Alaska. Young Sitkans have a difficult and sometimes an impossible time finding housing. Therefore, they have no choice but to move out of Sitka in search of affordable housing.
Professionals who would like to come to Sitka to start their career either have to turn down the jobs offered to them or deplete savings and cross their fingers that everything will work out, like I have done. Some say that the most valuable resource for a town is its young people. Sitka is losing this valuable resource due to a myriad of financial contentions.
Income is a factor in Sitka's housing problem but it is not the crux the issue. There is not enough available land in Sitka for housing. It is important that Sitka develop an infrastructure to open new areas for housing development. This will take collaboration between many different groups. Sitka needs to enlist the assistance of State and Federal government for funding, contractors for building, and employers to analyze the demand for different types of housing.
Plans to expand roads and other infrastructure for housing will benefit the community by not only providing housing but also improving access to resource development and recreation areas.
Sitka is moving forward to remedy this housing problem. In the course of writing this article I was invited by the City of Sitka to participate in a Sitka Housing Forum. The forum will include reviews of the potential development sites in Sitka, Sitka Infrastructure capacities, and housing needs surveys from the community. The forum will also address the structure of housing program(s) and how to sustain an affordable housing program.
Sen. Stedman is working hard in the Legislature to find viable options to the housing problem in Sitka. Stedman secured $5 million for Sitka for developing the Benchlands. The Benchlands is a 200 lot University of Alaska tract above Halibut Point Road and is viewed as the next major area for opening up new land for housing by the city. Sitka is moving forward to address their housing crisis in the hopes to open up new housing possibilities in Sitka. The community of Sitka must continue to advance the issue of affordable housing in hopes to promote the future of Sitka.
Keikkala was raised in Juneau and recently moved to Sitka to become the executive director of The Greater Sitka Chamber of Commerce.