New ‘cottages’ near downtown Anchorage seen as one possible solution to city’s housing shortage

A clutch of small new houses on a busy street near downtown offer what city officials say is a rarity -- new home ownership opportunities at relatively low prices in the heart of Anchorage.

At 840 square feet or less, the five tightly aligned, two-story units at 11th Avenue and Cordova Street aren’t much bigger than a typical one-bedroom apartment.

City officials say the houses represent an experiment in urban planning that might help address Anchorage’s housing shortage. They’re listed for $224,000 or less, close to half the price of the average home-sale price in the city. Homeowner dues for maintenance like snow removal would add a monthly cost.

“This provides housing we don’t have much of, a smaller house downtown, that are not rentals,” said Michelle McNulty, planning director for the municipality. “The design is comparable to surrounding residences. It’s a little more density on the property, but in a way that’s in character with the neighborhood.”

An unusual plan from a ‘hobbyist’ developer

Structural engineer Seth Andersen built the “cottages” in the South Addition neighborhood where he lives.

The dwellings feel bigger than they are, thanks to peaked ceilings, open kitchens and lots of natural light.

But after more than a month on the market, none have sold yet.

The units are listed for sale as condominiums. But they look like individual structures, with one to two bedrooms. They’re uniquely designed, with the smallest one red, the others blue and grayish.

“We wanted to give each one a little of its own character,” said Andersen, 38 and a former Anchorage Planning and Zoning commissioner.

Andersen said he and Bonnie DeArmoun, his wife and business partner, don’t expect to make money by selling them, he said.

Instead, they built them to see if they could create affordable, attractive houses in the city’s core, said Andersen, who calls himself a “hobbyist” developer.

“National trends are younger people want to live closer to downtown in an attractive space, but there aren’t a lot of options,” said Andersen. “Most housing in Anchorage is generally pretty old, often a 40-year old junky house.”

The cottages might be perfect for a single professional or a couple, said Andersen.

Bill Popp, president of the Anchorage Economic Development Corp., said home construction in Anchorage has fallen short of need by about 400 units a year, based on a long-term outlook completed in 2012.

Though Anchorage’s population has shrunk in recent years, the housing shortfall has helped push single-family home prices past $400,000 on average, a record, he said.

Andersen said people often believe that large developments with, say, 50 units, can best address the city’s housing problems, he said.

But small housing projects in pre-developed areas can be more affordable, leading to lower mortgages or rent, he said.

Those small developments often don’t need costly utility extensions and large parking lots like their big counterparts, he said. Smaller developers can get by with less overhead, and demand less profits because risks are reduced.

A ‘creative’ solution

Despite objections from the South Addition community council, the Anchorage Assembly agreed to allow a rezone of the small 7,000-square-foot lot in 2017. That allowed five units to be built, up from four, making the project more economical, Andersen said.

Andersen said the rezoning was in line with the 2040 municipal land-use plan for that area, proposing redevelopment south of 11th Avenue.

Neighbors were concerned the project would crowd too many people and units into a single property, creating a conflict with single-family homes in historic Pilots Row just to the north, where many of the state’s early aviators once lived.

Another concern included excess traffic and parking on 11th Avenue that could increase the chance for accidents and limit emergency vehicle access as winter snow berms pile up.

The cottages have no garages -- each has a single designated parking space. There’s additional parking on the street, and a People Mover bus stop just outside on Cordova Street.

The Assembly imposed limits on the project to help the development blend into the neighborhood, including limiting building heights to 35 feet.

Zoning limits allow only two buildings on the lot. To get around that, four of the cottages were inconspicuously adjoined by connecting utility rooms, rather than living-space walls.

Chris Constant, the Anchorage Assembly member for downtown, said the units can open the door to home ownership at a cost that’s not much more than rent.

“We have a housing problem and these are a creative solution,” he said.

Project sparked neighborhood plan

The units are across Cordova Street from the Fairview neighborhood, with its abundance of apartment buildings and multiplexes.

Paul Fuhs, a lobbyist who lives just to the east of Pilots Row and can see the new units from his house, said he always supported them. He said the market needs homes that young people can afford.

He said before, the lot was overgrown with brush and seemed to attract people under the influence of drugs or alcohol. “So this is a real improvement over that,” he said.

Hans Thompson, vice president of the South Addition community council, said the council’s original concerns over the project prompted the group to draft its first plan to guide development.

The neighborhood south of downtown is changing, with young families replacing older residents, he said.

Residents typically oppose the “upzoning” that leads to denser development like the cottages, he said. They view any encroachment as a foot in the door that could hurt the neighborhood’s character, he said.

Neighborhoods will need to be open to innovative ideas like the cottages for Anchorage to meet housing demands, said Constant, who wasn’t on the Assembly when the rezoning was approved.

“This is the solution that people need,” Constant said.

Correction: An earlier version of this article incorrectly said Paul Fuhs lives in Pilots Row. Fuhs lives just to the east of Pilots Row.