Anchorage might see apartment vacancies climb this year

Anchorage landlords appear to be seeing more effects of the slowing Alaska economy.

More people moved out of the city than moved here last year, and some property owners are finding it harder to get units rented.

Tyler Robinson, director of development planning and finance at Cook Inlet Housing Authority, said at a real estate forecast luncheon last week that while "anecdotally," the agency's housing stock is "still well below 5 percent vacancy," he's heard that number is creeping upward for some.

"Talking to other property owners, they are seeing some vacancy rates above 5 percent, climbing up to 7 percent, and being pretty aggressive when it comes to pricing those units," he said.

[Rents across Alaska are holding steady]

Jeff Troiano owns eight apartments in Spenard, and said it's been harder than usual lately to fill a couple of them. Several of his units go for around $1,600 per month.

"I've had an interesting turnover over the last year of tenants," he said. "Virtually 100 percent sweep of my tenants. They usually stay two years."


He also owns a house in Eagle River that he rented out steadily for seven years. He tried to sell it, then put it back on the rental market, but couldn't find anyone to lease it from June through September last year.

Now, he's even considering dropping the rent on a couple of his apartments to incentivize someone to move in.

He's not the only one. Anchorage real estate company Debenham Properties has both residential and commercial property in town. Shaun Debenham, vice president of acquisitions and development, said it's not uncommon for landlords to offer rent discounts during the frigid winter when it might otherwise be tough to find new tenants for multifamily properties. But lately, the economic downturn is a compounding factor.

"I'd definitely say the market has softened more so than in the past, and it's not just because of winter," Debenham said. His company has a vacancy rate of about 4 percent for its residential Anchorage properties.

Debenham Properties right now is offering prospective new tenants a 5 percent rent discount — more than the typical seasonal deal, Debenham said.

The company is also offering a move-in special that includes $300 off the first month's rent, something it hasn't done in the past. At Debenham's Northwood Apartments property off Raspberry Road, for example, a one-bedroom costs around $1,600.

"I think we have seen a lot of higher-end jobs leave Alaska. Like when oil companies are laying off, it affects a lot of other higher-paying jobs down the line," Debenham said. "And for me, that's my clients, these higher-end people."

Although the oil and gas sector was one of the worst hit by job losses last year, the effects of those layoffs are now rippling into other industries.

[Anchorage commercial real estate vacancies expected to go up in 2017]

The vacancy rate for rental properties in Anchorage was 3.8 percent last year, down very slightly from 3.9 percent in 2015, according to numbers from the Alaska Department of Labor and Workforce Development. It was significantly higher a few years ago, at 6.9 percent in 2006 before dropping to less than 2 percent in 2010.

There's no consensus about what an ideal vacancy rate is, an August report from the labor department said, though it's usually "considered to be between 6 and 7 percent."

Robinson, from Cook Inlet Housing Authority, said he believes the vacancy rate in Anchorage won't surpass 7 percent in 2017 — "still a healthy market by most measures."

"We still have such a dearth of quality rental, however, that unless you are looking to rent an old product, or a larger home or condo, there are limited options in the market place," he said in an email.

Karinne Wiebold, an economist with the labor department, also said there's reason to think the vacancy rate will go up this year. But the state doesn't conduct a forecast of those numbers.

Anchorage actually grew last year compared to 2015, by 323 people. But the net growth was thanks to a natural increase — more people being born than dying. The city still lost nearly 2,600 people due to out-migration.

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.