OPINION: On zoning changes, let’s slow down and get this right

I applaud Assembly Members Kevin Cross and Meg Zaletel for their intent to “start a conversation” about making changes to residential zoning to address what has been characterized as a housing shortage. If Anchorage is going to grow, it is going to need to do something to increase its residential density.

My concern is the immediacy they’ve attached to their proposal. It took many years and broad community input to make the most recent revisions to Title 21 (the municipal codes covering zoning), and I don’t see anything currently in the rental market that supports their sense of urgency on this issue. First, let’s look at price. Alaska’s Department of Labor and Workforce Development (ADLWD) posts residential rental costs and vacancy rates for Anchorage. In 2010, the adjusted median rent was $1,042 per month. In 2022, and the adjusted median rent was $1,339. This means that over these 12 years, Anchorage rents increased by 28.5%. Sounds big until you compare it to how much the U.S. dollar inflated over the same period: 34.2%. In other words, the rents here, when adjusted for inflation, have dropped 5.2% since 2010.

As for supply, ADLWD states that the 2010 the vacancy rate for Anchorage was 1.8% and in 2022, it was 3.2%. This represents an increase of 1.4% in the number of vacant units. And, because of stagnant or decreasing demand, it is likely that the vacancy rate will either stay the same or continue to fall. The U.S. Census Bureau estimates that as of July 2022, Anchorage had a population of 287,145. In April 2010, our population was 291,826. So, over these 12 years, we lost 4,681 (1.6%) of our residents.

Going forward, the 2023 forecast at the Anchorage Economic Development Corp. projects some slight population increase as the rate of births has been outpacing the rate of deaths. However, this increase may be offset by the trend towards negative net migration (more people leaving than moving in) that we’ve experienced here over the past six years. All this is to say that I’m just not seeing anything in the numbers that justifies our rushing into making any drastic or immediate changes to these regulations. That’s good, because it gives us time to have this conversation and think it through.

Anchorage, like New York and San Francisco, has geographic restrictions that impact our growth. The Inlet, the mountains and the military bases mean that the only way our city can expand is by increasing density. Historically, this typically has occurred in roughly concentric circles radiating from a city’s downtown business district. In many ways, our current zoning laws take this into account but there are pockets that could be improved upon.

Also, allowing owners to build “additional dwelling units” (ADUs) across the various zoning districts would be another way to help increase density. However, there needs to be fulsome discussion and consensus about how this is done because it has the potential to make huge downward impacts on property values. Houses typically represent a homeowner’s largest single investment asset and poorly regulated expansion of ADUs could risk a precipitous drop in home values.

Anchorage is beautiful. Recreational opportunities abound. We have lots of water and relatively temperate temperatures. While we are experiencing some softness in our market right now, our future is undeniably bright.

We owe it to one another to plan a future that provides renters and homeowners with quality housing in neighborhoods that are aesthetically pleasing. If we do this right, we can do both. So let’s sit down and start talking about where it makes sense to increase density to accommodate our future neighbors. We just don’t need to rush a final product that could cause our home values to tumble.

Bob Martin has been a licensed real estate agent in Anchorage since 1983. He is owner and broker of Ravenwood Real Estate.

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