Developers Ask City to Lower Cost of Building Housing

Wednesday, December 03 2014


A vacant lot in Unalaska's Valley neighborhood. (Annie Ngo/KUCB)

Unalaska’s developers were out in force at a special city council meeting on housing Tuesday night, asking for all the help they could get to build new properties.

The request from landowners and builders like Brian Whittern was clear: "Anything that the city can do to make development easier, and lower the cost and offer incentives," he said.

He and 50 others in the audience said the best ways to do that were to extend new utility lines for cheaper, and cut taxes to encourage development.

But it’s not clear what kind of need that development has to meet. The city’s last study said residents wanted about 250 more rentals, and 100 more private homes -- and that was with a much lower population than today’s.

Even so, planning director Erin Reinders said there’s potential for the market to grow. A recent drive-by survey found 117 vacant lots that are already subdivided. About half were relatively flat.

"If you were just to kind of do the math based on how large those lots are and how they’re zoned, in an ideal circumstance, you could actually end up with an additional 151 [housing] units," Reinders said.

Coe Whittern is one of the biggest landowners on the island. He has plenty of subdivisions waiting to be developed, but said the city’s never asked him for a list or offered help. He thought better communication was a place to start.

"Maybe you guys would find it worthwhile to talk to us about what are the sticking points for us, and is there a way for you guys to encourage us to meet the need of the community to some degree?" Whittern said. 

One of his suggestions was to make sure new lots aren't taxed until they have a private owner. City manager Chris Hladick said he’d look into a state program that does that.

Several people also brought up the tax that landlords pay on appliances and other items in their rental units. They said it was a nuisance, and that getting rid of it would be a good faith gesture.

Councilor Roger Rowland wanted to know how much that would cost the city. He said he was all for doing what developers asked, but he wanted to be careful:

"From a city perspective, any tax abatement has to be either made up somewhere else, or a service has to be cut," Rowland said. "That’s just the reality of finance."

The same goes for utility extensions. Clint Huling runs the city’s water division, and he said they couldn’t afford to give away mainline extensions. And councilor Yudelka Leclere was worried about how it all would impact prices:

"The keyword is affordable housing," Leclere said. "If the city starts giving breaks and different things, the people in the community still want to hear that, at the end of the day, are they going to be able to afford that? What are we holding that developer to?"

Some city employees, like human resources director Kelly Stiles, said they struggled with rent hikes in their privately owned apartments every year.

"So I have to be faced with potentially leaving a place I now consider home, a good, stable job that I enjoy immensely, to possibly look for career options and housing options in maybe not a place I want to be," Stiles said.

That’s why she and her coworkers asked for help with housing last night. About half the meeting focused on whether the city should be a landlord for its staff. But developers like Alyssa McDonald argued that discourages competition, since the city doesn’t pay property taxes like everyone else.

"I really am abhorrently against having the city be in the business of rentals. You guys can’t do it efficiently, you can’t build it efficiently," McDonald said. "I mean, it’s the best in town, for sure, but it’s at the taxpayers’ expense."

Instead, she and others told the city to solicit housing from the private sector -- by leasing units as they come up, or putting out a request for proposals for a dedicated complex.

But most people felt employee housing was just a symptom of the larger issues -- uncertainty about housing, and obstacles to creating it. And Reinders, the planning director, said it's all made more urgent by the looming prospect of a population boom if the oil and gas industries put down roots in Unalaska.

Some people, like Monica Henning, were skeptical about that:

"I think people aren’t gonna build, though, unless they see a supply and demand," Henning said. "I mean, oil could come, oil could not come. ... So we can’t build housing before the oil comes, right?"

Without solid numbers on how serious the shortage is -- or will be -- she felt it was up to the city to make development appealing in a place where it’ll always be pricey to build.  

Click here to view Tuesday's presentation on the history of housing issue in Unalaska, solutions so far and possible next steps for city employees and the community at large. Council will continue weighing options at their next regular meeting on Dec. 9. 



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