Rents are rising rapidly in Anchorage, and experts say the trend will continue

For renters like Ann Dougherty it has been difficult to find a cheap place to stay.

“A bed, a bath, $ 1525. Let’s see if it has the space,” Dougherty said as she rolled through Craigslist looking for an apartment in Anchorage. “It does not have the square footage, but many times, I feel like it. , many times they are like 600 square feet. “

(Editor’s note: This story was originally published June 13, 2022 on Alaska Public Media.)

She is a massage therapist currently living in the Eagle River, but she wants to move closer to her job in Anchorage to cut down on car time and counter rising gas prices. Right now, including utilities, Dougherty and her roommate are paying about $ 1,200 to rent an entire Eagle River house.

“But it’s like a 2,000 square foot home, versus a small box,” Dougherty said.

She says she’s looking for a modern one-bedroom apartment that will not cost her more than $ 1400. But she’s having a hard time finding anything in that price range.

Kassandra Taggart says Dougherty is not alone. Taggart follows rental trends in the area. She is a real estate agent at Real Property Management Last Frontier. She says rental prices fell in 2019 and remained unchanged in 2020.

“So in ’21 and ’22 it started to rise,” Taggart said. “And in the last six months, it’s increased between 20, 30, 40 percent depending on what kind of rent it is.”

Taggart says it follows fairly closely the national trend in rising rents. She attributes the rise in prices in Anchorage to the lack of vacant leases and lists several reasons.

The first is that the COVID-19 pandemic caused many people to stay in their homes instead of moving to a new location.

“So they kept real estate that they would normally move,” Taggart said. “Whether they want to add more units, reduce, move out of state, make transitions – allowing other people to move into Anchorage or shop to upgrade or downgrade.”

Taggart says it affected more than a third of the available leases. She says another thing that drives the lack of rent is a higher number of people wanting to buy real estate rather than rent, which in turn removes more leases from the market.

“In addition to everyone wanting to own property for the first time, just as millennials are now buying property to own for the first time, now is the time we have the boomer generation.” said Taggart. “For example, they buy two, three houses and keep it because they have to jump around for their retirement.”

During the pandemic, construction of new homes slowed significantly, adding another layer to the problem. Taggart says unemployment rates in Anchorage are now close to zero and that any solutions will take some time.

“Find a way to build more homes, or find a way to squeeze and condense more homes into space,” Taggart said. “Because it would be a big hit, but we’re talking three, four years before any of that can happen.”

Aside from that, Taggart says, “the only way it can be miraculously solved during the night is if half of Anchorage decides to relocate.”

Director of Anchorage Real Estate, Adam Trombley, says the city is doing two main things to increase vacancies: working to reduce construction fees and allowing more tax breaks for things like accessory housing or ADUs – commonly called mother-in-law apartments.

He says earlier this year that the assembly and the mayor approved changes to the city code that will help.

“What can we do to make it easier for the developers, for the builders, for the average person who just wants to go out and maybe remodel a bathroom or build an extra housing unit?” said Trombley.

The assembly has several executive orders before it, including one that will reduce development and permit fees and another that will provide a ten-year property tax break to build an additional housing unit. Assembly members have said they hope to amend the ADU executive order to ensure the units will be built for long-term housing, as opposed to short-term leases like Airbnbs.

Trombley says another goal is to take public lands and put them in private hands. He hopes it can promote new private housing construction in the future.

Meanwhile, Dougherty, the massage therapist, says that because she’s self-employed, she can afford to pay a little more in rent. However, she may temporarily raise the price she charges for massage.

“So I can kind of adjust to that with my income because I have a little bit more control over it,” Dougherty said. “But someone who earns $ 15 an hour, they do not have the ability to change that.”

It’s a little harder to adapt for hourly wage earners like Ryn Vinkowski, who works at Best Buy. She and her partner moved into a studio apartment about a year ago and advertised for $ 800 a month in the hopes that they would be able to save up for a house.

“They thought, ‘Well, everything except your electricity and your internet is included.’ Only when they say included does it mean you pay it on top of your rent to us, “Vinkowski said.” So the rent was actually around $ 900. And then we’ve both been out because of COVID. And then it was just… well, a year has passed and we have not saved anything ”

Vinkowski says her landlord initially said her rent would rise to about $ 1,200, but she was able to bring it down to about $ 870 – a 9% increase. Vinkowski says she recently got a pay raise of about a dollar an hour and moved full-time.

“But it’s also a little annoying,” said Vinkoswki, “because… hey, I just got a pay rise. We can’t celebrate that, because it’s now officially rented.”

Although she still will not be able to save much, Vinkowski hopes her new pay rise will at least allow her to stay afloat while rents continue to rise.

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