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The Juneau Planning Commission approved use permits for the city's first cottage housing development last night, despite continuing objections from residents of the adjacent Back Loop Road neighborhood that the cottages will bring down their own property values - or are simply too many houses to have next door.

"We had a house built there recently," said All Seasons resident Craig Brown in public testimony. "We would have never bought our lot and had our house built knowing that this subdivision was going in."

Bicknell Inc. wishes to build 22 cottages on a three-lot, 3.54-acre site near Montana Creek in the Mendenhall Valley. Bicknell's permit rests on several conditions, including a requirement that the developer build a berm or leave a buffer between the cottage clusters and All Seasons, with input from the residents about which they'd prefer.

Some residents worried their property values would go down as a result of the development.

City Appraiser Robin Potter told the commission that the development would have some negative impact. But if developers abided by certain conditions, the effect would not be substantial, she wrote.

All Seasons developer Mary Kay Pusich still has four unsold lots, she said. She asked the city to conduct an independent appraisal.

Residents raised a question of whether the project should be considered as one housing development or three. Each cottage cluster is limited to 14 houses in the ordinance. But this 22-house project spans three lots.

"To say it's three when it's really one is simply to put form over substance," said Robert Spitzfaden, a lawyer for Pusich.

Assistant City Attorney Jane Sebens released a memo saying that putting one cluster of cottages on a lot didn't preclude another being built on the next lot. Except for Commissioner Linda Snow, the commission supported this interpretation.

Commissioner Michael Satre, echoing the planning department's staff report, said it wouldn't be fair to other property owners to deny a cluster's permit based on the presence of another cluster in the adjacent lot.

Commissioner Frank Rue, who also voted in favor of the permits, said the three clusters would help Juneau with a housing shortage. He didn't think the clusters would be bad-looking at all, he said.

"I think the developer's shown a lot of willingness to minimize impacts," he said.

But Snow agreed with All Seasons residents who had said the development was incongruous with their existing neighborhood.

"I think the density is a little too much for that area. I think it's a little too impactful on the harmony of that area," she said.

She supported a single cluster but opposed the other two.

• Contact reporter Kate Golden at 523-2276 or e-mail kate.golden@juneauempire.com.