Land trade helps city tackle housing

Just off of Glacier Highway, across from Sherwood Lane, sits the city-owned Pederson Hill Subdivision. It’s hard to recognize unless you know what you’re looking for because there are no houses, no streets and no signs of development. This is because until recently there was no way to access the 600-acre subdivision. The City and Borough of Juneau’s first successful land swap in at least a decade changed that.

Christ Evangelical Lutheran Church, which sits at the base of the subdivision, recently traded slightly less than an acre of land with the city. And with that nine-tenths of an acre, the church may have helped house hundreds, according to the city’s Lands and Resources Manager Greg Chaney.

“Until now, we didn’t have a realistic access route, so this is a huge improvement for our ability to access and develop it,” he said.

By the time Pederson Hill is fully developed, the subdivision will comprise as many as 200 single-family homes. It will also have a multifamily area with 100 units if everything goes according to plan. This land swap provided the city with the opportunity to take a much-needed bite out of its housing problem, but it will be up to the CBJ Assembly to give the city the teeth it needs to make this happen, Chaney said.

With “adequate funding,” he said the city can complete the subdivision in less than a decade, and the first phase could be finished in the next two years.

“If we were to have that level of support from the Assembly, we could do one phase every two years,” he said. “That would put us at eight to 10 years.”

What’s in a phase, however, is not necessarily easy to determine at this point. A single phase is “a very elastic thing” that could contain as few as 40 units or as many as 100 depending on funding, Chaney said.

“There’s an efficiency in doing a bigger development all at one time,” he said.

As planned, the city will run roads and infrastructure into the subdivision. It will sell lots that will then be built by developers from the private sector. The problem, as Chaney sees it, is that the development community is reluctant to buy property right now because the housing market isn’t as strong as it was a few years ago. If they aren’t able to make a “comfortable return on their investment,” they won’t invest.

Though this is a very real concern, it is one that the city doesn’t have to worry about with Pederson Hill subdivision, Chaney said. He is confident that the city will make its money back because the city doesn’t have to deal with the same economic pressures, such as loans and interest payments, that cut into developers’ profits. The city will also continue to make money after it sells each lot in the form of property taxes.

Chaney estimates that the infrastructure build-out for the first phase of the project will cost the city about $4.5 million. (He made sure to point out that is a rough estimate.) As the saying goes, however, the city will have to spend money to make money — and more importantly to put people in houses.

“It’s not a small number, but it’s not insurmountable for a city project,” he said. “It’s something we could do if the community feels strongly about it.”

And if all of the housing hubbub of late is any indicator, community members likely will feel strongly about Pederson Hill, which Chaney said is meant to benefit them. The city’s intent for the subdivision is to provide lower cost housing for a market that is not currently being served, he said.

“That’s really our target with the Pederson Hill Subdivision: workforce housing — a homeownership lifestyle for entry-level professionals, and that’s one market that the private sector is not developing for,” Chaney said. “This is a place where new teachers, policemen and the people plowing the streets can buy a home because if we don’t have those people, we don’t have a community.”

A representative with Christ Evangelical Lutheran Church was not able to grant an interview request by deadline.

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