Developers and city officials will square off Monday over the future of housing development in Juneau’s capital city.
Both sides need to keep in mind that what is best for the city requires both parties to work together.
Juneau’s need for more housing has outpaced the number of homes being built annually. Each time a new report is published about Juneau’s housing needs, the number goes up.
Common sense says that the city’s previous approach to housing development isn’t working. And history has shown us that developers haven’t been the answer to this problem.
The core dispute between both sides is the city undertaking the development of Pederson Hill, a 400-acre chunk of city-owned land between Auke Lake and Brotherhood Bridge. The city has big plans in store: the development of 86 lots, each estimated to be about 5,000 square feet each.
The city plans on clearing out the trees, placing the infrastructure, and once the lots are ready to build on, selling them to developers for about $80,000 each. In return, the City and Borough of Juneau will require homes be built in the price range of $300,000. The current average home cost ranges from $340,000 to $380,000.
Developers say the city is hording land it should sell to them, and in doing so is threatening private enterprise. The city believes developers are working too slowly to address Juneau’s housing crisis, therefore it must intervene.
Both are right.
The best solution rests somewhere in between. Developers are correct in saying that when the city sells land for $100,000 per lot, it’s near impossible to build anything “affordable” for the average resident. The city is correct in that letting developers hold land and develop it at their own pace slows much-needed development.
Developers don’t have the capital needed to tackle large-scale developments such as Pederson Hill. The city does. The CBJ is prepared to invest $8 million for the first phase of that project. Some developers build and sell a few homes at a time to keep money coming in. That’s a sluggish approach to what’s become a dire situation for many. We’d wager that each of you knows at least one person who left town because they either couldn’t find, or afford, a quality home. That must change.
Adding 86 homes to the market in a fairly short amount of time isn’t going to break the market, even with anticipated job losses as the state battles a $4 billion budget deficit. But the cost of Pederson Hill homes at $300,000 is still a bit too high. The city should strive for a price point of $250,000, which would be more enticing to young families and single-income workers.
Putting 86 new homes on the market in a matter of years would also provide an economic boost to the city. Not only would construction crews be at work, but when people move into new homes they tend to buy new furniture, landscape their yards, and all the other necessities that come with homeownership. And let’s not forget the property tax boost that will fill CBJ coffers.
But the city has to be willing to give up some ground, so to speak. What it asks for land is too pricey. The city should sell lots to developers for much cheaper to hit a lower price point, making it easy for developers to make their money back. The city also could easen the tax burden on developers while homes are being built. The CBJ should also review and streamline the process for homebuilding, particularly barriers that dissuade it.
In exchange for selling developed land cheaply, the city could require homes be built to meet a specific need, set a price point to attain and a deadline for completion. This is a win-win-win situation for developers, the city and residents.
On Monday, the Assembly will consider adopting Juneau’s Lands Management Plan, a guiding document that recommends the disposal and development of Pederson Hill. This plan needs to begin sooner than later.
The perfect solution requires both sides to give a little. If that can happen, there’s a chance affordable, available housing will become more than a talking point at meetings and rallying cry during elections. It will become a reality.
