A new nonprofit housing trust has rolled out its first round of grants, to jump-start the construction of about 80 new homes across the state.
Housing Alaskans: A Public-Private Partnership, known as HAPPP, was formed to ease Alaska’s severe housing shortage. It launched with money from the state and the Rasmuson Foundation.
HAPPP is Alaska’s first housing trust, a kind of entity that’s common in the Lower 48. They work with federal, state and local governments, as well as other organizations, to leverage investment. HAPPP’s new board, including chairman Preston Simmons, believes it could be a game-changer in Alaska’s growing housing crisis for low and middle-income families.
“It was expensive to build up here before, but it’s really expensive now,” Simmons said.
In its first move, HAPPP spent $750,000 to fund housing projects across the state. But with $4 million in requests, Simmons says this is just a dent in a problem that will likely get worse without massive investment.
Based on U.S. Census and Department of Labor forecasts, Simmons says the state will need 27,500 housing units over the next 10 years and will require a mix of new construction and renovation to meet demand.
Simmons says Alaska’s chronic housing shortage has already had ripple effects.
“It’s causing real hardship for recruiting and workforce,” he said. “Also, a lot of families are leaving the state, just because of cost and affordability of homes.”
Simmons, who recently retired as head of Providence Alaska Medical Center, says he saw how the lack of housing in Kodiak caused hospital staffing to drop to critical levels.
Kodiak and other Alaska communities with a tourism economy, he says, have seen the rental market taken over by Airbnb’s and short-term rentals.
Mi’shell French, RurAL CAP’s director of rural housing, says that trend has hit Soldotna hard, because there’s no longer incentive for landlords to rent to low and middle-income families.
“They can make quite a lot of money in a very short period of time,” French said. “So, it’s taking all of those homes off of the long-term rental market, and it’s making it very difficult for families to be able to find long term rentals, or if they’re looking to become homeowners.”
HAPPP’s funding came just in time to help RurAL CAP finish a self-help housing project for nine families in Soldotna, which saw the pandemic drive up costs with delays and price hikes for building materials.
In this project, families supply about 65 percent of the labor to build their homes and get low interest loans to pay off the rest of the costs.
Faith Tuluk from Hooper Bay, a community on the Bering Sea Coast, knows firsthand how important RurAL CAP’s self-help program is. She got involved in an earlier RurAL CAP project after she had moved to the Kenai Peninsula to finish her schooling. When it came time for her family to return home, she decided against it.
“There’d be no way we could get our own place out there,” Tuluk said.
In fact, the only option would be for her husband and two children to move into her mother’s home, where her sister and her kids, along with a brother and younger sister live – a total of 10 people.
“Some might have smaller homes, with just about the same amount of people,” Tuluk said.
She says, in Hooper Bay, it’s typical for families to double-up, even triple-up in homes, often with about 10 people to a household.
Last fall, Typhoon Merbok compounded the housing shortage in Hooper Bay. Many homes were badly damaged in the storm that ravaged the Bering Sea coast. Some were completely destroyed.
“One home twisted all the way around and drifted away,” Tuluk said, “but then landed quite a bit away from its usual space.”
Last Thanksgiving, Tuluk and her family moved into their home in Soldotna, a home they had built together with help from the eight other families in their project.
“Putting in the hours was tough and going through some challenging things that happened,” Tuluk said. “But everybody that worked on this build became like a family. Everyone was helping each other.”
“I wish families in Hooper Bay could have something like this,” she said.
Perhaps someday that might happen, if HAPPP accomplishes all that it aspires to do. Simmons says HAPPP’s job as a housing trust goes beyond handing out money — that its main mission is to work with other non-profits, to find creative solutions to Alaska’s housing shortage.
“Alaskans have a lot of great ideas and work really hard. But there are so many different organizations, they often work in different silos,” he said. “If you can create a coordinating entity that kind of connects those dots, you can get a lot done.”
Top on Simmons’ list: Reducing the cost of housing in rural Alaska, which can run as high as $900 per square foot — about three times more than in urban areas.
French, at RurAL CAP, says that translates into big dollars.
“The same house you’re able to construct for about $200,000 in more urban areas of Alaska is probably two to three times more, just because of the cost of materials and getting it shipped there,” French said.
Simmons says HAPPP can help to bring down these costs by changing government policies, like current state law that requires homegrown timber to be sent out of state for grading, which then has to be shipped back to Alaska. A bill authorizing in-state lumber grading passed the Legislature this year.
Another problem for rural Alaska, he says, is the age of the homes. Most were built in the 1970s and 1980s, and will require not only the materials, but also code changes to be eligible for grants to help fund repairs.
French says changing the rules is hard to do for agencies like RurAL CAP, which have very limited resources.
“Sometimes it’s a very long process, and people will start and then give up,” she said.
French hopes HAPPP will succeed where others have failed.
“It’s just so, so important to help get those things changed, to get housing where it’s desperately needed.” French said. “I’m just thrilled that there’s an agency out there that’s working to advocate for those important changes.”
Simmons says there’s a wealth of good ideas for HAPPP to pursue.
“Everything from donation of land to lumber, to how do we create lower cost financing, to how do we incentivize developers?” he said.
Simmons says Alaska’s minimum wage of $10.85 an hour puts the housing crisis into sharp focus. Based on numbers from the National Low Income Housing Coalition, the wage needed to rent a one-bedroom apartment, takes a full-time job that pays $18.66 an hour.
Simmons calls HAPPP’s first round of grants strategic. It prioritized housing projects, which needed extra funding to get across the finish line. Six communities received HAPPP grants:
- The Nome Community Center’s HomePlate Apartments, a housing first project
- The Sitka Homeless Coalition’s Hítx’i Sáani (Lingít for “Little Houses) project
- AWARE’s Cordova Street Apartments in Juneau for domestic violence survivors
- Aspen House for seniors in Wasilla
- RurAL CAP’s Tatum Self-Help Project in Soldotna
- New housing construction in Nikolai
Simmons says housing is an investment worth making — because from homelessness to health care, to the struggles of the working poor — it is the key to solving many of the state’s problems, which affect the overall economy and touch almost everyone who calls Alaska home.