In Valdez, the city hopes it’s found a solution to the affordable housing crisis

For Hermon Hutchens Elementary School Principal Jason Weber, a lack of housing is a big part of his struggle attracting new teachers to Valdez.

“If I’m trying to hire teachers outside of, outside of the community, I’m normally going to end up hiring two teachers, because one of them is going to back out a contract because they can’t find housing,” Weber said in an interview.

It’s a problem you hear a lot about in this community of about 4,000 year-round residents. And it’s rippled across the local economy, said Valdez’s assistant city manager for capital projects and facilities, Nate Duval.

“You see that in all the businesses, whether it’s retail or the schools,” he said. “I know there’ve been a number of folks who have been offered employment, but they couldn’t find a place to live, and so they had to turn down the employment to go work somewhere else.”

Communities across the state and around the country are struggling with a shortage of affordable housing. The Prince William Sound community of Valdez is no exception. Expanding housing has been at the top of the city’s priority list for years.

Valdez is dealing with many of the same economic factors limiting development in other places, like high construction costs and interest rates. But city officials are pursuing an all-of-the-above solution — and they’re hoping it pays dividends.

Anemic development and deteriorating housing stock

Valdez had its first major boom in housing development in the aftermath of the 1964 Good Friday earthquake, which required the town to relocate, Duval said. Since then, it’s grown in fits and starts. The opening of the Trans-Alaska Pipeline and the Exxon Valdez oil spill each created their own mini-boom. 

“After that, nothing, no major construction or adding to the inventory happened,” Duval said.

While the population has been roughly flat, a report commissioned by the city shows that the number of units fell 1.6%, between 2010 and 2018. Some homes have succumbed to fires or collapsed under snow loads, and others moved to short-term rental platforms like Airbnb or VRBO, Duval said.

At the same time, lots of Valdez’s existing housing stock has deteriorated.

Around a quarter of Valdez’s housing is mobile or manufactured homes, more than any Alaska community except Craig. But many haven’t stood the test of time, said the city’s community development director, Kate Huber.

“The majority of them are from 1980 or earlier, so they’ve greatly outlived their lifespans in our community,” Huber said. “We live in a pretty harsh environment that these manufactured home units are not designed for.”

Valdez is the one of the snowiest cities in the U.S. It averages about more than 300 inches of snow each year. And when you visit a mobile home park, you can see the toll the environment takes on homes that aren’t designed for this climate. 

Despite diligent shoveling every winter, in Jeremy Casillas’ home, the ceiling sags.

“You don’t know if it’s going to ever cave in or not,” he said. 

Casillas purchased the trailer for about $12,000, as is, and banks won’t lend out the money needed for most repairs, he said.

A multi-pronged effort to expand supply

But there’s reason to believe that the tide may be turning. The city has taken a wide range of steps aimed at making it easier for people to build new homes and upgrade existing stock. 

One big part of that was a rewrite of the city’s zoning codes. 

“Essentially what we did was just make sure that more types of housing were allowed in more places,” said Huber, the community development director.

The city expanded single-family zones to allow manufactured homes and duplexes without special permits and expanded mixed-use zoning for housing in commercial areas.

The city is also requiring owners to get permits for short-term rental properties, though Huber said it’s yet to cap or limit them. At this point, Huber said, the city is relying more on incentives. 

For example, there’s a $10,000 rebate program for anyone who adds a housing unit — on the condition that it can’t be used as a short-term rental for five years.

“We have seen just a couple instances where somebody created a new apartment, came to discuss with us the short term rental process, and then opted to participate in the incentive program,” she said. “Those units are now long term rentals.”

The city’s also taking an active role in expanding supply. The city donated land to a developer to build a 28-unit senior housing facility. A grant program helping developers pay for infrastructure helped pave the way for a 50-unit subdivision, Duval said.

“A number of them have been sold, and they’re building some triplexes and duplexes on those properties right now,” he said. “Without the city’s investment in that, I don’t know that those projects … would get off the ground to even be developed.”

Valdez has also applied for a U.S. Department of Housing and Urban Development grant to bring 140 new manufactured homes to Valdez with low- or no-interest loans. Some would replace existing homes for low- and moderate-income families, and others would go in as new stock.

“Those would be units that are designed for our conditions, for our snow loads, seismic conditions and wind to make sure that we weren’t just repeating the issue and perpetuating the problem, but to provide a high quality, sustainable source of housing,” Huber said.

It’s too soon to say whether the city’s efforts will be enough to turn the tide, Huber said, but Valdez is pulling out all the stops, and she’s optimistic that the city’s multi-pronged approach to solving this intractable problem can help other communities do the same.

“I think for those outside of Valdez, we’re a really great test case to be watching, because these issues, we see them in communities all over the state of Alaska and all over the country,” Huber said.