Housing

What the legislature does in response to the state government’s $4 billion deficit could have big effects on Alaska’s economy, according to a leading economist.

Gunnar Knapp, director of the University of Alaska Institute of Social and Economic Research, told the Senate Finance Committee on Wednesday that uncertainty over the budget is a concern for the economy.

Knapp said closing the budget gap in one year could be too much, too fast. But it’s important for the state to have a plan, he said.

“If you can, in fact, reduce the uncertainty, then it makes more sense to implement … things over time,” Knapp said. “But there’s all the difference in the world between that and saying, ‘OK, we fixed 30 percent of the problem and we’ll, we’ll get back to you on what comes next.’”

Knapp said the state isn’t in recession yet, but appears to be heading into one. Job losses in the oil and gas industry, construction and state government have been offset by gains in health care and hospitality.

“I would say that regardless of what you do, I think it’s very unlikely that the recession we will be facing would be as severe or damaging as the 1980s recession,” he said.

Knapp said that’s because the economy is bigger, more diverse and less over-extended with borrowing and construction than it was in the 1980s.

Knapp urged lawmakers to focus on major issues, like making changes to Permanent Fund earnings and new revenue:

“My own instincts are that you can’t get there without new revenues,” Knapp said.

Gov. Bill Walker has proposed a personal income tax. Legislative leaders have so far resisted the proposal.

Fairbanks Republican Sen. Pete Kelly said he doesn’t want to raise taxes until the legislature has done more to cut the size of government.

“If we’re getting into the discussion of the things that begin to affect the flat-rate mechanic in my district, about whether he or she should pay taxes and start giving up the fruits of their labor,” Kelly said, “that has to be done later, after we have made sure everything else about government is on the table. Then we’ll start talking about the things that are on their table.”

Kelly questioned whether Knapp’s emphasis on having a state fiscal plan to reduce uncertainty was influenced by Gov. Bill Walker. In response, Knapp said he realizes lawmakers face difficult decisions, but he’s trying to stay out of the politics on either side of the issue.

Every morning for weeks, Meagen Limes made the same phone call: to a court in Washington, D.C., to see if that day was the day she’d be evicted from her home.

Limes faced eviction because she couldn’t pay rent on her three-bedroom apartment in Southeast Washington, where many of the city’s poorest residents live.

It can sometimes take weeks before the marshals actually show up at your door, and Limes fully expected to be homeless any day.

“And it’s like really scary,” the 28-year-old said. “I try so hard not to cry. Like, I would be like, ‘Oh my God, if they come today, what am I gonna do?’ ”

I first met Limes outside the courtroom of the Landlord and Tenant Branch of the Superior Court of the District of Columbia, where tenants go when they’ve been sued by their landlords for not paying rent.

That day, a judge ordered a writ of restitution — directions for the marshals to begin eviction proceedings.

Limes wore a black apron and purple shirt with the logo of a local grocery store where she works part time. When the judge asked why she owed more than $3,300, Limes said she was struggling to make ends meet.

“And basically he was like, ‘So the only reason why you’re behind on rent is because you can’t pay rent?’ And I was like, ‘Yeah, that’s the only thing,’ and he was just looking at me like, he said, ‘We’ll send out a writ,’ ” Limes recalls. “And I was just like, ‘Wow, like, is there any way I can get some help?’ ”

Limes is among the hundreds of thousands of Americans who face eviction because they simply can’t afford their rent. One in four low-income families pays more than 70 percent of its income on rent, leaving little money for other bills and almost no room for an unexpected expense.

According to the Harvard Research Center’s State of the Nation’s Housing report in 2015, rising rents and stagnating wages nationwide have contributed to a record number of cost-burdened renters — a situation that is worsened by the shortage of affordable housing for low-income tenants.

Living On A Tight Margin

Limes lives with her 4-year-old son and 8-year-old daughter. Her ailing father had been living with her, too, until he died recently.

“I also have my niece. She’s 18 and she’s been going from house to house,” Limes says. “So I told her just come stay with me until she get on her feet.”

Their apartment feels like someplace people are just passing through, with empty walls and plastic bins stuffed with clothes on the floor.

Limes is pretty typical of those who end up in rent court: She’s a single mother, juggling things on her own. She says the father of one of her children is in prison and the other is a deadbeat dad. She lost a full-time job last October; her new job is only 20 hours a week. At $10.50 an hour, that’s not nearly enough to cover her $1,275 monthly rent.

“They’re living on a very tight margin,” says Judge Judith Bartnoff, who presides over the D.C. court that includes the Landlord and Tenant Branch. “And if something happens, if somebody gets sick, if somebody gets hurt, if somebody loses their job, then it throws the whole system off.”

She thinks many of the thousands of tenants who come before the court each year can afford their rent at some point — but just barely.

Eviction Means Losing More Than Just A Home

The hallway outside the landlord tenant courtroom is routinely packed with renters who are trying to work out deals with their landlords’ attorneys. Some offer payment plans so a tenant can catch up, but many renters just agree to move out. Or, like Limes, they resign themselves to eviction, which can make things worse.

“It really drives people deeper into a state of hardship,” says Matthew Desmond, a Harvard sociologist who spent more than a year following low-income renters and landlords in Milwaukee that he details in his new book, Evicted.

Desmond says evictions are not just a result of poverty but a cause. It makes lives more unstable. People don’t just lose their homes in evictions, he says.

“But you often lose your neighborhood and your school. Children often have to switch schools and miss long stretches,” he says.

Families often end up in areas with more crime and poorer-quality housing, Desmond adds.

Limes says she is worried about that. She wants to move, but even studio apartments are $800 a month, which she can’t afford.

“It’s like I’m stuck here. I don’t know where else to go. I don’t want to go to the shelter. I’m trying to get help. But I can’t find help anywhere,” she says.

She did get some temporary aid from the city a few years ago, but permanent housing assistance is almost impossible to find. Limes applied eight years ago for housing vouchers to help cover her rent.

“And nothing. I’m still what, 1,000 something,” she says.

That’s No. 1,000 on the waiting list. In fact, the city recently shut down the list because more than 70,000 families were on it. Only one in four people in the U.S. who qualify for public housing or vouchers actually gets them.

No Homeless Shelter … For Now

Five weeks after my first visit with Limes, furniture was piled on the curb outside her apartment complex. There were mattresses, CDs, a flat-screen TV. Two other families had been evicted that day. But Limes was still waiting, worried that she and her kids would end up back in the city’s homeless shelter where they were in 2012.

“It was hard, and it’s like it was disgusting. And I don’t want to put my kids in that situation again,” she says.

A week later, Limes got a reprieve — but only a temporary one: She received her earned income tax credit check from the IRS and was able to pay off what she owed.

She still has to worry about next month’s rent.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

The pioneer homes are a purely Alaskan invention. The assisted-living and nursing-care facilities are state-funded and provide long-term boarding for residents over 65.

And judging by the growing waitlist, the service provided by Alaska’s six pioneer homes – three of which are in Southeast – is needed more than ever. As part of CoastAlaska’s series, Aging Southeast, we visit the oldest home in the system.

Betty Decicco is in love with a mountain meadow that she’s never been to. The 86-year-old first came to the Sitka Pioneer Home as a volunteer in 2001, calling bingo.

“When I would look out the window as I was calling, I would see Verstovia and there’s this meadow,” Decicco said. “I call it my meadow.”

The meadow is a flat place that turns green in the summertime. Going there isn’t possible for Decicco, but that doesn’t mean she hasn’t tried.

“Jokingly I said to one of the [members of the Coast Guard], ‘Don, can you do a reverse rescue? Can you put me up there?’ He said, ‘No.’ And of course walking up there is out of the question,” she said. “So I stare at the window now.”

If Decicco sounds uncommonly grateful, it’s because she almost lost that view entirely.

In 2014, she moved into an assisted-living facility in Seattle to be near her son and granddaughter. It was privately operated and in her words, “luxurious,” but the schedule of activities bored her. She told the coordinators.

“They looked at me like, ‘What are you talking about? Look at this and this and this on the schedule.’ I said, ‘I don’t want to be entertained, I want to do something,’ and she couldn’t comprehend it,” Decicco explained.

Decicco moved back to Sitka and has been living at the pioneer home for the past three months. She works in the gift shop, goes to Bible Study, and takes ceramics classes. She’s got her meadow back and she wants her ashes scattered there one day. Reflecting on her happiness at the home, Decicco said, “I think as older people we need a purpose in life.”

Vickie Wilson, director of the state Division of Alaska Pioneer Homes, said that giving residents ample reason to get up in the morning is what the pioneer homes are all about. “There are three plagues within assisted living and it’s the loneliness, helplessness and boredom,” she said.

To counter this, all six homes follow the Eden Alternative®, which is a care model that tries to build community among residents. Wilson said that this type of care flips the script of what getting older means.

“You don’t line people up in the hall anymore to take them all to dinner. It is a home. It’s not home-like. The pioneer homes are homes.”

In addition to a packed schedule filled with volunteer opportunities and classes, residents are allowed to keep their pets and plants. The Fairbanks home is filled with art. In the Palmer Veterans & Pioneer Home, there’s a wheelchair-accessible garden. In the Sitka home, residents don’t just listen to someone play the piano. They sing along.

But there’s a serious challenge. The governor’s budget proposes a 2 percent cut to the Pioneer Homes. Last year’s cut saw the loss of 19 personnel. Fewer staff means a home can’t operate as many beds, and fewer beds means longer wait times for the hundreds of Alaskans hoping for immediate placement.

Phil Welsh is the administrator of the Sitka Pioneer Home. “Sitka has the shortest waitlist. We’ve have 40-50 folks on ours. Some stretch into the hundreds,” he said. And as Alaska’s senior citizen population grows, particularly in Southeast, the lists are only getting longer.

It works like this: anyone who is 65 or older and has lived in Alaska for one year can apply to be on the inactive waitlist, which has over 4,000 names. And once you’re ready to be move into a home, you are transferred to active lists (for whichever homes you prefer) and wait for that phone call saying, ‘We have a spot for you.’

Fifteen years ago, getting a call from one of the Southeast homes – in Juneau, Ketchikan or Sitka – took four and a half months at most. Last year, the longest wait time was four and a half years. And average wait time is about a year and two months.

Welsh said it’s not only the wait period that’s changing.

“I think our average age in the homes is around 84, 85. The population that comes in is older than it was in the past.”

The population is also frailer. Sixty percent of residents have been diagnosed with Alzheimer’s disease or another form of dementia. And compared to the pioneer homes in Anchorage or Fairbanks, the Southeast homes have a smaller proportion of residents able to manage their own medications, feeding and bathing.

Basically, the pioneer homes have had to adapt, catering to a more fragile clientele as Alaskans enter the homes later in life. And the breaking point usually comes when the caregiver – sons, daughters, spouses- just can’t do any more on their own.

Fredi Young has lived in Alaska for 31 years. Of her life story, she said, “There’s too much to tell, but I was born in Texas, in West Texas, on a ranch.” Fredi’s husband, George Young, was a pastor. Fredi was a teacher.

In 2004, George’s Parkinson’s disease reached a severe stage. Doctors in Hoonah urged him to consider entering a pioneer home. “He was tall and had big bones and he was heavy, you know?” Fredi recalled. At the time, she couldn’t lift him up any more. “I think when he realized that,” Fredi said, “he was willing to come.”

Fredi and George took an open spot in Sitka and moved into a shared apartment. For Fredi, the weight of managing his medical needs was lifted off her shoulders. “Everyone else did the work and that lifted such a load. I could just sit and talk with him and visit him and be his companion rather than his caretaker,” she said.

George died in 2013, but she didn’t consider leaving.

“We had not ever had a home. We were gypsies, moving from place to place. I stayed because I’d loved it here. It was my home, you know?”

Looking around, she adds, “And it’s the nicest home I’ve ever had.”

Gov. Bill Walker is seeking to streamline state agencies responsible for financing economic development, housing and renewable energy.

He signed an administrative order Thursday requiring the Alaska Housing Finance Corporation, Alaska Energy Authority and Alaska Industrial Development and Export Authority to find opportunities to become more efficient or consolidate.

The agencies have more than $3 billion in assets and employ 440 people.

Walker said the state hasn’t pre-determined what the outcome will be.

“This is a process that will be inclusive, not exclusive,” Walker said. “It’s not going to be a process where we come up with an edict on the third floor and say, ‘This is the way it’s going to be.’ We invite them – no one knows their agencies better than them. So they have been doing this a bit internally themselves. So we just have expanded that a bit.”

The housing finance corporation finances low-cost mortgages and provides public and special needs housing. The energy authority administers the Renewable Energy Grant Fund and provides assistance to rural communities. The development and export authority finances business development.

Commissioner of Administration Sheldon Fisher will lead the effort. Walker said he expects the recommendations will require new state laws next legislative session.

The Municipality of Anchorage is conducting a comprehensive study on the impact of the potential troop drawdown at Joint Base Elmendorf-Richardson, and hosted a sparsely attended community meeting on the topic in east Anchorage on Tuesday evening. The Department of Defense will decide soon if it will remove more than 2,600 active duty army soldiers from the base.

If the soldiers and their 3,000 family members do leave, the municipality wants to be ready. They are gathering community comments through focus groups, surveys and community meetings. They hired Northern Economics to create an economic model that would show the potential impacts on businesses, schools, social services and housing markets.

“It will be a lot of microanalysis,” explained Susanne Fleek-Green, the mayor’s chief of staff. It involves “going to businesses, going to neighborhoods, going to community councils to better understand how the economy is affected by our strong forces here at JBER and what we can do to help make those business more resilient if there is a force drawdown.”

Fleek-Green said the data will be useful even if the potential drawdown doesn’t happen. The city will better understand where service members and their families are living, shopping and volunteering, and where military spouses are working. Community members at Tuesday’s public meeting also suggested looking at how the drawdown could impact civilian contractors who work on base.

Don Crandall, who lives in Mountain View, said the local businesses in his neighborhood will be negatively impacted because it’s so close to JBER. But he said there could be an upside.

“We do have a severe housing shortage in Anchorage and in Mountain View. Rents are very high. Vacancy rates are very low. So this might reduce some of the pressure on that,” he said.

He also suggested military hospital beds could be repurposed as detox facilities.

Another of the 20 community members in attendance said he fears that troop reductions will lead to fewer services for veterans, like medical facilities.

The $180,000 study is funded by the Department of Defense’s Office of Economic Adjustment. The city plans to finish and present it in May.

There will be another community meeting Wednesday night at Gruening Middle School in Eagle River.

In Roseau, Minnesota, there are good-paying jobs at the Polaris snowmobile factory. But a dearth of moderately priced housing means there are few places for the company’s managers and engineers to live.

Without more affordable housing, Polaris will have trouble growing in this northern Minnesota city of 2,600. The company won’t disappear, said Todd Peterson, a community development coordinator in Roseau, but it cannot add new jobs without more housing, and is likely to expand elsewhere.

“We’re competing as a community to say we’re a viable place for Polaris to do business, but we can’t provide housing for the people they need to work,” he said. “That’s a hard sell.”

As affordable housing vanishes for low- and middle-income Americans, lawmakers in Minnesota and other states are being forced to look for ways to encourage new construction and ease a housing crunch that increasingly eats up more of people’s income.

Last week, Virginia Democratic Gov. Terry McAuliffe allocated $6.9 million in grants and loans to nonprofit developers to build affordable apartments. Earlier in month, Maryland Republican Gov. Larry Hogan committed nearly $700 million to address blight in Baltimore, and said some of the money would go toward rental assistance.

Legislation in California would impose a fee on real estate transactions that could generate between $300 million and $500 million annually to support the state’s affordable housing, redevelopment and homeownership programs. And in Minnesota, lawmakers are being urged to authorize state income tax credits that could be used by developers in places like Roseau.

The country’s lowest earners are increasingly at risk because the private sector cannot meet their need for housing without government aid, said Chris Herbert, director for Harvard’s Joint Center for Housing Studies.

On top of that, he said, a housing shortage for people with moderate salaries threatens to drive the middle class from cities and dampen local economies.

“Where can any private developer build, own and operate and charge only $500 in rent and be able to make a go of it?” Herbert said. “We have to think of ways that public subsidies can close the gaps.”

Cause of the Crisis

Stagnant federal funding for low-income housing programs; the lingering effects of the Great Recession, when millions lost their homes to foreclosure; and growing income disparity have left many states and cities with an influx of people in search of affordable homes.

Rents rose by as much as 7 percent between 2001 and 2014, according to the Harvard Center’s study on rental housing. In that time, wages also fell by as much as 9 percent, squeezing Americans’ budgets.

This has affected the three-quarters of low-income people who qualify for — but do not receive — most types of federal housing assistance, as well as middle-class Americans.

Herbert’s team found that more than 80 percent of renters who earn $15,000 or less spend over 30 percent of their income on housing and are considered “cost burdened.” More than two-thirds of renters in that income range spend more than half.

“What are they not spending money on? They’re not spending their money on food,” he said. “They’re not spending their money on health care.”

Housing costs are growing quickly for middle-class households, too. From 2003 to 2013, the share of renters earning between $30,000 and $45,000 who were considered cost-burdened increased from 38 to 45 percent. Among those earning between $45,000 and $75,000, it increased 6 points, to 20 percent, according to the Harvard Center.

New Ways to Pay

Sixteen states give tax credits to developers who build affordable housing; most have some sort of housing trust fund for low-income housing supported by real estate taxes.

But housing advocates say states and cities need to do more to ease the housing crunch, such as finding new ways to finance construction or demanding that developers price some of their new apartment units below market value.

Some have been responding in novel ways. In Portland, Oregon, where the mayor declared a housing state of emergency in the fall, the city has gone to a source of the housing scarcity to help finance new housing: the sharing economy.

Kurt Creager, director of the city’s housing bureau, estimates between 800 and 1,000 units of affordable housing have been taken out of the Portland rental market because owners are using homes and apartments for short-term, hotel-style rentals through websites like Airbnb.

So the city established a transient lodging tax that charges 11.5 percent per Airbnb reservation and funnels that money into a housing trust fund that can be used for land acquisition and other capital costs. The tax has raised $1.2 million for housing projects since 2014, he said.

In October, the city also increased the share of certain property taxes that goes to affordable housing programs. The move is expected to generate $68 million.

Some cities and states, such as New Jersey and Massachusetts, require developers to price some new units below market rates through inclusionary zoning policies.

But others, such as Oregon and Texas, prohibit the practice, although lawmakers in Oregon plan to introduce legislation this year to reverse that state’s law.

In Tennessee, state lawmakers similarly want to block officials in Nashville and other cities from passing inclusionary zoning measures. One of them, Republican Rep. Glen Casada, said that if there is a need for affordable housing, it will naturally be met as a result of market forces.

“I have found that any time the government mandates anything, it drives up the price and makes that resource more scarce,” he said.

Instead, he said, local governments should lower taxes, fees and requirements on homebuilders to ensure affordable housing stays on the market, he said.

But officials in Montgomery County, Maryland, say inclusionary zoning programs work. The county has the country’s oldest inclusionary zoning law, which was established in 1974 and requires that 12.5 percent of new housing developments be affordable.

The county, home to about a million people just outside Washington, D.C., has established 12,500 affordable housing units since the program was created. Most of the units are no longer covered by the zoning law, but about 5,000 are still required to be priced affordably, said Stephanie Killian, who manages the program.

“It prevents concentrations of poverty,” she said. “It allows access to housing for people who work here and live here.”

Some cities, such as Seattle, have sought rent controls that prevent landlords from raising rents in exorbitant fashion. But those efforts ran up against opposition at the state level and have gone nowhere.

City council members in Alameda, California, recently extended a moratorium on rent increases but haven’t moved on a proposed rent control ordinance.

Rural Housing

Housing hardship is commonly found in big cities with high costs of living. But rural Minnesota has experienced a crisis in towns like Roseau, with big manufacturers in place and little investment in housing.

The towns have grown with businesses, hospitals and schools, but the rental housing markets have not responded with homes for people making enough money to afford middle-priced units, said Chip Halbach, director of the Minnesota Housing Project, an advocacy group.

Developers are unwilling to commit to these towns, Halbach said. “They’re saying this is just too risky, even though the company can show these people wanting to move in.”

Housing advocates worry these small towns will suffer economically because companies will eventually want to relocate to bigger markets where workers can secure housing, he said.

Last year, the Minnesota Legislature created a workforce housing grant program to pay for housing for workers in rural areas. To make sure the homes serve moderate-income earners, the lawmakers stipulated that the money could not be put toward projects required to have low-cost units.

There’s also a push for the Legislature to create a state tax credit to support building more housing for workers in towns like Roseau.

The proposal, spearheaded by the nonprofit Greater Minnesota Partnership, would authorize state income tax credits that could be used by developers who build housing in those towns. The idea, Halbach said, is that companies will buy into housing projects to guarantee homes for their employees and get the tax credits.

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States, Cities Tackle Housing Crisis for Low, Moderate Income Families