Rent is increasing rapidly in Anchorage, and experts say the trend will continue
“One bed, one bath, $1525. Let’s see if it’s got the square footage,” Dougherty said as she scrolled through Craigslist, looking for an apartment in Anchorage. “It does not have the square footage, but a lot of times, I feel like, a lot of times they’re like 600 square feet.”
(Editor's note: This story was originally published June 13, 2022, on Alaska Public Media.)
She’s a massage therapist who currently lives in Eagle River, but she wants to move closer to her work in Anchorage to cut down on car time and counter rising gas prices. Right now, including utilities, Dougherty and her roommate pay about $1,200 to rent an entire house in Eagle River.
“But that’s like a 2,000 square-ft home, versus a little box,” Dougherty said.
She says she’s looking for a modern 1-bedroom apartment that won’t cost her more than $1400. But she’s having a tough time finding anything in that price range.
Kassandra Taggart says Dougherty is not alone. Taggart tracks rental trends in the area. She’s a real estate broker with Real Property Management Last Frontier. She says rental prices declined in 2019 and stayed flat in 2020.
“Then in ‘21 and ‘22, it started going up,” Taggart said. “And in the last six months, it has been going up between 20, 30, 40 percent depending on what kind of rental it is.”
Taggart says that tracks pretty closely to the national trend in rising rents. She attributes the Anchorage price hike to a shortage of available rentals, and lists several reasons.
The first is that the COVID-19 pandemic caused a lot of people to stay in their homes instead of moving to a new place.
“So they held up real estate that normally they would be moving,” Taggart said. “Whether they’d be adding more units, downsizing, moving out of the state, making transitions — which gives opportunities to other people to move into Anchorage or shop to upgrade or downgrade.”
Taggart says that impacted more than a third of available rentals. She says another thing driving the rental shortage is a higher number of people looking to buy property rather than rent, which in turn takes more rentals off the market.
“In addition to everybody wanting to own property for the first time, like the millennials are now buying properties to own for the first time, now what we’re having is the boomer generation.” Taggart said. “For example, they’re buying two, three houses, holding it because they’re going to be hopping around for their retirement.”
During the pandemic, construction of new housing slowed significantly, adding another layer to the problem. Taggart says vacancy rates in Anchorage are now close to zero and any solutions will take a while.
“Find a way to build more housing, or find a way to squeeze and condense more housing in spaces,” Taggart said. “Because that would be a big hit, but we’re talking three, four years before any of that can happen.”
Other than that, Taggart says “the only way it’ll miraculously fix overnight is if half of Anchorage decides to move.”
Anchorage Real Estate Director Adam Trombley says the city is doing two main things to boost available housing: working to reduce building fees, and allowing more tax breaks for things like accessory dwelling units, or ADUs — commonly called mother-in-law apartments.
He says earlier this year, the assembly and mayor approved changes to city code that will help.
“What can we do to make it easier for the developers, for the builders, for the average person who just wants to go out and maybe remodel a bathroom or build an accessory dwelling unit?” Trombley said.
The Assembly has several ordinances in front of them, including one that would reduce development and permitting fees and another that would give a ten-year property tax break for building an accessory dwelling unit. Assembly members have said they’re hoping to modify the ADU ordinance to ensure the units would be built for long-term housing, as opposed to short-term rentals like Airbnbs.
Trombley says another goal is taking public lands and putting them into private hands. He hopes that can foster new private housing developments in the future.
In the meantime, Dougherty, the massage therapist, says that because she’s self-employed, she can afford to pay a little more in rent. She might have to temporarily raise the price she charges for massages though.
“So I can kind of adjust for that with my income because I have a bit more control over it,” Dougherty said. “But someone that’s making $15 an hour, they don’t have the ability to change that.”
It’s a little tougher to adjust for hourly workers like Ryn Vinkowski, who works at Best Buy. She and her partner moved into a studio apartment about a year ago advertised for $800 a month, hoping they’d be able to save up for a house.
“They were like, ‘Well, everything but your electricity and your internet is included.’ Only when they say included, it means you’re paying that on top of your rent to us,” Vinkowski said. “So rent became actually about $900. And then we’ve both been out due to COVID. And then it was just…well, it’s been a year, and we’ve saved nothing”
Vinkowski says her landlord initially said her rent was going to jump to roughly $1200, but she was able to get it down to about $870 — a 9% increase. Vinkowski says she recently got a raise of about a dollar an hour, and moved to full-time.
“But it also kind of sucks,” Vinkoswki said, “because… hey, I just got a raise. We can’t celebrate because that’s now officially going to rent.”
While she still won’t be able to save much, Vinkowski’s hopeful that her new raise will at least allow her to stay afloat as rents continue to rise.