A city-planned subdivision that aims to create dozens of buildable lots is set to go before the Juneau Planning Commission. City planners say the proposed Pederson Hill subdivision could help create relatively affordable housing for Juneau. Though some remain skeptical of the project.
About a half mile past the Brotherhood Bridge on Glacier Highway lies the entrance to what could be an 86-lot subdivision planned by the city.
“What our hope is is to make a compact neighborhood kind of in a traditional style similar to the areas of downtown Juneau or downtown Douglas,” said Greg Chaney, lands and resources manager for the City and Borough of Juneau.
This 26 acres of city-owned land has been identified as prime residential real estate for more than a decade. Mossy second growth forest lines a plateau between Auke Bay and the Mendenhall River.
Chaney sees potential here for scores of moderately priced homes. He said if the land were just sold outright there would be no guarantee that small lots would be carved out or developed at all. So what does the city have planned? Relatively small houses on dense lots: up to 10 houses per acre each not much more than 1,000 square feet. No garages and small backyards with the aim to make it affordable.
“Our magic number is $250,000 because the mortgage payment on a $250,000 home is about the same as a rental in Juneau right now,” Chaney said.
How the subdivision would be developed remains undecided. It would be up to the Juneau Assembly to determine whether shovel-ready lots would be sold off individually or in bulk to builders.
“The city is not building houses — we are only making land available. All construction will be done by the private sector,” Chaney said to allay the concerns of private developers. As one of the largest local landowners, the city and borough has to tread carefully when it offloads property onto the private sector. “Just because we build a project doesn’t mean we have to just dump them. We’ll hold onto the lots and disperse them as the land market dictates. So we’re not going to depress market.”
Still, some developers aren’t convinced and eye the project with suspicion. That’s because there is unease with the city being so closely involved with the economics of a housing project.
Earlier this month at a meeting of the Juneau Affordable Housing Commission, land developers that sit on the commission predicted pushback when it’s reviewed by the Assembly.
“There’s a bunch of players out there who pay a lot of property taxes and they got some influence on the Assembly,” said Wayne Coogan, a prominent developer. He made the remarks at a meeting Feb. 7 of the Juneau Affordable Housing Commission, which he vice chairs.
“I’m worried that if we don’t think about the political dimension of this project — that’ll come to the Assembly, they will meet head on the political dimension of it and then we will not have done our job,” Coogan said at the meeting.
He did not respond to requests for comment to clarify.
“The comment that I hear a lot is, ‘Oh you’ll be flooding the market,'” said Juneau’s Chief Housing Officer Scott Ciambor. (Ciambor is married to a Coast Alaska employee.)
He said the private sector hasn’t built moderately priced homes fast enough to meet market demand.
“And I think historically we’ve always struggled with this type of housing product. We’ll continue to have difficulties developing single-family homes, and so anything we can do to get these units on the market is important,” he said.
But those in real estate are not so sure. Much of the criticism seems based on principle.
“A free market is not something that you control. You put it out there and it becomes what it becomes based on what the market demand is,” said Juneau real estate broker Marty McKeown. He has specialized in residential real estate for more than a decade.
“It’s a great idea that the city gets involved and helps out with the infrastructure and putting that in place,” McKeown said. “But to get involved with competing with the local developers in developing a neighborhood is not the right way to go.”
He echoes developers who have called for the city to sell off larger parcels to private developers.
“Developing the lots and just asking builders and selling off lots one at a time to each contractor is not the way to do that,” he said. “They should sell off a parcel and let the developers develop the lots.”
The city would also be looking for partners. The Tlingit-Haida Regional Housing Authority has already been approached though nothing has been signed.
“The housing authority is very interested in a possible partnership with the city on the Pederson Hill subdivision,” interim CEO Joyce Niven said. “We’re supportive of the efforts of the city to meet the housing needs in Juneau, and in particular, to create affordable home ownership opportunities for moderate income, working families in Juneau.”
The Planning Commission will be asked to approve the plan on Tuesday. If it does, the Pederson Hill project gets its first hearing before the Juneau Assembly at a March 13 committee meeting.
Balancing free market principles against the currently high barrier to home ownership experienced by middle class families is something the Assembly will have to grapple with.
Correction: A disclosure statement in an earlier version of this story misstated for whom Scott Ciambor’s spouse works. Ciambor’s spouse works for Coast Alaska, not KTOO.
