The Juneau Assembly is considering updating a grant program that helps Juneau residents build accessory dwelling units — new housing units like mother-in-law apartments, built on lots that already have a house. If approved, the size of the grants would more than double.
The city defines accessory apartments as being no more than 1,000 square feet or half the size of the main house on the lot — whichever is smaller. They can be standalone structures or part of an existing house.
The previous program, which expired at the end of June, offered $6,000 grants. Applicants had to wait three years after building a new apartment to use it as a short-term rental. Since July 2016, the city has issued 41 of those grants.
Joseph Meyers, the city’s housing and land use specialist, told Assembly members in April that $6,000 was no longer a strong enough incentive for Juneau residents to build accessory apartments. At the start of the program, it could cover nearly a quarter of the construction cost. In 2022, it covered about 10%.
“While funding has been distributed and ADUs built, the $6,000 grant in many cases has not been a deciding factor in development of an ADU; rather a small bonus after the development decision has been made,” he wrote in a memo.
The updated program, if approved, would offer $13,500 grants. Like the original program, recipients couldn’t rent the unit as a short-term rental for three years. Applicants would have to be Juneau residents, and the new units would have to be occupied within two years.
Assembly members are still considering adding a second tier with much larger grants, though they’ll continue discussing that in committee. Tier 2 recipients would get $50,000, and short-term rentals wouldn’t be allowed for 10 years.
Apartments built with Tier 2 grants would also have to be affordable for people who make 60% of the area median income. Right now, that would mean rent would be capped at $1,284 for an efficiency unit, $1,375 for a one-bedroom and $1,650 for a two-bedroom.
But at a committee meeting on Monday night, City Manager Rorie Watt said it would be time-consuming for city staff to monitor things like the rent property owners charged and their tenants’ income.
And he said staff worried that property owners would just rent affordable units to friends and family rather than making them available to the broader community.
“We couldn’t figure out a way to ensure that that kind of program wouldn’t be misused,” he said. “If somebody added a unit with an affordability component, that they might not make that available to the public or there might be some kind of an inside deal.”
The Assembly Committee of the Whole will continue to discuss a potential second tier. The updated $13,500 grant program next goes to the full Assembly for a final vote.
