Gridlock

Drive through Mountain View this summer and you’ll see plenty of new housing.

There are duplexes, single-family homes and a five-plex on North Bunn Street; several dozen units under construction within a single square mile. Yet according to Housing Anchorage – a recently formed coalition of local developers and nonprofits – that new construction isn’t nearly enough to keep up with the city’s demand for housing.

The coalition came together earlier this year to combat widespread housing gridlock.

In June, coalition members met with Anchorage Assembly members to talk about the various challenges facing the local market. Housing often proves unaffordable for renters, buyers and developers alike. About 20 percent of Anchorage renters spend half of their income on housing, the coalition found. And while a healthy market required construction of more than 900 new units in 2013, according to Housing Anchorage, only 329 were built.

But around the same time local leaders were discussing ways to spur Anchorage housing development, one of Alaska’s largest homebuilders was putting the brakes on a 22-lot subdivision in South Anchorage.

“Developing within the MOA (Municipality of Anchorage) is getting harder every day and will continue to be more and more challenging as time goes on if this town doesn’t make some changes,” said Andre Spinelli of Spinell Homes.

According to Spinelli, breaking Anchorage’s housing gridlock requires dealing with an environmental gridlock first.

Developable land is becoming increasingly rare in the Anchorage Bowl, and many remaining properties contain either wetlands or subsurface contamination left behind by previous owners. Dealing with both scenarios takes time and money, and Spinelli said his company currently has two properties mired in problems associated with wetlands development.

At the end of the day – between the consulting fees, holding fees, interest costs and other expensive delays – Spinelli said the wetlands issues could add more than $100,000 to the cost of constructing a new subdivision.

“It’s just throwing money at bureaucracy,” he said. “It kind of grosses me out.”

Spinelli said initial plans to develop Class C wetlands near Lake Otis Parkway and 72nd Avenue were approved by the municipality last year, only to face rejection by the Traffic Division a day before a public hearing on the matter.

Then, he said, the Environmental Protection Agency weighed in from Washington with concerns about the property’s groundwater and surface flow. After that, he said, there was a prolonged back-and-forth with municipal planners about an acceptable development solution. According to Anchorage’s Long Range Planning Section, maintaining the region’s many wetlands is imperative to flood prevention and ecosystem preservation. Municipal planners say balancing development and wetlands conservation is a delicate task.

So, throughout the entire process, Spinelli said his company worked with a professional land surveyor, a civil engineer and a wetlands scientist in an attempt to move the project forward. Instead, he said he was faced with “a constant state of unorganized limbo,” with municipal departments unable to agree on a course of action for his South Anchorage property.

“So instead of paying the consultants to do one plan I am now paying them to do multiple half plans until we find one that the MOA will approve,” Spinelli said. “Then finishing that plan, which will result in professional consultant fees for the project twice what they should cost.”

The costs and confusion finally reached a tipping point. In June, Spinell Homes asked Anchorage’s Platting Board to indefinitely delay the Spruce Creek subdivision.

“There are a lot of things working against me and it’s just completely frustrating,” Spinelli said.

Spruce Creek isn’t the only housing project facing delays.

Across town, a new 70-unit development on Mountain View Drive was originally scheduled to break ground this past spring.

Ridgeline Terrace – facilitated through a partnership between the Anchorage Housing Finance Corporation, Cook Inlet Housing Authority and two private companies – will be located on a parcel of land adjacent to the Glenn Square Shopping Center and the new Special Olympics Sports, Health and Wellness Center. The groundbreaking is now set to take place sometime in August, and AHFC Public Relations Manager Soren Johansson said the development is on track for completion by fall 2015.

But six months after AHFC first announced plans for the large-scale housing project, parts of the property remain active in the Department of Environmental Conservation’s contaminated sites database.

In January, just days before AHFC issued a press release heralding its new housing project, the DEC reported finding trichloroethylene at the Mountain View Drive property “in surface and subsurface soil at concentrations exceeding the most stringent Method 2 Migration to Groundwater cleanup levels.”

In May, the department approved a Final Potential Contaminated Soil Management Work Plan for the land. In early July, DEC records show, staff visited the site to observe the installation of groundwater monitoring wells.

Meanwhile, Johansson said there’s still no solid date for groundbreaking at Ridgeline Terrace.

And while ground remains unbroken at those developments in Mountain View and South Anchorage, the need for housing continues to run strong.

“The demand is far greater than present output in Anchorage,” Johansson said.

It’s just one angle of the city’s ongoing housing gridlock. Housing Anchorage numbers show no more than 350 new units have been built annually over the past six years. If you ask Spinelli, that’s where the land issues comes into play. The builder said delays caused by bureaucratic and environmental hurdles only sidetrack development and add thousands of dollars to the cost of a starter home.

“When you knock a house up $14,000, that’s a huge deal to the person buying that house,” he said. “You’ve basically disqualified thousands of buyers in Anchorage.”

Until the municipality finds a way to streamline regulatory roadblocks, Spinelli said Anchorage’s housing gridlock will be hard to budge.

“It’s depressing,” he said.

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