By André Spinelli
Updated: 14 hours ago Published: 14 hours ago
The topic of the housing shortage has become a popular headline in Anchorage, Alaska, and the United States, as it is one of the biggest problems we face as a community, state, and nation. As a long-time member of Alaska’s homebuilding industry, I have worked to address issues within the housing sector throughout my career. What drives the cost and availability of housing comes down to a complex set of criteria that includes local, state and national regulations, interest rates, price and availability of materials and land, and much more. Housing market inventory also plays a role, and there simply isn’t enough housing to go around.
I hope change is on the horizon as our elected officials recognize they must be part of the solution. Recently, the Alaska Legislature appropriated $7 million for a rebate program for newly constructed housing. The program will head to the governor’s office for his signature. We would like to thank our elected officials for their leadership in working to help find creative solutions to the housing issue. This new program will benefit everyone.
Alaska needs more housing and the only way to add housing to the market is to build new homes. Incentivizing home buyers to build is the most effective way to increase inventory. While this program is capped at $7 million, it could potentially generate more than $200 million in new energy-efficient housing statewide. For example, if the median price of a new construction home is $600,000 by offering a $20,000 rebate as part of this program, Alaska homebuyers are taking advantage of the state’s investment by a ratio of 30 to 1.
When home buyers decide to build, they are not only adding homes to the market, they are also removing themselves from the pool of buyers bidding on existing homes. Alaska’s limited supply drives up home prices and creates competition. That is why this program is limited to new construction. If a down payment refund program were used for all homes, it would only create additional bidding wars on the limited number of homes available. Furthermore, it would not encourage the incorporation of new homes into the market. Limiting the program to newly constructed housing will exponentially expand the amount of dollars invested in Alaska’s housing stock.
Giving homeowners the keys to their new homes is the best part of our job. Homeowners invest in their communities. They participate in community service, volunteer in our schools, and contribute to our economy. Building homes is about building a better community for everyone.
Andre Spinelli is president of Spinell Homes and president of the Anchorage Home Builders Association.
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