Andre Spinelli
Updated: 4 hours ago Published: 4 hours ago
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/3B36FKUSP5FHRI4RCKANQMAZ2U.jpg)
The housing shortage is a popular topic in Anchorage, Alaska, and across the United States, as it is one of the biggest issues facing us as a region, state, and nation. As a long-time member of the Alaska homebuilding industry, I have tried to address issues in the housing sector throughout my career. The cost and availability of housing is determined by a complex set of criteria, including local, state, and national regulations, interest rates, and the price and availability of materials and land. Housing market inventory also plays a large role, and there just isn't enough housing for everyone.
I am hopeful that change is coming soon as our elected officials recognize that they need to be part of the solution. Recently, the Alaska Legislature allocated $7 million for a new home rebate program, which will now be sent to the Governor's office for his signature. I want to thank our elected officials for their leadership in finding creative solutions to our housing challenges. 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 homebuyers to build more is the most effective way to increase inventory. The program is capped at $7 million, but could generate more than $200 million in new energy efficient housing across the state. For example, if the average price of a new home is $600,000, a $20,000 discount is offered as part of this program, allowing Alaska homebuyers to leverage the state's investment at a 30 to 1 ratio.
When homebuyers choose new construction, they not only add more homes to the market, but they also take themselves out of the pool of homebuyers bidding on existing homes. Alaska's limited inventory drives up home prices and creates competition – that's why this program is limited to new construction. Applying the Down Payment Refund Program to all homes would only create more bidding wars for the limited number of available homes. Additionally, it would create no incentive to add new homes to the market. By limiting the program to new construction, the amount of money invested in Alaska's housing inventory would exponentially increase.
Handing homeowners the keys to their new home is the best part of our job. Homeowners are contributing to their communities. They participate in community service activities, volunteer in schools, and contribute to the economy. Building homes is building better communities for everyone.
Andre Spinelli is president of Spinel Homes and chairman of the Anchorage Home Builders Association.
Opinions expressed here are those of the author and are not necessarily endorsed by the Anchorage Daily News, which welcomes a wide range of viewpoints. To submit an article for consideration, email commentary(at)adn.com. Submissions of under 200 words may be sent to letters@adn.com or click here to submit from any web browser. Read our complete guidelines for letters and commentary here.
