What's New in Alaska:
Population decline and a shrinking workforce have driven Alaska’s state government to push forward on several economic initiatives. To stimulate the local economy and drive population growth, the government is taking steps to lower barriers to entry in affordable housing development and incentivize investment.
Here are the most recent proposals, and their implications for Alaska real estate:
Anchorage Considers Sales Tax for Lower Property Taxes & Public Projects
The Anchorage Economic Development Corp. (AEDC) is proposing a new 3% city sales tax to improve Anchorage’s economy. The plan is modeled after a successful initiative in Oklahoma City, which allocated two-thirds of collected taxes toward affordable housing opportunities, and allocated the rest for investment in public projects.
This plan is expected to attract and retain workers, addressing a talent shortage in Anchorage. Overall the AEDC is hoping it will support the revitalization of Anchorage’s economy in a similar manner, making housing more affordable and supporting more public projects in the future.
Complications to Alaska’s Transportation Plan
The state's $5.6 billion transportation plan was recently rejected by the feds, potentially delaying construction projects and any benefits initially hoped for by the community. Without a fix by April, new federal funding could be on hold. The Department of Transportation is working on revisions and has indicated it remains confident that initial funding will come soon.
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Alaska Digest