Rental prices in Anchorage have skyrocketed over the past year, rising 14.2% in line with a national trend, according to a report released this month by the Department of Labor and Manpower. Alaska artwork.
Several other Alaskan communities also saw their rents rise, but at a slower rate than the state’s largest city.
The median price of a rental in Anchorage, typically a 2-bedroom apartment, rose $167 a month from a year earlier in March, data showed, based on an annual survey.
This pushed the typical Anchorage rental price, which includes the cost of utilities, to $1,339 per month.
Anchorage’s increase pushed up the state’s overall median rent. That jumped $100, to $1,279 per month, an increase of 8.5%.
The previous year, rental rates increased much less: 2.8% in Anchorage and 2% in Alaska.
Alaska state economists and an official from the Alaska Housing Finance Corp. say the jump this year is likely due to several factors, including rising costs for homeowners. Limited housing of all kinds in many Alaskan communities and growing demand for rentals are also part of the picture, they said.
[Some Alaska workers are facing a crisis in housing. Employers hope that if they build it, employees will come.]
Rob Kreiger, an economist with the Alaska Department of Labor and Workforce Development, said he wasn’t sure yet if the increases were a record.
“I think historically it’s a pretty big jump, but we’re still looking at what drives it,” he said.
With high inflation, landlords are likely spending more on supplies and labor to maintain apartments and single-family homes for rent, he said.
A homeowner’s property taxes in Anchorage may also have increased, following the rise in home assessments in recent years. It could also increase costs, he said.
Rising rental rates could make it harder for families struggling to make ends meet.
“The tighter your budget, the more you will be affected,” said Sara Teel, also an economist with the Alaska Department of Labor.
Rising property costs could also be a factor, preventing some families from exiting the rental market, she said.
“You have more people competing for a set number of rentals, at least that’s part of it,” Teel said. “But I’m sure there’s more going on.”
[Alaska house prices jumped last year to a record $389,000]
Rent increases in other Alaskan communities have increased moderately compared to Anchorage.
For example, rent in Sitka was the highest in the state at $1,349, up $26 from a year ago. It was $1,305 in Fairbanks, up $59; it was $1,260 in Juneau, up $3; and it was $1,092 in Mat-Su borough, up $41.
Daniel Delfino, director of planning and program development at Alaska Housing Finance Corporation, said another factor could be an increase in vacation rentals in Anchorage and some other Alaskan communities, reducing the park housing for long-term rentals.
Kreiger said he doesn’t know if median rental costs have continued to rise since March. But he said single-family home costs have jumped with higher interest rates, which would likely keep more families in the rental category.
Demand for workers has been strong and many employers are raising wages, so it’s possible some of the higher rental costs will be offset by better wages, he said.
But it also requires further consideration, he said.
Kreiger said the department plans to release a more comprehensive report in September.