Low vacancy rates create a seller's market for apartments in Anchorage


ANCHORAGE, Alaska -- Life just keeps getting tougher for Anchorage apartment hunters.

The apartment vacancy rate in Anchorage this summer is 1.1 percent, the lowest level since the town filled up in 1976 during the trans-Alaska pipeline construction, according to a new survey. The vacancy rate that year was 0.4 percent.

"I just don't see any good news for renters," said Ken Kincaid, who compiled the semiannual survey of Anchorage's larger apartment complexes for Shorett & Riely, a real estate appraisal and consulting company.

With fewer apartments available, rents continue to rise, though not as fast as they did last year, he said.

And, he noted, rents are a long way from their historic peak. A typical higher-cost two-bedroom apartment goes for $675 a month. That's about $100 less than 1984.

"When we had this kind of market before, there was much more price gouging on the part of the landlords," Mr. Kincaid said.

But, he said, rents are going to have to climb back to mid-1980s levels before developers can afford to build apartment houses. Until then, the number of rental units won't change, and the tenants will keep getting squeezed if the population continues to grow, he said.

One non-profit housing group tried to ease the rental crunch, but its plans fell apart for this year.

Anchorage Neighborhood Housing Services was set to build 200 low- and moderate-income apartments until bad soil on the building site in Spenard canceled that project, said Heather Arnette, the group's spokeswoman.

The organization owns 578 low- and moderate-income apartments, and its vacancy rate is below 2 percent, Ms. Arnette said.

Tight housing means landlords cannot only raise rents but be choosy in selecting tenants, said James Kuntz, general manager of Marston Properties, a management company. Many landlords are checking their prospective renters' incomes.

Just try to rent a place if you have a big dog or trio of cats, Mr. Kincaid said.

"Allowing a pet was very common in 1989," when Alaska's economy was on the skids, apartments were empty and landlords were hungry for renters, he said.

No longer.

"Most landlords are in the driver's seat, saying 'no pets' " or demanding pet deposits, Mr. Kuntz said.

His company manages more than 1,000 rental units including apartments, single-family houses, condominiums and duplexes. Marston's properties have a vacancy rate between 3 and 4 percent, Mr. Kuntz said.

But the toughest rental to find is a single-family house, and some of Marston's houses have waiting lists, he said.

More expensive apartments are also getting scarcer, Mr. Kincaid's survey shows. At the end of last year, higher-priced units -- such as two-bedroom apartments costing more than $625 a month -- were among the easiest to find. But by this summer, the vacancy rate for more expensive apartments plunged to 0.5 percent, according to the survey.

Despite the tight rental market, rents aren't soaring quickly because landlords are finding that their renters can't afford to pay much more, Mr. Kincaid said.

Some landlords have tried raising rents, but so many tenants moved out or threatened to that it wasn't worth the cost and effort of re-renting the apartments, Mr. Kincaid said.

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