Council mulls incentives to encourage housing developments

Nome Common Council took on two issues in Monday’s work session preceding their regular meeting. They discussed incentives for housing development and changes to elections. Ultimately, both topics were acknowledged as needing another work session, as 80 minutes were spent talking about the first topic and only four minutes were left to cover the second.

Councilmember Scot Henderson presented a set of incentives that he designed, having consulted with City Manager Glenn Steckman and others. Henderson said that he tried to make a list of incentives that the City of Nome can control, such as waiving permitting fees or property tax. The incentives are specifically for stimulating the development of rental units, and are also applicable for renovations of older buildings, not just for new construction. The program also isn’t aimed uniquely at corporate developers, but those in the community with the means to build additional rental units. In an example he provided, someone building a 5plex appraised at $1,400,000 and a 12-mil property tax rate could have incentives around $360,000 over 15 years. He maintained — though discussion would ensue on the assumption— that his program requires zero City funds up front and would strengthen and support local businesses.

The council, and a larger-than-expected public audience, were broadly in support of any initiative that increased housing stock in Nome, and appreciative of Henderson for drafting such a plan. Comments were primarily about the right time span of property tax exemption and number of units that such programs such apply to.

Councilmember Megan Sigvanna Topkok stressed that affordable housing is the other component in the equation. Nothing in the program as presented by Henderson ensured that any newly developed housing was affordable. This was a good point, Henderson said, and that he had been focusing on creating as much housing stock as possible, attempting to drive down rent through increasing supply.

Ken Morton, Assistant Manager at NJUS, spoke about the proposal from the utilities’ perspectives, as some of the incentives were in the form of electric credits and waiving hookup fees. Unlike a developer whose primary incentive to develop is profit, Morton explained that the goal of NJUS is to provide utilities to Nome, and that their revenue pays for their operations. In the past, the bulk of the construction they did was funded by grants, without which extending water and sewer becomes unattainably expensive. Morton guessed that expanding service to places which aren’t connected, another frequently mentioned hinderance to development, costs $1,000 per foot.

Three members of Nome Planning Commission were in the audience Monday night, and mentioned several non-monetary barriers to development, such as parking, energy efficiency standards and building codes. The Nome Zoning Code requires a parking space per residential unit, which limits buildable area on a lot, and some say it makes it harder to recover costs.

Henderson said he had general conversations with developers and relayed that their number one issue was the inability to recover costs. Councilmember Mark Johnson said he heard from someone who renovates and rents houses, saying it was good to see the city is open for business. On the business side, Steckman said that updating building codes would be an important component of this plan, as lenders aren’t financing new construction based on the 2009 codes that Nome is using.

In the remaining several minutes allotted for the work session, Councilmember Jerald Brown asked what changes could be made to increase participation in local government bodies, such as the Common Council or the school board. Councilmember Topkok said that she wanted to see an election system that promotes diversity.

With time running out as the regular council meeting was set to begin at 7 p.m., Mayor John Handeland said that this topic needed more time to be discussed more thoughtfully.