Co-owners of Sitka Construction Solutions, Derek James and Kris Karsunky, stand in front of the four 450-square foot houses that they’re constructing for the Yakutat Tlingit Tribe. The company does standard construction projects like heat pump installs and single family homes, but lately, they’ve been focusing more on the “mini home” concept. “We could do these for the rest of our career if we wanted to,” James said. “We saw what we were expecting with the demand, and now we just have to get a process out there.” (Photo by Erin McKinstry/KCAW)

In many rural Alaska communities, the high cost of construction can lead to housing shortages, unsafe living conditions and overcrowding. A new “mini-home” project is working to tackle the problem in Yakutat by building the houses in Sitka where costs are lower and then shipping them. The construction company behind the project hopes its idea spreads.

In a large gravel lot, a handful of workers ferry buckets of drywall mud between four tightly-spaced homes. They’re building these 450-square foot structures assembly line style. 

“Like right now we’re in sheet rocking mode, so we got all the sheet rocking tools and…get this one sheet rocked and go onto the next one,” says Derek James, co-owner of Sitka Construction Solutions, the company behind the project. “So when you are able to get in the groove of doing one thing, you’re a little faster, a little cleaner, saving time and money on kind of every phase of it.”

James calls these “mini homes.” They’re bigger than a tiny house and smaller than a conventional one, but built to the same standards. There’s a bedroom, small bathroom and basic kitchen. 

They also call them modular homes because they’re built in one location and later placed somewhere else on a permanent foundation. All four are destined for the remote, Southeast Alaska town of Yakutat, a place that James says is desperately in need of housing, especially since a new clinic in town has attracted more professionals looking for places to live.

“Every house in Yakutat is full whether it’s habitable or not. I mean, unless the walls and the roof are falling down, there’s probably somebody in it,” he says.

James and his business partner Kris Karsunky understand the problem intimately. They grew up together in Yakutat and later moved to Sitka, where they started their company. Karsunksy says new construction in Yakutat is rare, partly because it’s so expensive.

“The price per square foot to build in a rural community is pretty outrageous. You can figure about a third more than Sitka itself,” he says.

That’s because it’s not just building materials that have to be shipped in. It’s labor. Many rural communities lack licensed trades like electricians and plumbers, and paying them to get there comes at a cost.

So Karsunky and James thought why not build in Sitka, where their equipment and their labor pool is, and then ship them to Yakutat on a barge or ferry?

“We might as well get 95 percent of the work done here and pay the local rate,” Karsunky says. “And they can go home to their families every night and save money for the customer.”

They started small by building one for Karsunky’s mom, Joy Klushkan, who wanted to downsize from a larger house. She says she’d looked into modular homes built in factories down south, but the price of shipping doubled the cost, and the construction wasn’t built to withstand Yakutat’s climate. 

“A lot of them won’t just ship it to Alaska. They have to come in and install it. So you have all the added cost and the barging is really expensive. And then getting construction up there is very, very, very, very expensive,” Klushkan says. “It’s almost cost prohibitive.”

She thought the “mini house” seemed like a good alternative. And she’s not alone. It turned heads from the day it arrived in Yakutat.

“We didn’t even get it parked on the lot and start to set it up on a foundation, and people were stopping by and asking questions,” Karsunky says.

The concept attracted the attention of the Yakutat Tlingit Tribe, which ordered four “mini homes” to serve as temporary shelter for crime victims. And these latest four are a joint project between the Tribe and the Tlingit and Haida Regional Housing Authority to provide homes for elders near the Yakutat Senior Center. 

The Tribe’s Executive Director, Cynthia Petersen, sees these first four homes as a start to a larger project. She says they’ll allow elders on a fixed income to live independently without having to pay for larger homes that they no longer need. Those houses can then go to families struggling in Yakutat’s tight housing market. 

“This could also allow some of our elders who reside outside of the Yakutat to to be able to come home and have a place to live as well,” she says.

It’s one of 10 Tlingit and Haida Regional Housing Authority projects awarded funding from the CARES Act to address housing needs during the pandemic. Executive Director Jackie Pata says other Tribes are building duplexes or expanding existing homes. All of the projects are aimed at addressing overcrowding, which became a serious concern during the pandemic. The virus can spread more quickly in tight living quarters.

A 2019 survey found that Tribal households in Yakutat are the most likely to say they are overcrowded in the region. 

“We know in Southeast Alaska in most of our communities, many families are overcrowded, multi-generational families living in one home. And so any housing that we can produce in Southeast Alaska’s going to reduce overcrowding,” Pata says.

Yakutat’s $900,000 grant was specifically for energy efficient homes. Karsunky says given the high utility costs and the harsh climate in Yakutat, they’ve made the “mini homes” as efficient as possible, from little things like  neoprene gaskets around outlet boxes to big things like heat pumps and building for a heavy snow load.

“Being from Yakutat, we want to deliver a good product. We don’t want something we’re going to put our relatives or family members in that they’re going to say, ‘this isn’t that comfortable,'” he says. “We should be able to achieve a five-star energy rating.”

Co-owner of Sitka Construction Solutions, Derek James, points out the future bathroom in an unfinished “mini home.” (KCAW/Erin McKinstry)

James and Karsunky don’t believe that the “mini home” concept is limited to Yakutat. They’ve had interest from people in Sitka and surrounding communities who see it as a way to add good-quality, affordable housing. Including appliances and shipping, each one costs around $125,000. They’re able to keep prices low by buying and shipping supplies in bulk from Seattle.

“We can put an order in for the lumber package for multiple at one time and get shipping containers up here with windows, doors, insulation, all of it, into one big shipping container,” Karsunky says.

And barging the houses to Yakutat adds around 25 percent so the cost to sell them in Sitka could be even more affordable. 

Still they face hurdles to building them on a larger scale. Land availability and zoning and building regulations pose challenges. For example, they’re still not sure how Sitka’s building and zoning codes would classify the construction. Financing is also a hurdle: transporting the homes adds risk, meaning many banks don’t want to issue a construction loan until they’re placed on a foundation. 

For now, Sitka Construction Solutions has to stick with people and organizations that can pay up front, like the Tribe. But they’re hopeful that the idea could take off if the right people get involved.

“I just think that it’s gonna take the right entity to set aside a chunk of property and say hey, we want to build these, and do multiple at a time and save the money that way and get some people moved into these,” Karsunky says.

Until then, they’ll move slowly, helping address housing shortages in rural Alaska one “mini home” at a time.

Throughout April and May, KCAW will be bringing you stories about affordable housing solutions every Friday as part of our “Building Solutions” series. To find photos and more in-depth reporting, visit Erin McKinstry is a Report for America corps member.