The City of Sitka is determined to open up more land for housing in the community, but where to put it remains an open question. At a special budget meeting last Thursday (2-2-23), the Sitka Assembly considered a study of three possible tracts of land. And on everyone’s mind was figuring out how to make sure that the effort doesn’t result in yet more unaffordable real estate.

With a proposed budget of $750,000, the study would examine three areas— the Kramer Avenue subdivision, an area of city-owned land behind Sitka High School, and state-owned land abutting the Indian River subdivision. Around $330,000 of the funding would come from the city’s benchlands capital project fund.

Finding solutions to Sitka’s affordable housing shortage is a goal of the city’s strategic and comprehensive plans.

“This is the first thing I’ve seen in quite a while that could actually make a difference on providing something approaching affordability in Sitka,” said assembly member Thor Christianson of the proposed study. “So I think this is pretty important.”

Planning Director Amy Ainslie said if the assembly approved the budget for the study, it would be comprehensive, and would rely heavily on geotechnical expertise and civil engineering. And it would need to answer several key questions:

“How much land is truly developable? What will be the cost of bringing that development? And how much housing do we get out of it? Those are sort of the core primary questions that we need to be able to answer before we can move forward with the next steps of actually pursuing development and opening land, creating a disposal plan, creating subdivisions, and all of those things,” Ainslie said.

She said the study could be scaled down, but doing all of the analyses at once would save the city money in the long run.

Mayor Steven Eisenbeisz said the city had undergone land studies in the past that didn’t result in land being opened up. And while he didn’t necessarily disagree with Ainslie’s process, he wanted to understand why the city needed to do the investigation, rather than private industry.

“Why are we the ones taking this step where land could be sold to a developer to take all the steps? It was stated earlier that if we do it, it can make the land cheaper,” Eisenbeisz said. “If we sold a large parcel for a very inexpensive amount, I think we kind of get to that same point of inexpensive land. Of course deed restrictions would have to be on there so that we get the desired results, because once it’s out of our hands, there’s very little we can say on that.”

“In the past, I think we have tried this strategy, and it has not brought a lot of fruit to bear in terms of affordable housing,” Ainslie said. “We end up…creating a lot of market priced lots that get absorbed at standard market prices. And I don’t know that a lot of our efforts have resulted in affordable housing. If the goal is affordable housing, we may need to have a stronger role in that.” 

Assembly member Chris Ystad said he supported the study, but shared concerns with Eisenbeisz about investigating the property next to the Indian River subdivision, since it’s currently owned by the state. Ystad said he didn’t feel comfortable putting money and time into land that’s not the city’s.

“I’d be more willing to look at that if we had some sort of nod from the state that they wouldn’t be willing to sell, trade, whatever has got to happen,” Ystad said. “So I think right now, I’d like to not throw assets that way until we have something figured out.” 

Ainslie said they’re also seeking state funding and support for the study–  it was included in the legislative priorities that the assembly approved last month. She said if the city does budget for it, it gives staff time between now and July 1 to work with the state on funding opportunities or possibly even a plan to secure the state-owned land.

The special budget meeting was an opportunity for the assembly to give general direction to staff about where they want the budget to end up for fiscal year 24–-a process that takes several months, and will likely be finalized in May– if the assembly approves the budget for the land study, it will be when the group votes on the budget as a whole.

It’s a tricky year for budgeting, even with some unexpected good news. City finance director Melissa Haley said the city’s sales tax revenue will exceed her conservative projections by around $2 million dollars for the first half of the year. And there are other budgeting unknowns at a national level that could impact the city’s bottom line– a possible recession and, as city administrator John Leach noted, an impending fight in Congress over the federal debt ceiling, which has led toward government shutdowns in the past.