AHFC: Improving Rural Professional Housing For More Than 20 Years

August 12, 2024 at 7:59am in Community, Headlines, Rural

A lot of things can happen throughout the span of 20 years. In the case of Alaska Housing Finance Corporation, the agency’s investment in safe, quality, affordable housing serving educators, public safety officers, and healthcare professionals in rural Alaska has had big impacts on communities statewide.

Between 2004 and 2024 as part of its Rural Professional Housing initiative, AHFC has distributed more than $112 million in grant funding supporting 149 rural housing projects. This endeavor has resulted in 573 housing units made available in the state's most vulnerable communities.

$98,598,114 invested to build 451 new construction units
$13,793,620 invested to upgrade and rehabilitate 122 units

Teacher housing in Kotzebue.

A Universal Conundrum

Rural communities face unique housing challenges from environmental agents, geographic isolation, underinvestment, and a lack of technical service, to limited and expensive transportation options and rising construction costs. Add Alaska’s remote towns and villages into the equation, some with a lack of basic infrastructure such as connections to the road system, water supply, and sanitation facilities, and affordable housing challenges increase tenfold. Alaska’s extremely cold temperatures, heavy snowfall, high winds, and permafrost further exacerbate the difficulties of construction and maintenance of housing structures with a ripple effect that dramatically impacts healthcare, public safety, and education - critical components of community health.

AHFC recognized early on that addressing these challenges would require a long-term strategy, collaboration, and a multi-faceted approach. Its vision involves government support, community involvement, innovative technologies, and sustainable building practices tailored to the unique needs of rural Alaska.

Identifying Challenges

A study commissioned by AHFC in 2004 found that up to 30% of teachers in rural districts who left their jobs each year did so because of housing issues. Rural school district superintendents verified this research, reporting that problems with housing created major obstacles in their ability to recruit new teachers.

Looking Back To Forge Ahead

In 2004, with the approval of then Governor Frank Murkowski and the Legislature, AHFC allocated some of its annual earnings toward a new, innovative statewide housing initiative. In partnership with the Denali Commission, AHFC offered rural government entities an incentive to lower the cost of building quality rental housing for key public service providers.

The objective from the outset was to help isolated, rural Alaska communities be better equipped to attract and retain educators, health care professionals and public safety personnel, however, initial attention was targeted on attracting teachers. This focus was necessitated by a near-crisis educational situation in numerous villages across the state, which for a number of years had faced extreme difficulties recruiting and retaining qualified teachers. Almost immediately, rural school superintendents saw an impact. School districts that were experiencing 50% teacher turnover each year began reporting zero turnover, a situation that school officials credited to AHFC’s professional housing program.

Innovation And Collaboration Creating Hundreds Of Homes

Operationally, the program was unique. Unlike more traditional loan programs designed for individuals to take on the risks of long term loans and rather than waiting for the private sector to build and operate multi-family housing, AHFC’s Rural Professional Housing initiative encouraged local school districts, tribal governments, or other local government entities to get involved thus creating a collaborative network. The approach helped to identify and remove barriers to affordable housing production and preservation, as well as comprehensively develop, evaluate, and implement housing policy plans and improve housing strategies.

The effort quickly took root, with more than 140 new housing units benefiting communities statewide in the first four years:

Rural communities that received new teacher housing in 2004 included Kotzebue, whose project was championed by then Northwest Arctic Borough School Superintendent and current Governor Mike Dunleavy, as well as Savoonga, Togiak, Chefornak, Nightmute, and Tuntutuliak.
In 2005, AHFC, working in conjunction with Denali Commission grants, was able to add another 35 housing units among the communities of Eek, Kwigillingok, St. Michael, Ambler, Kiana, St Paul, and Tyonek.
Thirty-one units were financed with grants and loans in 2006 for Hooper Bay, Scammon Bay, Hughes, Huslia, and Nulato.
In 2007, a total of 58 units were either built or refurbished in nearly a dozen rural communities including Sand Point, Nelson Lagoon, Brevig Mission, Unalakleet, Atka, Buckland, Noorvik, New Stuyahok, Akiak, and Akiachak.

Between 2013 and 2024, an additional 251 units were funded statewide with the types of housing units varying from single units to duplexes and triplexes.

The Process

Each summer, AHFC releases a Rural Professional Housing Notice of Funding Availability. A 30-day registration period begins the process, followed by an application period from July through October. AHFC offers training for applicants about half way through the process. Applications received by the required deadline are subject to an initial “threshold” review.

A review committee composed of AHFC staff from various departments use a scoring system to evaluate and provide feasibility recommendations. Funds are awarded competitively on an annual basis for the rehabilitation, construction, or acquisition of rural housing projects. The timing of announcements allows some awardees to place orders for their materials in time for spring barge delivery, ensuring prompt project starts. Eligible entities include school districts, local governments, regional health corporations, housing authorities and nonprofits with projects to be located in small communities with populations that do not exceed 6,500 or 1,600, depending on proximity to Anchorage or Fairbanks, and based on road and rail connectivity. In 2024, award allotments increased from up to $500,000 to up to $700,000, with a minimum 15% match required from the awardee.

Teacher housing in Tyonek.

The Impact

Every project is unique to best serve community needs and AHFC’s commitment to Rural Professional Housing has continued to evolve. Application narratives are heartfelt, speak to the importance of the housing, and give a true glimpse into the community and their specific circumstances.

In 2024, two Alaska Native tribes took different approaches to meet their community needs. After exploring the costs of new construction projects, Hoonah Indian Association determined it was far more cost effective to renovate an already existing building than to build new construction. The tribal government identified an existing structure to renovate to address critical professional housing needs.

In Yakutat, Yakutat Tlingit Tribe applied to AHFC with the intent to construct three new 720-square foot single family homes for teachers and health professionals. To help reduce energy use and operating costs of the housing units, YTT chose an energy efficient design that will achieve a 5 Star + Building Energy Efficiency Standard Energy Rating. The project will also feature heat recovery from the exhaust of a local power plant, expected to offset 80% of space heating requirements and save each unit $700 annually in heating costs. The units also feature solar panels estimated to generate 2,900 kWh per year and save roughly 60% in annual expected energy usage and 40% in annual electricity costs.

“Two decades of data shows the substantive impact of AHFC’s Rural Professional Housing program on communities that offer safe, quality, affordable housing for key professional services whether that be for teachers, law enforcement, or healthcare providers.”

- Bryan Butcher CEO/Executive Director of AHFC.

On The Horizon

As AHFC’s Rural Professional Housing initiative has expanded, so have the trends. Currently, Rural Professional Housing continues to provide grant funding for both multiplexes and single family homes. AHFC is also seeing grantees experimenting with fully furnished and shipped manufactured homes, as well as exploring options for tiny homes. Communities are seeing the value in collaborating with a variety of partners and thinking strategically as to how they can truly leverage options that fit the broader needs of their communities.

Providing resources to address the ongoing need for rural professional housing statewide remains a priority for AHFC. The Rural Professional Housing concept has been the catalyst for a new AHFC effort which debuted in 2024, the Last Frontier Housing Initiative. This direct government to government program creates a partnership between AHFC and communities to develop housing for low-income Alaskans and critical professional State employees. In 2024, AHFC is partnering with Kotzebue, Nome, Bethel, Sitka, and Ketchikan to collectively distribute $26 million in Last Frontier Housing Initiative funding for the development of new housing.