Housing agency has no set plans for proposed state land transfers, CEO tells senators

Alaska Housing Finance Corp. CEO Brian Butcher told the Senate Resources Committee on Monday that the agency has no specific plans yet for the state land the Department of Natural Resources proposes to give it at no cost.

The six proposed transfers add up to more than 400 acres, committee chair Sen. Cathy Giessel said, including 220 acres at Rosie Creek near Ester and smaller parcels near Anchor Point, in Seward, near Cheri Lake in the Mat-Su and elsewhere in the Fairbanks area. Leased at the University Land Office's rate, she said, the land would bring the state treasury $285,000 a year.

AHFC says the point is housing. Butcher said the homes would be a mix, with affordable housing "a piece of it, but not possibly the majority of it." Asked whether builders would pay for the land, he said, "We see the affordable housing piece of it being what they would pay for the land." AHFC puts a 30-year covenant on its affordable units, he said.

The effort started with $4 million the Legislature gave AHFC in 2024 to acquire land for housing, Butcher said. The agency used that money, along with expiring federal rent relief funds, to buy almost 600 acres from the University of Alaska. Then, earlier this year, DNR contacted AHFC about state land it thought would work for housing. AHFC filed 26 applications; six have moved forward in DNR's public process and six more are under review. The current state budget adds $8 million for the program.

Sen. Bill Wielechowski asked, "If you don't know what you're going to do with the lands, I guess, what's the public purpose?" Butcher said that from a non-attorney's view, the purpose is housing, because a lack of new housing is damaging local economies. He said AHFC wasn't aware of the regulation DNR adopted March 14 defining public purpose for transfers like these.

DNR's proposal for the Rosie Creek land drops the state's right to take it back if it goes unused. Daniel Delfino, AHFC's planning director, said that was meant to give developers' lenders clear title. Butcher said AHFC has no problem putting the clause back in, and that if a parcel can't serve housing, the agency isn't necessarily interested in keeping it.

Much of the land may not be buildable. Wetlands and lakes often leave less than half of a parcel usable, Butcher said. Giessel said she was "marveling" that the homes could be affordable on land "so remote and with so much challenge in terms of construction."

None of the transfers is final, and AHFC hasn't finished site visits, Delfino said. If a parcel turns out to be unbuildable or crossed by public trails, the agency can still pull out. "There isn't anything irrevocable that's been done at this stage," he said.

Later in the hearing, DNR Commissioner John Crowther said the housing and AIDEA transfers were part of the governor's push to put state land to use and that the governor's office worked "very closely" with the department.