Kenai rezones city land for housing amid affordability crisis

The Kenai Planning and Zoning Commission voted Thursday to recommend rezoning part of an 81-acre city parcel from conservation to suburban residential. The move advances a plan to address housing shortages despite neighbor concerns about roads and wetlands. The recommendation goes to the Kenai City Council for final consideration.

The commission approved the rezone for land at 10060 Kenai Spur Highway. City Manager Terry Eubank cited a fall 2025 survey showing 74 percent of residents believe the city has a housing availability and affordability problem. The rezone applies to roughly 10 to 15 acres of upland suitable for development. The remainder contains wetlands and drainage areas that will remain undeveloped.

Kenai has moved to reduce barriers to housing construction by rezoning city land and revising subdivision standards. The city applied in August 2025 to the Federal Aviation Administration for a deed of release removing restrictions on the 81-acre parcel. The parcel had been reserved for airport-related uses. The FAA approved the release in September 2025. The approval allows the city to lease or sell the land for non-aeronautical purposes.

The suburban residential zone permits lot sizes as small as 7,200 square feet. The zone allows up to six family dwelling units by right. Larger structures are possible through conditional use permits. Eubank said the smaller lot sizes are necessary to make utility infrastructure economically viable. The city has not completed an application with a developer but is working with one interested in building apartments.

Lisa Coates, who lives at 410 Magic Avenue adjacent to the parcel, testified against the suburban residential designation. Coates said the area's rural character, inadequate road infrastructure, and proximity to a fire training facility that generates smoke during exercises make higher-density development inappropriate. She asked the commission to rezone the buildable portion as rural residential. That zone requires 20,000-square-foot lots and limits structures to four units.

Coates said the roads are mostly dirt. She said the city has not improved them since they were originally built. She raised concerns about wetland impacts and asked who would be responsible for upgrading roads if higher-density development proceeds. She said the wetlands provide habitat for wood frogs, wood ducks, and other wildlife. She said the wetlands cannot be easily restored once disturbed.

A commissioner proposed an amendment to rezone the parcel to rural residential instead of suburban residential. The commissioner cited concerns from neighbors about density and infrastructure. The amendment was seconded but failed. Eubank said the 20,000-square-foot minimum lot size in rural residential zoning would make development uneconomical.