The Fairbanks North Star Borough Assembly on Thursday approved tax incentives for new multi-family housing construction, like apartments.
Borough Mayor Grier Hopkins’ administration put forward the ordinance, which exempts some types of new residential construction from borough property taxes for up to 10 years. That’s if a developer constructs five or more units, each with at least two bedrooms, at the same address. The ordinance also includes breaks for smaller multi-family developments, but with shorter tax exemption terms.
The Hopkins administration says it’s needed to encourage residential developments. The administration says that would help ease an existing housing crunch, which could get worse as around 1,000 servicemembers and their families are anticipated to head to Fort Wainwright and Eielson Air Force Base over the next couple years.
Tom Hewitt, the special assistant to the borough mayor, told the assembly the housing situation is an issue that warrants policy intervention.
“More housing anywhere and everywhere would help, but especially in the Badger Road-North Pole area, stuff that’s convenient to both bases. And the planned military growth at both of those bases will strain supply further, so this is a problem that we can’t afford to just assume will fix itself,” he said.
Location is another criteria for eligibility. To qualify for the tax breaks, new housing construction must be in a so-called military facility zone, in city of Fairbanks or North Pole boundaries, or in an area “suitable for high density residential development,” as described in the ordinance.
The measure is modeled after a similar tax incentive program that ran under the administration of former Borough Mayor Bryce Ward in 2022 and 2023. The Hopkins administration says that program successfully increased multi-family housing construction, and that the new measure revives it with a few tweaks based on feedback from builders.
The measure received strong support during public testimony, though commenters frequently said it’s a partial solution – not a cure-all.
“The housing issue is larger than could simply be contained in this ordinance, so we are recognizing that this is a meaningful step forward, and we want to consider this a piece in a larger puzzle,” said Katie Yarrow, the president of the Fairbanks Chamber of Commerce.
The assembly amended the measure slightly to loosen some restrictions concerning water supply to qualifying developments, then passed the ordinance unanimously. It went into effect Friday. The application window for the exemptions closes at the end of 2028.