Mayor LaFrance proposes two ordinances to encourage housing development

Mayor Suzanne LaFrance is proposing two new property tax incentives to encourage the building of lower-cost homes in the Municipality, promote mixed-use development and improve housing affordability.

The pair of proposed ordinances is part of the Mayor's broader 10,000 Homes in Ten Years strategy.

"For our community to truly thrive, Anchorage families need a housing market where homeownership is actually within reach," said Mayor LaFrance. "These tax incentives address the housing shortage head-on by rewarding the development of lower-cost housing and mixed-use spaces. We are making it easier to build here, and easier to buy here-step by step."

Incentivizing "starter" homes for first-time buyers

As proposed by Mayor LaFrance, AO 2026-89 is designed to encourage the construction of lower-cost "starter" homes while also expanding access to home ownership for first-time buyers.

This ordinance would establish a 10-year property tax break available to first-time homebuyers who purchase a newly constructed home for a sales price that is at or below the average single-family home value in the Municipality. To qualify, a property must be occupied as a primary residence. The tax exemption would apply to the value of the newly constructed residential portion of the property for up to 10 years.

Anchorage is experiencing a significant housing affordability challenge. Home prices rose 40% from 2020 to 2025, and the average assessed value of a single-family home was nearly $500,000 in 2026.

By lowering the cost of homeownership, this proposed tax break would make it easier to sell qualifying homes to first-time buyers-ultimately improving project feasibility for builders and driving the development of more entry-level housing in Anchorage. Reducing property taxes during the first years of home ownership would improve affordability for first-time buyers and help bolster the supply of "starter" homes.

Promoting mixed-use development

The second proposal from Mayor LaFrance would promote the development and rehabilitation of mixed-use buildings with owner-occupied residences. This ordinance aims to increase the housing supply and encourage the redevelopment of underused commercial properties by providing a tax incentive for adding lower-cost owner-occupied residential units.

The ordinance would create a property tax break for developing four or more residential units in a mixed-use development, such as adding condominiums to the top floor of a building with commercial office spaces below. Buyers who purchase the units for primary residences could receive the tax exemption for 10 years. To qualify, the units must be sold at or below the average assessed single-family home value.

"We need to use every tool at our disposal to drive new development, improve affordability and keep our workforce in Anchorage," said Mayor LaFrance. "As a community, we have vacant office and commercial spaces but a shortage of homes. Converting some of this space to housing just makes sense, but it can be expensive. This tax incentive will help make it happen."

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Contact: Emily Goodykoontz [email protected] 1 (907) 205-6683 ​

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