Homer City Council proposes 5% property tax cap to combat rising housing costs

The Kenai Peninsula Borough Finance Committee convened on April 15, 2025, to discuss pressing financial issues affecting local residents, particularly the rising cost of living and property valuations. A significant focus of the meeting was a proposed resolution aimed at capping property tax increases at a maximum of 5% annually. This measure is intended to alleviate financial pressure on families and seniors, especially those on fixed incomes, as they navigate the challenges of escalating living costs.

Committee members expressed concern over the affordability of housing in the region, noting that Homer has recently become the most expensive place to live in Alaska. The proposed cap is seen as a tool to help stabilize property values and prevent displacement of local residents by wealthier individuals purchasing properties for short-term use. The discussion highlighted the struggles of families who are forced to choose between basic necessities, such as food and fuel.

The resolution aims to provide a mechanism for controlling property tax increases while acknowledging the reality of rising property values. Committee members emphasized that while they can adjust tax rates, they cannot directly influence property values, which have been increasing rapidly. The proposed cap would serve as a safeguard against unsustainable growth in property assessments, which could leave many families unable to afford homes.

In addition to the cap, the committee is exploring other measures, including discounts for borough employees and residents purchasing borough properties, to further support local affordability. The overarching goal is to create a more balanced housing market that allows young families and lower-income residents to secure homes without facing overwhelming financial burdens.

The committee's discussions reflect a broader concern about the economic viability of living in the Kenai Peninsula, as members seek to implement strategies that promote long-term affordability and community stability. The proposed resolution will be further evaluated, with the committee members tasked with refining the ordinance to best serve the needs of the community.