The Alaska House Labor and Commerce Committee reported House Bill 184 out of committee on May 18 after members and witnesses discussed clarifying the Alaska Development Authority's role in financing multiunit workforce housing.

Sponsor Representative Andy Story said the bill aims to address the state's housing shortage by giving "clarity to ADA that they will make loans financing of loans for the construction of dwelling units of 5 units or more," and described the measure as intended to help in Alaska's housing crisis.

The bill drew questions from committee members about whether ADA's involvement would compete with private banks and how projects would be owned and operated. Mark Davis, counsel for ADA, told the committee "ADA does not have the policy of competing with banks." He explained ADA often uses bond financing'including tax-exempt or private activity bonds'combined with conventional bank financing and loan participation arrangements. Davis said the difference with ADA financing is often term length: "a bank will not go past 10 years and we can go to 20 or even longer, 25," a structure that can improve project feasibility.

Committee members asked whether ADA was already authorized to do this work and why ADA had not previously funded such projects. Davis said ADA has entertained workforce-housing proposals in the past but many "did not come to fruition" because they did not "pencil out." He added that ADA is engaged in at least one active, nondisclosure-protected discussion on a large workforce-development project using bonds.

Members also discussed the intended beneficiary and ownership of housing developed under the bill. Story and Davis said the model envisioned is private developers building rental units, and that ADA's activity would be focused on private-sector workforce housing rather than public-school teacher housing. "We're focused on our workforce in the private sector," Davis said.

The committee heard that financing tools used to lower costs could include tax-exempt private activity bonds and local incentives; Davis cited the Federal Home Loan Bank of Des Moines as a rate-setting participant in some ADA loan products. The committee also noted Anchorage Municipal Code 12.70.020 as an example of a local tax-abatement provision sometimes used in larger housing deals, which the witness described as applying to projects meeting thresholds such as a percent-of-development set-aside and minimum unit counts.

Before adjournment, Co-chair Fields moved to report HB 184 (work order 34-LS0855) out of committee "with individual recommendations and accompanying fiscal notes." With "hearing no objection," the committee reported the bill out of committee. The committee set an amendment deadline of 8 a.m. the morning of the hearing and received no amendments.

The committee concluded its business and adjourned at 10:33 a.m.