Fairbanks North Star Borough adopts tiered tax incentive to spur multifamily, family-sized housing

The Fairbanks North Star Borough Assembly on Jan. 29 adopted Ordinance 2026-01, a property-tax incentive intended to accelerate construction of multifamily rental housing with a focus on two- and three-bedroom units, after amending the measure’s water-connection language. The ordinance, sponsored by Mayor Hopkins, passed on a 7–0 vote as amended.

Supporters and borough staff said the borough faces a tightening housing market made acute by rising prices and inbound military personnel. In a staff presentation, Tom Hewitt said for-sale inventory in the Fairbanks-North Pole area runs about two to two-and-a-half months and that average home-sale prices are roughly $330,000 in Fairbanks and about $370,000 in North Pole. Hewitt told the assembly three-bedroom rental units have seen particularly large increases; he said the bureau’s rental survey showed a rise from about $1,500 in March 2020 to roughly $2,500 in late 2025.

"Housing availability is one of the most significant constraints facing Fairbanks," Katie Yarrow, president and CEO of the Fairbanks Chamber, told the assembly, urging the borough to treat the incentive as one tool among many and to ensure smaller builders can participate. Community organizers and residents who testified—including Tristan Glowa (Fireweed Collective), Jomo Stewart (FEDC), and several young residents—urged the assembly to prioritize family-sized units and to consider seniors, students and other locally vulnerable populations alongside military needs.

The ordinance creates a tiered exemption designed to favor larger units and ensure long-term housing supply. Under the ordinance as presented, projects are eligible for varying maximum exemption periods tied to unit counts and bedroom mix: small projects (2–4 units) can receive shorter exemptions, while developments of five or more two-plus‑bedroom units can be eligible for up to 10 years of property-tax relief. The assembly also approved program safeguards: required licensed contractors, an annual reporting requirement, and a repayment provision should a property be converted to short-term rentals while the exemption is in effect.

During debate members focused on application timing, administrative burden and public-health implications of where units may be built. Assemblymember Wilson moved to delete a line in the ordinance that would have required each unit to be "connected to a publicly regulated water utility." After discussion the assembly amended that amendment to require that units be connected to "a publicly regulated water utility or a water holding tank or a water well," language the assembly adopted by vote. Chair announced the amendment-to-amendment carried 6–1 and the main motion as amended carried 7–0.

Proponents said the changes preserve public-safety protections while expanding the geographic areas eligible for incentives — an important consideration for parts of Badger Road and some North Pole parcels not presently served by municipal water. Opponents and some public commenters urged the borough to pair the incentive with affordability requirements and stronger energy-efficiency standards so new supply also meets the needs of low- and moderate-income residents.

The assembly’s action makes the incentive available under the terms adopted; application procedures, staff review and assembly discretion over final approvals remain part of the implementation process. The assembly also moved several related planning and financing items on its agenda during the same meeting.

Sources: staff presentation to the assembly and public testimony at the Jan. 29 meeting.