ANCHORAGE, Alaska (AP) — Anchorage officials said a new five-unit condo development built on a busy street near downtown represents an urban planning experiment that could ease the city’s housing shortage.

The two-story units have been listed on the market for $224,000 or less — close to half the price of the average home-sale price in the city, the Anchorage Daily News reported last Sunday.

Structural engineer Seth Andersen built the development in the neighborhood where he lives and said he did not expect to make any money by selling them.

Instead, he and his wife Bonnie DeArmoun built the homes to determine if they could create affordable housing in the city’s core, Andersen said. Andersen, a former Anchorage Planning and Zoning commissioner, calls himself a “hobbyist” developer.

Andersen said while some people believe larger developments best address the city’s housing problems, small housing projects such as his can be more effective.

He said smaller projects can be more affordable and lead to lower mortgages or rent. Anderson added that smaller developers can get by with fewer overhead costs and demand less profit because their risks are reduced.

Advertising

“This provides housing we don’t have much of, a smaller house downtown, that are not rentals,” said Michelle McNulty, the planning director for the municipality. “The design is comparable to surrounding residences. It’s a little more density on the property, but in a way that’s in character with the neighborhood.”

Bill Popp, president of the Anchorage Economic Development Corp., said home construction in the city has fallen short of need by about 400 units a year, based on a long-term outlook completed in 2012.

Though Anchorage’s population has decreased recently, the housing shortfall has forced single-family home prices above $400,000 on average, Popp said.

The condo units, at 840 square feet (about 78 square meters) or less, were listed over a month ago but none have yet sold.

The Anchorage Assembly had agreed to rezone the plot of land in 2017. The rezoning allowed for five units to be built in total instead of four.