Kodiak Island Borough has highest rent in Alaska

The Kodiak Island Borough has the highest rent in the state. That’s according to a publication from the Alaska Department of Labor & Workforce Development that looks at the cost of living in Alaska and economic trends for July 2016.

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Bill Cope (right) and a butcher shop employee pose in 20th Century Market in downtown Juneau around 1950. (Photo courtesy of Violet Cope and featured on cover of Alaska Economic Trends, July 26, Volume 36 number 7.)
Bill Cope (right) and a butcher shop employee pose in 20th Century Market in downtown Juneau around 1950. (Photo courtesy of Violet Cope and featured on cover of Alaska Economic Trends, July 26, Volume 36 number 7.)

Alyssa Rodrigues, an economist with the Alaska Department of Labor and Workforce Development who works in the research and analysis Section, says the Coast Guard presence may have an impact on rent in Kodiak.

“If you have a large population of people who are getting a particular allowance, it almost sets a floor. So, if someone, just for example, had a housing allowance of $2,000 a month, then most people wouldn’t want to rent for anything less than that, because they know that they can get that from someone who has that housing allowance.”

She says the availability – or lack of availability- of rooms and apartments can also push up rent.

“So, if you have most of the places that are for rent already occupied, then it’s gonna take more for somebody to decide that they want to open up their home or that they want to rent out that particular property, so when you have a low vacancy rate, it kind of boosts up the price as well. It just creates more competition on the demand side.”

And constructing new buildings to provide more housing isn’t always the easiest solution, especially when there’s not a lot of property. Rodrigues says that’s an area Juneau has struggled with.

“Just because of kind of the land. They have a limited amount of flat land that’s kind of easy to build on, so it’s difficult when you need additional housing to find somewhere to build it without going really far out and then perhaps people don’t really want to live so far away from the main city.”

And it’s not just rent that makes living in Kodiak expensive.

In comparison to Juneau, Fairbanks, and Anchorage, the City of Kodiak tends to be the priciest place to buy groceries. According to the publication, the U.S. average for a half gallon of whole milk is $2.25.

For the same product in Juneau, Fairbanks, and Anchorage, the half-gallon costs anywhere from $2.30 to $2.50, while for Kodiak, it’s roughly $3. Kodiak prices for other common products like bananas, orange juice, beef, and eggs are also higher on average.

Rodrigues says that’s probably in part because importation to rural Alaska is costlier than for bigger cities, like Anchorage, where there are many grocery stores and therefore more competition.

“And we just have big economies of scale, so instead of having small shipments and having to pay maybe a little bit more per pound, say, for things to come, we can load up huge barges and really capitalize on the fact that there’s just so much being shipped to one place and reduce the overall transportation cost of each individual item or per pound. That sort of thing.”

It tends to drive up cost when one business holds a monopoly over a market.

Another standout statistic is that, while doctor and dentist visits are more expensive in Juneau, Fairbanks, and Anchorage than in Kodiak, the cost of veterinary exams are significantly higher.

Anchorage is the second most expensive out of the four at about $62 per visit and it costs an average of $76 per exam for Kodiak. The primary cause may be that Kodiak offers only one veterinary clinic.

In 2015, the Missouri Economic Research and Information Center rated Alaska the fourth most expensive state in the nation.