Ketchikan’s borough offices are in the White Cliff Building (KRBD staff photo)

Ketchikan’s Borough Assembly is scheduled to consider a package of proposals on Monday aimed at increasing the housing supply in Ketchikan.

One proposal would ease permitting requirements for multifamily homes. Under the proposal, triplexes and four-plexes could be approved without a Planning Commission hearing if one parking space is available for each unit. The package  would also allow plans for “detached accessory dwelling units” — those are small residential buildings on the same lot as a larger house — to bypass the Planning Commission.

Another portion of the proposal would allow for custom zoning on smaller lots. As it stands, lots need to be at least two acres to qualify as a so-called “planned unit development.” Planning director Richard Harney explained at the assembly’s last meeting on July 18 that reducing that requirement to 10,000 square feet, or about a quarter acre, could spur housing development.

“The impetus for this was twofold,” Harney said. “First is to increase the density in neighborhoods and help with infill development, and the second is to provide a means for development of tiny home parcels.”

The proposal comes as housing is increasingly expensive and difficult to find in Ketchikan. The Borough Assembly is scheduled to take a final vote on the plan Monday.

In other business, the assembly is slated to take up a plan that could rework how borough-wide property taxes work in Ketchikan in an effort to shore up the borough’s ailing Local Education Fund, which is running out of money.

The proposal from Mayor Rodney Dial would create a partial property tax exemption for homeowners while hiking the tax rate, as he explained at the assembly’s last meeting.

“The goal is to find the sweet spot that would generate revenue while not increasing the taxes of homeowners,” Dial said.

The exemption would cut the taxable value of an owner-occupied home by 20%, up to $50,000. That would reduce property tax revenue by a little less than $800,000. That would be offset by a property tax hike.

The borough’s finance department estimates that the property tax rate would need to go up about 10% from 5.2 to 5.74 mills to cover the exemption.

The end result would be a savings for most homeowners. But Assistant Borough Manager Cynna Gubatayao explains that businesses, apartment buildings, rental properties and remote cabins would end up paying more. Take two properties valued at $300,000 — say, a commercial building and an owner-occupied single-family home.

“In this example, if you raise the mill rate in order to make it budget neutral, so that the Local Education Fund is not seeing any difference, then the homeowner would have an $85 savings for the year, and ineligible property owners — the commercial property owner — would see a $210 increase,” she said.

In a memo attached to the July 18 agenda, borough staff raised a few issues with the idea. They say processing the exemptions would require at least one new staff member, increasing the pressure on the borough’s general fund. Finance officials also raise questions about the effect on renters: they say that because the exemption would apply only to owner-occupied homes, landlords with rental properties would likely pass on their higher property taxes to renters.

“Thinking it through logically, if I own a home that I’m renting to someone else, and the property taxes for that go up, I have to recoup my losses. So eventually, the rent that my tenants are paying is going to go up, too,” Gubatayao said.

It’s also unclear just how many Ketchikan residents own their homes — Gubatayao says the borough doesn’t track that data. She’s recommending the assembly defer the proposal at least through January 2023 to give borough officials more time to research the idea.

If the assembly decides to go ahead with the exemption, it would be put to a public vote this October.

Ketchikan’s Borough Assembly meets at 5:30 p.m. Monday in the White Cliff Building. Members of the public have a chance to weigh in at the beginning of the meeting. The meeting is broadcast on local cable channels and livestreamed at the borough’s website.