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There are plans to relocate the F-16 aircraft from Eielson AFB. This in turn will result in the loss of jobs for a lot of civilians, and the loss of cash for the surrounding communities. The housing market will also be affected.
Fairbanks Daily News-Miner - Interior Alaska officials Departure of F 16s from Eielson will have huge economic impact (http://www.newsminer.com/view/full_story/17400475/article-Interior-Alaska-officials--Departure-of-F-16s-from-Eielson-will-have-huge-economic-impact?instance=home_news_window_left_top_2 - broken link)
From what I'm reading, this isn't necessarily bad news. It will be bad news in the short term, but for one thing, it will drive rent prices down, which is a good thing for non-military people like myself who are looking to move to Fairbanks, and also, people have suggested that the base be opened to private companies who might want to move in and take advantage of things like the long runway at Eielson, and all the other nice facilities it has.
It's one of those things that will be hard for awhile but might end up improving things, especially, as I said, for people who want to be able to rent a property in Fairbanks for a reasonable price. The military being there boosted the economy, but it also created some inflation in housing and probably other areas as well. Of course, any good change that could come will require the elected officials in the area to keep the best interests of the citizens in mind. Just my two cents, of course.
There is still Ft. Wainwright with it's overseas housing allowances. I'd love for prices to drop but rent is high all over Alaska. What could happen is that businesses will have to raise prices to stay afloat, or close. Fairbanks already has lost a lot of business, and they are hurting with all the deployed troops in Afghanistan. Many of the military families put their stuff in storage and headed south to wait out the deployments with supportive family.
From what I'm reading, this isn't necessarily bad news. It will be bad news in the short term, but for one thing, it will drive rent prices down, which is a good thing for non-military people like myself who are looking to move to Fairbanks, and also, people have suggested that the base be opened to private companies who might want to move in and take advantage of things like the long runway at Eielson, and all the other nice facilities it has.
It's one of those things that will be hard for awhile but might end up improving things, especially, as I said, for people who want to be able to rent a property in Fairbanks for a reasonable price. The military being there boosted the economy, but it also created some inflation in housing and probably other areas as well. Of course, any good change that could come will require the elected officials in the area to keep the best interests of the citizens in mind. Just my two cents, of course.
It would hardly put a dent on the cost of housing since both Fort Wainwright and Eielson AFB already have a very large number of brand new housing units. The reason why housing is so expensive in Fairbanks and vicinity is because the very high cost of heating fuel and electricity. For example, people who were paying around $90.00 for electricity three years ago are paying double and triple that amount today. While some military members don't want to live on base or on post, most apartments and houses are rented or purchased by civilians. Some of my neighbors rate paying around $500.00 and more for electricity, and twice or more for fuel per month (during the winter). The average cost for heating fuel is around $700 to $1,000 per month during the winter for a 1,700 sq. foot home with a 2-car garage.
Since Eielson AFB is located so close to the Fairbanks airport, and also since there is a small aircraft airport in North Pole (between the two larger runways), I daunt that companies would rent Eielson to use that runway, at least not in the near future, since those companies (FedEx, UPS, etc.) already have facilities at the airport in Fairbanks.
Take a look at this Quarterly report from the Borough:
http://co.fairbanks.ak.us/communityplanning/crc/FALL%202011%20CRQ.pdf (broken link)
Quote:
Jobs are stable, though retail is down a bit because of the overseas deployment of Fort Wainwright soldiers. North Slope work is also down for Fairbanks area-contractors and unions. Still, the twin pillars of the region's economy, the military and the University of Alaska, are stable.
The problem is energy. It is getting so expensive that it's increasingly tough for people to live in Fairbanks, local people say, despite the good employment situation.
"It is costing some people $1,000 to $1,500 a month to heat their homes in winter, and that's just unaffordable," said Jeff Cook, a longtime Fairbanks resident. Electricity rates are going up too, because power is generated mostly with fuel oil.
The bottom line is that the landlord can only offer you a place at a low cost only if you pay for the utilities. Otherwise he or she has to ask you a fortune for the same place if he or she has to pay for fuel and electricity, and this is what makes rent expensive.
However, Alaska's economy has always been up and down. That's why it's called by many a boom and bust economy, and we are due for a bust. The last one happened in the '80s, and a lot of people had no choice but to abandon their homes and move South.
Yeah, the one thing that everyone seems to agree upon (and rightfully so) is that Fairbanks is boom-and-bust, along with the rest of Alaska.
It's interesting to hear your take, along with other people's, Ray, on the cost of housing. Seems everyone's got a different opinion on that. You have pretty well driven home the fact that electricity and heating fuel are very expensive there, and the rent prices don't help. I suppose it's just a matter of learning to live without, or picking up and moving yourself, although really I don't think you'd be much better off once you'd spent all that money relocating yourself.
But the companies I'm talking about aren't FedEx and the like; I was thinking more like Boeing or Northrop-Grumman or someone who could really use a ready-made military facility with a long runway like that. In any case, the void left by Eielson will be filled as a matter of basic economics, it just might take awhile, and that's when you have to do without. I can only hope that I will last through this seemingly endless slump and that when the next one comes along, I will have been smart and made sure I was ready for it.
I just hope that this doesn't do terrible damage to the interior in the long-run, and I have a feeling it won't. As someone said in the news comments, Fairbanks has done fine without the F-16's before, and they will make it after they're gone. I guess everyone will just have to roll up their sleeves for awhile. For my part, I do wish that people would take seriously the notion that some industry should be developed in Alaska other than extraction, and I'm not anti-mining, I just think that the interior and the rest of the state would benefit from additional industrial development of some kind. Alaska is geographically and culturally like its own country, yet it depends so heavily on the Federal government and a couple of finite industries. I would think people would want to see to it that when the oil and gold dries up, there's something to fall back on. I understand the difficulties involved with transportation and the like, but they could certainly be overcome. It's just a matter of people getting involved and some people who already have money taking risks to get things started up there. Lord knows there's certainly a willing and ready workforce to fill those jobs if they were to be created.
Rent "crashing" will only help you in the short run, and as stated a large majority of the rent is utilities. So how far down can it really go anyways?
About the only thing that would would help a newly arrived person, is if housing prices crashed and you could afford to BUY something. Then you are "locked in" low. The problem is detecting the "bottom" as you could buy when prices dip 10-20% and then they fall another 50%. (Just like they did here - We are back to around 2001 pricing levels) With this crash, salaries crash too. Unless you happen to pick a recession proof career or you are retired with a defined benefit pension. Even these will feel the affects if it gets bad enough.
The price drop will certainly hurt existing homeowners tremendously, which in turn affects the overall economy, as when this happens people leave and the ones that stay spend a whole lot less. Then you have the abandonment folks that foreclose and don't pay property taxes (I know, alot of AK doesn't have them, but some communities do) and I guess "go back to the lower 48" - here they move in with family or to another state, this further drives down housing prices. It is a vicious cycle that is hard to break. As the population declines, it affects local government monetarily. This leads to government worker lay offs, which further exacerbates the problem.
Not trying to be doom and gloom- but trying to get everyone here to at least think about what has happened in a lot of localities in the lower 48. Hopefully, it is recognized and AK has good leaders than can prevent the downward spiral. Unfortunately, I do not know how to fix it or prevent it.
I do agree with some of you about the potential of Eielson AFB in being good for the economy if being used by companies, contractors, and others. But having businesses of any kind in Eielson AFB, would be extremely expensive. It would be similar to managing a small city, except that the larger buildings except for a few, are aircraft hangars. Eielson AFB has a primary school and HS, a coal-burning power plant, a commissary, BX, bank, gym, hotel, Post Office, gas station, Auto Hobby Shop, a very small clinic, and so forth. There are several very modern housing units for officers and enlisted personnel and their dependents, as well as several dormitories for single military members, there are social clubs, etc. The runway is in excellent shape since it has been well maintained through the years, and there are aircraft hangars all along its length, plus a control tower.
To have Eielson as another business center a few miles away from Fairbanks could be quite difficult because in order for businesses to exist in any place, it must have customers. Also, such a business would have to spend millions per year just for maintenance, sewage, electricity, heating. This small city would be prohibitively expensive to maintain. It would be a lot cheaper and productive for a very rich person to buy North Pole, and to turn this very small town into a business center dedicated to what its name stands for, "North Pole" (Santa and all).
Military members and their families spend their money locally, at the shopping centers, automobile dealers, and every place in town. Without this money the local businesses have to reduce the number of employees, and so the public sector. Now, add the very high cost of living to all of this and you will understand what "boom and bust" means.
There are plans to relocate the F-16 aircraft from Eielson AFB. This in turn will result in the loss of jobs for a lot of civilians, and the loss of cash for the surrounding communities. The housing market will also be affected.
Fairbanks Daily News-Miner - Interior Alaska officials Departure of F 16s from Eielson will have huge economic impact (http://www.newsminer.com/view/full_story/17400475/article-Interior-Alaska-officials--Departure-of-F-16s-from-Eielson-will-have-huge-economic-impact?instance=home_news_window_left_top_2 - broken link)
Really - won't the ANG take over?
Maybe it's about time the housing market returned to earth. Heck market it to Kalis - who want to avoid armageddon this year.
It's just step one, the next will be to move Wainright to Anchorage. You eat an Elephant one bite at a time, the liberals have been trying to close them for years all at once, now they will do it one step at a time!
Ted Stevens was their nightmare and they got rid of him by fraud, now we have no real clout except Young, and that isn't much! Sen. Baggage will sell us out in a heartbeat, and Murkowski won't push back either!
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