Last week, the Anchorage Economic Development Council (AEDC) released its first Cost of Living Report for Anchorage. The report is based on the findings from the national Cost of Living Index (COLI) survey, which was developed by the Council for Community and Economic Research. Each participant's index is a percentage of the average for all prices. The index does not measure that change of prices over time, but rather the relative cost of living compared to the national average. The survey measures prices of goods and services in 306 cities throughout all 50 states. There are six categories for the survey: housing, health care, miscellaneous goods and services, grocery, transportation and utilities. In 2013, Anchorage ranked as the 23rd most expensive city in the US. The cost of living in Anchorage was 126.2 percent of the national average.
2013 was the 2nd lowest reading on the past five years for Anchorage. There was a 3.4 point decrease from 2012 in the overall composite, and four of the six indices decreased in 2013. The two that rose shouldn’t be a big surprise to anyone, housing and healthcare. Anchorage ranks fourth in the nation for the cost of healthcare. The only three cities in the nation with higher costs are Fairbanks, Juneau and Kodiak. Illustrating, Alaska has the highest healthcare costs in the US. The cost for housing in Anchorage kept rising as well. Anchorage ranks 20th in the nation in relation to the cost of housing. We are ahead of Chicago, Portland, Seattle and Philadelphia in housing costs. As we have noted in previous posts, it is alarming that Anchorage has a higher cost of housing than large, densely populated areas. The average sales price for a home in Anchorage in 2013 was nearly $347,000, up 2.9 percent from 2012 and 7.8 higher than 2011.
The four other factors decreased between 2012 and 2013, and the only index that was below the national average was utilities. The average cost of utilities sat just below the national average at 99. Even though Anchorage’s cost for natural gas was 126.4 percent of the national average, electrical was only 77 percent of the average. Grocery saw a large decrease, going from 129.1 to 113 between 2012 and 2013. In a recent Anchorage Daily News Article, AEDC CEO Bill Popp, noted that he felt the decrease was due competition in the grocery business. Several new Wal-Mart superstores, Sam’s Club and the remodel and expansion of existing groceries have resulted in more local competition and reduced the cost of groceries for Anchorage residents.
Popp feels that it is possible to lower Anchorage’s cost of living by encouraging new businesses to come to Alaska and aggressively growing existing businesses. This will lead to more competition and will lower prices for many goods and services. He is also careful to note that it will take the efforts of not only policy makers, but the entire community. If the city decides to make the cost of living a priority, solutions to the rising costs can be found and implemented for Anchorage.
To read the full report, visit http://aedcweb.com/phocadownload/2013%20coli%20report%20final.pdf
Comments