Mayor LaFrance uses State of the City to sell her sales tax … as downtown street people take over

Anchorage Mayor Suzanne LaFrance used her State of the City address on Monday to make a full-throated pitch for a new 3% sales tax, telling the Anchorage Chamber of Commerce that the city must “modernize” its revenue structure.

Her remarks came at the Chamber’s weekly “Make It Monday” forum at the Dena’ina Center, where the audience is largely the city’s well-funded nonprofit sector, one of the chief supporters of larger government footprints and new taxation mechanisms. Small businesses make up a smaller and smaller percentage of the group’s membership.

LaFrance painted a rosy picture of her first year and a half in office, saying her administration has strengthened the municipal workforce, improved snow plowing, and steered Anchorage onto a better path.

She attributed Anchorage’s growing vagrancy crisis not to policy decisions at City Hall but to the lingering effects of the Covid-19 pandemic of 2020–2021.

Her solutions lean heavily on new construction, new taxes, and new incentives for developers. LaFrance reiterated her “10,000 homes in 10 years” initiative, which depends on substantial tax breaks for apartment complexes. These are tax breaks that would shift more of the property-tax load onto homeowners.

She also announced she intends to move forward with her plan for a “micro-unit community” on the land at Tudor and Elmore Roads. That’s the same site former Mayor Dave Bronson had designated for a large-scale homelessness navigation center and emergency shelter, which LaFrance vigorously opposed while serving on the Assembly.

The micro-unit concept consists of tiny standalone structures, roughly the size of a king-sized bed and a closet. Versions of this model have been widely adopted in California under Gov. Gavin Newsom, who set aside hundreds of millions of dollars for a statewide rollout. Early results from California and other states have been mixed at best.

A Los Angeles evaluation showed fewer than 25% of residents transitioned to permanent housing, while more than half returned to homelessness due to untreated addiction or mental-health issues.

Oakland’s program met just 28% of its targeted 50% progression rate. Safety and maintenance problems have also plagued sites elsewhere: flooding, broken heaters, and severe limits on basic amenities such as showers.

One LA location had just two functioning hot showers for roughly 80 residents. Because between 30-40% of California’s homeless population struggles with substance-use issues, violations are frequent; Tulsa’s Eden Village sent five of its 25 residents to rehab in 2025 alone. That’s 20%.

Communities around North America have pushed back on tiny-home encampments, citing safety concerns, crime, and a lack of visible improvement. Neighborhood resistance has pushed many projects into industrial zones, funding gaps have caused major delays, and some municipalities, like Penticton, British Columbia, have rejected proposals outright over concerns they would not reduce vagrancy.

LaFrance told the Chamber she will also bring hundreds of low-income housing units to Eagle River. What she did not mention is that many in Eagle River are already exploring detachment from Anchorage’s municipal structure, a sign of continued dissatisfaction with the city’s direction. Eaglexit is actively trying to bring the matter to a public vote.

The mayor is now halfway through her term, and although she has announced multiple housing concepts, most remain in the planning stage. The Bronson administration’s navigation-center model, which would have provided centralized services, workforce engagement, and warm beds, never got the necessary Assembly approvals to move forward. The building materials purchased for that project are now being repurposed at the Port of Alaska.

Meanwhile, downtown Anchorage continues to grapple with some of the worst doorway-sleeping conditions in years, with people bedding down at night on frozen concrete just steps from businesses preparing for holiday shoppers.

The mayor’s speech outlined a new path for Anchorage, but the crisis remains visible on downtown streets, where residents and shopkeepers see the consequences every morning, people cold, vulnerable, and without shelter, while the city debates yet another multi-year housing plan.