Beautiful scenery and great fishing are primary reasons Kenai resident Roxann Dodds said she made the Kenai Peninsula her home for nearly a dozen years. But she wouldn't deny that the cheap cost of living, compared to other parts of Alaska, also had something to do with calling the Kenai her home.
"It caters to people with a thrifty nature," Dodds said about the peninsula's cost of living. "It's an economy based on harvesting. If it cost much more, people wouldn't be able to live here."
The state's fourth most populous borough is a center for both high-paying oil and gas jobs and lower-paying retail and service jobs. With a reputation for being a bargain in terms of cost of living, some peninsula expenses -- specifically housing costs as they relate to average earnings -- are more affordable than many other areas of Alaska.
Other costs, however, namely utilities, food and retail items, are among the highest among the state's major population centers.
Dodds has lived in the same one-bedroom apartment for the past 11 years, after living in Dutch Harbor and attending school in Seattle. She said when she moved into her Kenai apartment, the rent was $385. That was a steal compared to the $585 monthly rent she paid in Seattle.
Currently, she pays less than the 2002 median for Kenai one-bedroom apartments, which is $550.
Alaska Housing Finance Corp-oration's 2002 Annual Rental Market Survey showed the peninsula's adjusted median rents -- that is, the value midway between the highest and lowest recorded rent with utilities added -- was the lowest of the state's 10 largest boroughs.
AHFC tracks six boroughs in its quarterly housing indicators report -- the Municipality of Anchorage, Fairbanks North Star, Juneau, Kodiak, the Kenai Peninsula and Matanuska-Susitna. The peninsula had the second lowest average price for single-family homes during the 2002 third quarter. The report was based on home loans that closed during that period and showed peninsula homes sold for an average of $143,386.
Only Kodiak was lower, with an average cost of $137,647 from July to September last year. But that figure was based on only 18 homes, as opposed to 118 home loans that closed on the peninsula. The big difference in the number of home sales creates an anomaly, as the report showed that Kodiak homes sold from 2000 to June 2002 were consistently more expensive than those sold on the peninsula.
The Kenai Peninsula housing market has not always been the least expensive in the state. According to the report, Matanuska-Susitna Borough was Alaska's leader in home affordability until 1992, and lost that distinction after the third quarter of that year.
James Wiedle, chief statistician for AHFC, said the Mat-Su's affordable reputation, coupled with its proximity to Anchorage, contributed to a housing boom that raised prices.
"Mat-Su has historically been the most affordable place in the state to live," he said. "But that buzz ... 'I can get more house for my money,' has attracted more people and driven up demand and price."
Low housing costs can translate to more money left over on payday. And when wages are higher, the pot is increased even more.
A report compiled by the state Department of Labor and Work-force Development from the 2000 census shows that on a monthly average, peninsula workers make up the third highest paid labor force in the state.
Only Anchorage and North Slope Borough workers earn more than the $2,794 peninsula workers averaged.
But Dodds said looks can be deceiving.
"It's pretty much lower," she said of housing costs. "But unless you're on a higher end of the (employment) spectrum, so is the pay."
State labor economist Neal Fried agreed with Dodds' assessment. He said oil and gas jobs with higher salaries combine with lower-paying jobs from a collection of other industries to create a somewhat skewed view of the peninsula's overall average payroll. He said the same applies to Anchorage and the North Slope.
"What has a disproportionate effect on the (report) is oil, which you have a lot of," he said. "Those are three major oil provinces and wages are considerably above the norm."
Kenai Peninsula oil and gas jobs earned a monthly average of $6,334 in 2000 and North Slope jobs averaged $7,040. In Anchor-age, a hub for oil and gas company headquarters, the average monthly wage in this industry sector was $8,394.
Labor department records show that these three areas of the state also lead in average monthly wages in the retail trade and service industries, which occupy the lower end of the employment pay scale.
The peninsula ranked third in both of these industries, with $1,483 in average retail trade wages, and an average of $1,610 going to service employees each month.
Dodds has several different jobs, in both the service and retail industries. She cooks for Heritage Place, and is a massage therapist at Staywell Chiropractic, both in Soldotna. And she freelances her massage skills when she is able to.
Higher retail costs, and sometimes limited supply of retail items are low points Dodds identified in the peninsula economy. But she said the availability of alternatives to these shortcomings helps to keep the peninsula attractive.
She said she could make more money doing any one of her jobs in a bigger city like Anchorage, and said her money could stretch a little bit further there as the cost of retail items is considerably cheaper.
"There's no sales tax there," Dodds said. "And fruits and vegetables and gas are cheaper. Whenever I drive to Anchorage, I leave (Kenai) with half a tank so I can fill up with cheaper gas up there."
Random calls last month to gasoline retailers around the state revealed the most inexpensive prices in larger Railbelt population centers.
Regular unleaded gas was cheapest in Fairbanks, costing $1.61 per gallon, followed closely by $1.64 in Anchorage. The average cost of regular gas on the peninsula was $1.78 per gallon.
Jeff Cook, vice president of external affairs for Williams Alaska Inc., said population contributes to gasoline prices.
"The more volume you have, and the more efficient you can be with your resources, the lower you're going to be able to sell your product for," he said. "Obviously, you get into smaller areas like Kenai or Homer and you have a lot less volume."
According to a 2002 report from the University of Alaska Fairbanks' Cooperative Extension Service, the cost of food for a week in Kenai or Soldotna for a single female between the ages of 20 and 50 is $29.77. Dodds falls into this range. The same expense in Anchorage is more than $2 less.
For a family of four with children between 6 and 11 years old, the cost of food at home for a week is $119.12 in the central peninsula area, $123.53 in Seward, and $138.87 in Homer, as compared to $100.61 in Anchorage, $100.80 in Fairbanks, and $89.99 in Portland, Ore.
Bret Luik is the foods and nutrition specialist who compiles the UAF cost of food report each year. He said more means of transportation and a more competitive market create the lower prices in retail goods.
"If it's a bigger market, prices can be lower," he said. "If a new grocery store comes into your community, you will probably benefit. Presumably to attract business, (stores) will put in lower prices."
According to the UAF report, household utilities prices don't necessarily follow the same retail pattern, however. The central peninsula is listed at $126.15 per month based on 1,000 kilowatt hours of electricity -- roughly a month's worth -- while Homer's electric services are $126.75, and Seward service costs $134.34 for a similar amount.
Fairbanks and Anchorage are cheaper, costing $99.77 and $110.55, respectively, per month.
But Fried said with retail items, the value from large population centers is available to Railbelt communities like the peninsula and in the Matanuska-Susitna borough.
"You have the best of both worlds," Fried said. "People on the Kenai Peninsula can access the competitive retail market in the Anchorage area and access very affordable housing."
Dodds said she often makes concessions to capitalize on this advantage.
"I travel up there a lot," she said. "And I buy in bulk. I'll freeze perishables like flour, or bake a lot and give what I don't eat to my brother."
Fried said the entire state still has room for improvement in the cost of health care, but he said the borough's overall economy is much more similar to that of the rest of the country than many Alaska communities. He said he and others born in Alaska view Railbelt communities like the peninsula as an overlooked commodity.
"If someone had told us that the cost of living in the Railbelt and on the peninsula was going to be on the national average, or even lower, in some cases, some of us would've smirked," Fried said.
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