Unless the community takes steps to remedy the shortage of residential lots, the outlook could be bleak for Juneau's economy, they said.

"I think it's pretty clear we have a problem," said Alan Wilson, president of the Home Builders Association of Juneau and owner of Alaska Renovators. "It's a serious, critical problem."

Juneau home builders built 48 new residential units here in 2001, and 86 in 2002, and will build a projected 90 units by the end of 2003, said city Community Development Director Dale Pernula.

But the number of housing lots created in those years did not keep pace. In 2001, 19 lots were created; in 2002, 38 lots were created; and in 2003 only 22 new lots will be created.

And those lots are expensive, said Wilson.

In Juneau, $60,000 is considered a good buy for a residential lot, he said. Home builders in the Matanuska-Susitna borough told him that a buyer would spend about $20,000 on an affordable lot there.

The lack of easily developed land and the expense of preparing lots - especially those with steep slopes and wetlands - mean that many middle-income people can't afford to buy a home here, Wilson said.

"The city has done well with (creating) low-income housing, and on the upper end those people can afford beachfront housing," Wilson said. "It's the working-class people that are having a tough time."

Several of Wilson's employees who had household incomes of $50,000 to $80,000, have left Juneau in recent years because they couldn't afford to buy a home here.

"That trickle-down effect affects all of us," he said.

Shawn Paul, a real estate broker with Remax in Juneau, echoed Wilson's sentiments.

The only situation in the near-term that would make housing affordable is an economic downturn, Paul said, "and nobody wants that."

One suggestion for a long-term solution would be for the city to change zoning so that land can be divided into smaller, more affordable lots.

Wilson suggested that a new system to streamline the permitting process for developers also would help.

"Assign one person to a permit and have that person be responsible for it," Wilson said. That would prevent permit applications from being lost in the system.

City planner Pernula sees the development of infrastructure - the building of roads and the installation of sewage and water systems - as the responsibility of the private sector, but he said the city can take certain steps to alleviate the problem.

Creating a second crossing of Gastineau Channel to North Douglas is key to opening the western side of Douglas Island for development, Pernula said.

"A lot of the best development potential for land, both residential and industrial, is on west Douglas Island," he said.