434 

 Senator Wirth. Mr. Horan. 



STATEMENT OF CHARLES E. HORAN, REAL ESTATE APPRAISER 



Mr. Horan. Thank you for the opportunity to speak here. I have 

 been a real estate appraiser in Southeast Alaska for 15 years. I 

 would just like to say th^t I love the forest. I have hunted, fished 

 and camped in Misty Fjords National Monument, Admiralty Na- 

 tional Monument and in other areas of Baranof and Chichagof Is- 

 lands. I enjoy the wilderness characteristics of Alaska and believe 

 they are being adequately preserved and managed by the existing 

 Forest Service Management Program. Professionally, I have flown 

 over much of this wilderness and have valued remote and wilder- 

 ness properties inside and outside of wilderness designated areas, 

 national monuments and preserves. 



We do not know for sure what the impact of the Wirth bill is 

 going to be, but it seems to be most severe and wide-sweeping and 

 would impact the timber industry the most. The Sitka economy is 

 currently relatively stable. Alaska has had a history of boom and 

 bust, but Sitka enjoys a pretty good balance. But there is a possibil- 

 ity of that being changed by your bill, Senator Wirth, and I would 

 just like to speculate, based on our experience, and this is outlined 

 in tables — the testimony I will provide you — on what may happen 

 in Sitka because it has happened in other communities we docu- 

 mented in Southeast Alaska. 



If 20 percent of the industry was knocked out or severely crip- 

 pled, you would see interruptions in supplies of raw materials. 

 Also, incomes would drop as budgets tightened; mortgage payments 

 would be late. After savings dried up and unemployment compen- 

 sation ran out, wage earners would have to relocate and many 

 homes would go on the market. As sales increased, the prices 

 would be driven down below the level of many of the mortgages 

 people have. The owners in this position would be forced to sell and 

 either would be forced to default on their payments and possibly 

 would be sued, file personal bankruptcy or have to rent their 

 homes and subsidize the payments if possible. 



Sitka has had an active real estate market over the last eight to 

 10 years, and since 1981, September of that year, it has been pretty 

 stable and we have that pretty well documented. My guess is that 

 in the last eight to 10 years, about 40 percent of the housing indus- 

 try has either been refinanced or has been financed through the 

 original purchaser and has had a second mortgage placed on it. 

 The most popular purchase allows only 10 percent down, and in 

 some cases zero percent down, so many of the homes that have 

 been purchased over this period of time have less than 20 percent 

 equity value above their current mortgage. If 20 percent of the 

 basic industry is knocked out and homes are forced to go on the 

 market, likely we would see this kind of decline, we would see per- 

 sonal bankruptcy and devastation of the future financial planning 

 of many of our homes and a dramatic change in our life styles. 



Senator Wirth. Thank you very much, Mr. Horan. 



[The prepared statement of Mr. Horan follows:] 



