Sitka may be close to enacting new restrictions on short-term rentals

Panorama of Sitka in August 2015 (Photo by David Purdy/KTOO)

The rules governing short-term rentals in Sitka may be changing soon. When the assembly met on Tuesday, it greenlit changes that would affect new permits for short-term rentals in residential zones. But the ordinance needs to pass muster at the assembly table a second time before it can take effect.

Right now, a short-term rental is any property rented for less than 14 days, typically through sites like AirBNB and VRBO. The number of short-term rental permits in Sitka has nearly doubled since 2017, and concerns in the community have been mounting about how that’s affecting Sitka’s already tight housing market.

In March, the assembly narrowly voted down a one-year moratorium on new short-term rental permits. After the moratorium failed, some assembly and planning commission members held a town hall seeking ideas to address the impact of short-term rentals on Sitka’s housing market.

Under the proposed rules, a property would only be eligible for use as a short-term rental if it’s the applicant’s primary residence. That means the owner has to occupy the home for at least 180 days a year. Existing short-term rentals would be exempt from the new rules, with one exception. If the ordinance gets a final stamp of approval, all short-term rental permits will sunset when a property is sold, meaning they cannot be transferred to a new owner.

The planning commission approved the ordinance in a 3-1 vote on Aug. 17.

Commission member Katie Riley said it strikes a good balance between protecting residential areas and affordable housing, while allowing residents to continue to generate income on their properties through short-term rentals.

“These two restrictions, the primary residence and the sunset upon the sale of the property, were the most heavily supported throughout the community survey on short-term rentals that took place back in May of 2021, as well as the town hall that occurred this spring,” Riley said. “So we’ve seen long and enduring support for these common sense regulations. And I think that they’re going to help protect the integrity of our community in the long and short run.”

The new rules would only apply to short-term rentals in residential zones. Operating a short-term rental in a commercial zone doesn’t require a permit. The changes would not affect bed-and-breakfast permits either.

Several members of the public spoke in support of the ordinance, including Tory O’Connell Curran, who laid out statistics from a data published by the Pew Charitable Trust’s nonpartisan news organization last year. It  points to a nationwide trend of investment firms buying up homes, contributing to a housing shortage.

“Fully one quarter of all single family homes nationally were bought by investors last year,” she said. “In Alaska, there was a 37% increase last year, up to 17%. So that’s investors buying family homes not available then for families.”

Former Sitka Assembly member Richard Wein questioned whether the sunsetting of the permit made sense.

“If you have a B&B, you’ve kind of constructed your property around this type of service,” he said. “And so if you make a sale, it would be common sense and logical that the individual would be selling their business as well as their property. So I think that some of these aspects need to be considered.”

Assembly members on the whole supported the ordinance, including Mayor Steven Eisenbeisz. But he still had questions, like how it would be enforced or whether local data supported it.

“My number one concern with this ordinance is data. I’ve asked for it before, to show me something that absolutely indicates that short-term rentals are a cause, or are the cause, of not having long term rentals or houses on the market,” Eisenbeisz said. “And the reason that I need that is because I’m happy to make ordinance based on fact. I’m not happy to make ordinance based off of assumptions.”

Assembly member Kevin Knox, who co-sponsored the ordinance with Kevin Mosher, said the city doesn’t have the hard numbers on how many long-term rentals have been converted to short-term rentals, and he hoped they’d do a deeper data dive in the future. But he pointed to a recent planning meeting in which three individuals who are not Sitka residents secured a short-term rental permit for a single family home they purchased earlier this summer.

“But we do have that one very solid concrete one that just happened, this last planning meeting that we can point to,” Knox said. He added that he knew one example “doesn’t mean a whole lot. But it’s, you know, it’s there. It’s happening. That was a long term rental and was pulled off, that is no longer there.”

Ultimately the assembly approved the ordinance unanimously. It will come before them again at their first meeting in September — the last opportunity for Sitkans to give public comment. If approved it will go into effect on Sept. 14.

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