Amid housing crunch, Sitka tightens rules for short-term rentals

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

Sitka is cracking down on short-term rentals run by non-resident owners.

The Sitka Assembly voted 5-0 Tuesday to adopt new rules that require vacation rental owners to live on the same property for at least six months a year. And all permits for short-term rentals will sunset when a property changes hands.

Short-term rentals are most often run by property owners through vacation rental sites like Airbnb and VRBO. Since 2017, the number of permitted short-term rentals in Sitka has nearly doubled, prompting community concerns about the impact on Sitka’s already tight housing market.

Operating short-term rentals in a residential zone requires a conditional use permit from the city’s planning commission. Under the updated rules, new applicants must occupy the property for at least 180 days a year in to secure a short-term rental permit from the city. Additionally, all short-term rental permits will sunset when a property is sold. And it cleans up city code to define a short-term rental as any property rented for fewer than 30 days.

Former city administrator Keith Brady now owns a real estate business in Sitka. He urged the assembly to hold off on the code changes and look for other ways to discourage non-residents from buying Sitka properties and turning them into short-term rentals.

“One idea is to increase our property taxes, but give exemptions to those who…live here who are residents of Sitka,” Brady said. “We do have a housing crisis. Trust me, I hear it. I have a lot of people on my list looking for rentals, looking to buy. But I don’t think this is the right way to go about doing it.”

So how much are short-term rentals actually impacting Sitka’s housing market? The answer isn’t so simple. Earlier this month, the Alaska Department of Labor listed Sitka as the community with the second highest number of short-term rentals in the state. But it also showed Sitka has the state’s highest vacancy rate for long-term rentals. Planning Commission member Wendy Alderson voiced support for the ordinance and challenged that data, saying it’s collected at a time of year when the rental market is in a seasonal transition.

“I don’t know if you fill out the rental survey, if any of you have rentals. I do. And interestingly enough, when you fill out that residential rental survey, it specifies ‘Check if vacant the week of March 11.’ So you have to have a vacant rental the week of March 11 in order to check “vacant,’” said Alderson.

“To me, I’ve always thought that that indicates that, you know, it’s a shoulder season, and short-term rentals are usually empty the week of early spring. And if you haven’t filled your place seasonally, and you’re turning it over and waiting for short-term rentals, it’s going to indicate that you have a vacant rental, which I’ve always thought indicates that it’s it’s a false number.”

This spring, Alderson supported a measure to put a temporary moratorium on short-term rental permits. But the freeze narrowly failed at the assembly table. So the assembly went back to the drawing board, and held a town hall to get community input. The idea for new restrictions on short-term rental permits sprung from that meeting.

Assembly member Kevin Mosher noted that the process to get Tuesday’s ordinance to a final vote had been long and public. And even though some questioned whether there was enough data to demonstrate the impact of short-term rentals on Sitka’s housing market, he said they couldn’t afford to wait to do something.

“If we wait till we have all this 100% concrete data, it’s going to be too late. Especially a place like Sitka, where we don’t have other places to live,” Mosher said. “We are in a housing crisis. And this is the beginning step and trying to help find solutions.”

Assembly member Dave Miller, however, was conflicted.

“This is that decision that I’m sure whichever way I vote, I’m gonna lose, I’ll say, friendship.,” he said. “Because people feel pretty strong about this.”

KCAW - Sitka

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