People could only own one short-term rental unit in Alaska under new House bill

buildings stand in front of a snowy mountain range
The number of short-term rentals has skyrocketed in Alaska in recent years, including in Anchorage. (Abbey Collins/Alaska Public Media)

People could only own one short-term rental unit in Alaska and they would have to register it with the state under a House bill introduced earlier this month. 

The bill, sponsored by Anchorage Democratic Rep. Andrew Gray, aims to boost available housing in Alaska by curtailing the growth in short-term rentals like AirBnBs. 

“If we want to increase the supply of available housing as quickly as possible, I don’t think there’s a faster way than this,” said Gray. 

The number of short-term rentals has skyrocketed in Alaska in recent years. In Anchorage, between 2019 and the summer of 2022, the number of units grew by more than 70%, to 2,100, according to AirDNA, an independent group that tracks short-term rental markets.

That means there are fewer rentals available for residents, said Gray. 

“Although no one can really quantify how much the short-term rental market is driving the lack of available housing, based on what we’ve seen in other states — I just don’t think Alaska is an exception,” he said. 

AirBnBs are also big in many other communities outside of Anchorage, including in Southeast and on the Kenai Peninsula

Gray’s bill is one of the few bills in the Legislature this year that addresses housing.

Some of the impacts of the bill, if it became law, are still unclear.

There is relatively little research about the effect of registration requirements. One study that hasn’t yet been peer reviewed found that requiring owners to register can reduce the number of short-term rentals in some cities by nearly 30%.

Andrew Bibler, the study’s lead author and an economist at University of Nevada, Las Vegas, cautioned that the research is ongoing and it’s too early to draw firm conclusions about the effect of the policies in all cities. He said many people who use AirBnB are not wealthy and use the platform to supplement their income by renting out individual rooms. He said research continues into the question of whether requiring registration can increase the rates of foreclosures. So far the evidence is inconclusive. 

He said that one trend that is clear is that having more restrictions — like ownership limits — has a larger effect on the number of AirBnBs than merely requiring registration. 

“It seems that the policies that are enforcing strict rules have some bite, and they decrease the size of the market, but that’s particularly true where the rules are strict and where there’s a relatively dense market,” he said. 

Several studies have shown that shrinking the size of AirBnB markets correlates with lowering home and long-term rental prices. 

“I would expect a similar effect here,” said Brett Watson, an economist at the University of Alaska Anchorage Institute for Social and Economic Research.

There is pushback to the bill, specifically limiting the number of short-term rentals each owner could register to just one. AirBnB doesn’t share information about how many people rent out more than one unit. 

Anchorage resident Joe Connoly is among those who say the limit is problematic. He already has an AirBnB near his home on the upper Hillside that he hopes his aging parents can move into in about 10 years. He’s planning to build another to rent out as an accessory dwelling unit, more commonly known as a mother-in-law apartment, to supplement his income. He said he and his wife are self-employed and have a modest income and he would rather invest in housing than the stock market. 

“We wouldn’t be making money until we’re 70 if we did a long-term rental. If we did a short-term rental we could pay it off in 10-15 years,” he said. 

The bill would grandfather in people who currently own more than one short-term rental unit. Connolly said even if the unit he hopes to build is excluded, the restrictions could have a chilling effect on people like him who are looking to invest in housing.

“It’s not great for the 25-year-old me,” he said.

Watson, the UAA economist, said the policy would indeed have negative effects for current homeowners. 

“Whether you rent your property or list your property on one of these short-term rental platforms or not, it’s likely that your home price has appreciated because of it. And so for existing homeowners, there’s a tradeoff,” said Watson.

Gray said that’s the point.

He said it’s problematic if people who can afford to build new homes are just building them as short-term rentals.

Gray doesn’t expect the bill to pass in the waning days of the legislative session, but said he hopes the bill can advance next year.

Lex Treinen

Lex Treinen is covering the state Legislature for Alaska Public Media. Reach him at ltreinen@gmail.com.

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