Homer City Council rejects attempt to regulate short-term rentals

Homer City Hall
Homer City Hall (From City of Homer)

Short-term rentals play a significant role in Homer and in towns across Alaska, from being a viable small business to shaping the face of residential neighborhoods. The Homer City Council unanimously rejected an ordinance that would require short-term rental operators to register their property at Monday night’s meeting.

Council members Donna Aderhold and Jason Davis sponsored the ordinance last November. The ordinance affects short-term rentals, which are properties people can stay at for 30 days or less. These rentals are mainly posted on sites like AirBnB and VRBO as vacation rentals.

Homer isn’t alone in addressing short-term rentals in the state. Sitka passed tight restrictions on rentals in 2022. The Anchorage Assembly has also considered license requirements for short-term rentals since October.

The original Homer ordinance required owners to register every short-term rental they owned. This included an annual fee, proving they are up to date with paying sales tax to the borough, and completing a safety inspection.

Homer Economic Development Manager Julie Engebretsen said the ordinance would not affect housing availability.

“The ordinance doesn’t really affect that,” she said, “it doesn’t limit the number of short-term rentals in the entire city or in a neighborhood so it doesn’t move the needle on housing.”

After introducing the ordinance in November, the council referred it to the city’s planning commission and economic development advisory commission, or EDAC.

In the following months, the EDAC held work sessions to get feedback from the public, many of whom were business owners and residents concerned about the impact of short-term rentals on neighborhoods.

Many residents were concerned about the “whereas statements” for the ordinance. These statements are placed at the beginning of ordinances to lay out the background and reasoning for changing city code.

Numerous written and verbal comments from the commission meetings stated the original section claiming short-term rentals affected housing availability had no factual basis.

Written comment from rental property owner Dorothy Duncan stated more needed to be done beyond whereas statements.

“The City has a lot of work to do to connect the dots about how this proposed ordinance relates to improving housing availability in Homer, besides just a loose mention of it in a Whereas clause or two,” she wrote.

Some comments raised concerns that regulation would hurt business owners, while others called for clearer definitions of terms used in the ordinance.

From the public and commission’s comments, city staff worked to create a substitute ordinance. This ordinance did away with the more controversial whereas statements and made the permits based off of lots instead of individual units. It also changed certain limits to align with state regulations for bed and breakfasts and made permits last for two years.

However, both commissions recommended taking the ordinance “back to the drawing board,” as it raised many underlying issues around housing that should be considered.

During Monday night’s city council meeting, residents reiterated their concerns, including Homer Bed and Breakfast Association president Marcia Kuszmaul. She said a lot is still not known about short-term rentals impacting Homer’s community.

“We believe the ordinance is premature for lack of better understanding of the vision and the role of short-term rentals in the community,” she said, “we also would like whatever regulations come that they reflect, and are consistent with the state regulations.”

Other residents like Kathy Carssow raised concerns about the impact of short-term rentals on local neighborhoods if specific definitions and regulations are not in place.

“If we have businesses next door that are commercial, and they are the hospitality industry, they’re not neighbors,” she said “they’re a business and I think that that is hurting the integrity, that would hurt the integrity of our neighborhoods.”

Aderhold says this system would help to gather more information about the impact of short-term rentals in the city, as a previous attempt last year failed to provide the necessary data. But that intention got lost as commissions deliberated on the ordinance with the public.

“This ordinance is just to understand what the landscape is related to short-term rentals,” she said. “And, you know, it was never intended to be a negative thing. It wasn’t intended to put people out of business or to say short-term rentals are bad. None of that.”

However, other council members felt uncomfortable with the ordinance, as it raised many different issues. Council member Rachel Lord says more work still needs to be done to look into the housing issues.

“Even though I think that was really good intention, I think that it might be not the best use of city regulatory resources at this point,” she said.

The city recommended postponing the ordinance to a later meeting. This would allow the city attorney to review the ordinance. The council decided against that before unanimously rejecting the ordinance.

The city will continue to look at housing issues, especially as it continues work with Anchorage-based consulting group Agnew::Beck and the public to rewrite its comprehensive plan.

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