The elected leaders of Ketchikan need to decide the future for their community. Richard Harney, Planning Director, delivered this message to the Ketchikan Gatewayborough Assembly on Monday.
He asked, “What are we trying to export from this community?” Do we want to export the memories, the experiences, of those who visit here?” If that’s all we want, that’s okay. If that’s our primary focus, the visitor industry is what we want, then we will also be exporting our children.”
These remarks were made during a discussion about short-term rentals in Ketchikan, and their impact on the local housing shortage.
In 2020, a nationwide study found that an increase in units on short-term rental site Airbnb was associated with higher rents and higher home prices. Another study was done in Los Angeles and found that short-term rental companies like Airbnb and VRBO distort housing markets by taking long-term rentals from the market and displace residents of affordable homes.
Although Harney did not say what the exact impact of short-term rentals is on Ketchikan’s housing market, Harney stated that it is particularly severe in tourist areas.
One thing is certain: Ketchikan housing is difficult to find and costly. Harney stated that only one of his five children may stay because of this.
He said, “I know at most one assembly member, and two assembly members — their kids are no longer living here.” They can’t afford to stay here. They don’t have the money to work here.
The Ketchikan Gateway Borough does not have any data regarding the number of short-term rentals within the community. Harney stated that it is likely that 250 homes in Ketchikan are listed as vacation rentals during summer tourism season based on back-of the-envelope estimates. Harney stated that he doesn’t blame anyone for taking advantage.
Harney used his home as an example. Harney cited data from AirDNA to show that he could rent out his family’s home via a service such as Airbnb or VRBO for $20,000 per year.
He said, “This is telling me that I should move into another community and rent my house to a VRBO that will pay my mortgage and/or a portion thereof somewhere else.” That bothers me as a community member.
He urged the assembly to take concrete actions to evaluate the economic impact of short-term rental on Ketchikan’s economies.
He offered several options. The borough could hire a consultant to analyze the problem or collect the data themselves. Last month, the assembly approved a bill that would require owners who own short-term rental properties in order to receive a permit from the borough.
Harney stated that an amendment to the measure that required owners to register once and not every year would hinder the effort.
He said, “It kinda defeats the whole purpose.” “Because it’s not possible to track it year-to-year, we can’t see the increase or decrease in numbers, or where they are located. We can’t even see if they’re being moved, whether someone stops having one or starts one. It’s only a once-in-a-lifetime event.
Harney stated that the Alaska Municipal League was actively seeking a contract with a company to track vacation rentals in the state to make sure they are paying taxes.
He said that they would search Airbnb, VRBO, and other websites to find it. They will then let the community or the community know who is operating VRBO or a short term rental.
Southeast Alaska’s housing crisis is a growing problem. The economic development group Southeast conference identified it as a major issue limiting business growth in a recent study.
Jaimie Palmer, Assembly member works in the tourism sector. She spoke out about the negative effects of the housing crisis on the business environment.
She stated that “the regional issue surrounding that is immense because we cannot have a strong tourism industry if it can’t house workers.” It’s a double-edged sword. Everyone wants a strong industry. But where can we put them?
However, assembly members did not appear to reach a consensus on the best way forward.
Judith McQuerry, an Assembly member, stated that she would like to see the borough pursue unscrupulous owners who do not pay sales or hotel taxes on their properties.
She stated, “I believe it is in our best interests to crack down upon cheaters and make it as easy for the good guys as possible.”
Jeremy Bynum, an Assembly member, stated that he will not support any measures that impose penalties or fees on short-term renters who abide by the borough code.
He stated, “We don’t want to interfere… with private property ownership. In my opinion.” “Also these are providing housing to industries that we want.”
He stated that the borough should concentrate the “majority (of) its efforts” on land opening for housing development.
Grant EchoHawk, an Assembly member, supported the Planning Department in obtaining more data. He stated that it was important to explore all avenues available to obtain more housing.
“There are many moving parts. This is only one section. He said that we shouldn’t in any way discount the conversation and say “Well, while these other things are important, I don’t want to.” “We must also focus on these other things — plus this.”
He suggested that the borough’s code of zoning be changed to encourage housing development.
On Monday, Ketchikan’s Borough Assembly will consider a package reforms that address the short-term rental industry. Officials from the borough encourage the assembly to reject the package and to wait until January’s annual policy meeting to address the issue more in detail.
