One person could own a temporary rental unit in Alaska and would need to register the unit with the state as per an House bill that was introduced earlier this month.
The bill, which is sponsored by Anchorage Democratic Rep. Andrew Gray is designed to increase the supply of housing options in Alaska by limiting the rise in short-term rentals such as AirBnBs.
“If we’re looking to expand the number of homes available in the quickest time possible I’m not convinced there’s a better way to do that,” said Gray.
The rental of short-term homes has exploded across Alaska during the last few years. In Anchorage between the year 2019 and 2022, the total number of units increased by 70%, reaching 2,100 units, as per AirDNA, an independent organization that monitors the rental market for short-term leases.
It means there are less homes available for rent Gray said. Gray.
“Although nobody can estimate the extent to which the short-term rental market is responsible for the scarcity of housing, based on the trends we’ve seen in other statesI don’t believe that Alaska is an one-off,” he said.
AirBnBs are also very popular in many other areas that aren’t in Anchorage which includes those in the Southeast as well as on the Kenai Peninsula.
Gray’s bill is among the only bills in the Legislature this session that deals with housing.
The implications of the bill, should it becomes law, are not yet clear.
There’s a lack of research on the effects on registration and licensing requirements. A study that hasn’t been peer-reviewed discovered that requiring owners to sign up can cut down on the amount of short-term rentals available in certain cities by more than 30%..
Andrew Bibler, the study’s principal author and economist at the University of Nevada, Las Vegas He cautioned that the study is still in progress and it’s still too early to draw any definitive conclusions regarding the impact of these policies across the entire country. Many of the people who utilize AirBnB aren’t wealthy and rely on the platform to supplement their incomes through renting out rooms. He added that research is ongoing into the issue of whether or not having to register can raise the rates of foreclosure. The evidence so far isn’t conclusive.
He noted that one trend that’s evident is that having more restrictionssuch as ownership limitscan have a greater impact on the amount of AirBnBs rather than simply needing registration.
“It appears that the rules that enforce strict rules are having some effect and can reduce the size of the market but this is particularly true in areas where the rules are stringent and there’s a fairly large market,” he said.
A number of studies have proven that decreasing market size AirBnB markets is associated with lower rents for long-term and home rentals.
“I am expecting the same effect in this case,” said Brett Watson who is economist with the University of Alaska Anchorage Institute for Social and Economic Research.
There’s some opposition against the bill, specifically restricting how many short-term rental properties a owner can register to only one. AirBnB does not share data about the number of people who rent more than one property.
The Anchorage resident Joe Connoly is among those who think that the limit is a concern. He owns an AirBnB close to his home in the upper Hillside that he is hoping his elderly parents will move into within 10 years. He’s planning on building another unit to let as an addition dwelling, commonly known as a mother-in law apartment to boost his income. He claimed that he and wife are self-employed and earn a an average income, and prefers to invest in housing rather than the market.
“We aren’t earning any money until the age of 70 if we had a long-term lease. If we took an short-term lease, we could be able to pay it off within a few decades,” he said.
The bill would allow those who own more than one rental unit for short-term rentals. Connolly added that even if the home which he wants to build is not allowed, the rules could result in a stifling effect on those who are planning for ways to make a profit on housing.
“It’s not ideal for I’m 25 years old,” he said.
Watson Watson, who is the UAA economist, has said that the policy could affect homeowners currently living in the area.
“Whether you lease your home or put your property up through one of these platforms for short-term rentals or not, you’re likely that the value of your home has risen because of it. For homeowners who are already home there’s a tradeoff to be made,” Watson added. Watson.
Gray stated that’s the reason.
He said it’s a problem if those who have the money to build houses are only making them short-term rentals.
Gray does not expect the bill to pass during the last hours of legislative sessions however, he said he’d like to see that the bill will be able to move forward next year.
