Anchorage Assembly approves new rules for Airbnbs and other short-term rentals

Mar. 20—Anchorage will move ahead with a licensing program for short-term and vacation rentals, including houses, apartments and bedrooms rented via online booking platforms Airbnb and Vrbo.

In an 7-5 vote Tuesday, the Assembly approved an ordinance that sets out the program in city code. Assembly Chair Christopher Constant and members Karen Bronga, Kevin Cross, George Martinez and Scott Myers voted against the measure.

Its passage comes as the municipality grapples with a housing shortage, sharply rising rents and home prices, and a dearth of affordable and low-income housing. Many residents and city leaders have raised concerns about short-term rentals contributing to the housing shortage, especially in the Girdwood area.

But it's not clear exactly what the scope of the problem is — and vacation rentals have also become an important piece of the city's tourism industry.

Some Anchorage residents who own short-term rentals testified against the measure, saying they rely on the income, especially as they face the rising cost of living. Assembly members opposing it said it will unfairly burden short-term rental owners, who already are required to have a business license and, like hotels, pay the city's 12% bed tax.

The sponsors of the measure — Assembly Vice Chair Meg Zaletel and member Randy Sulte — have said they proposed the permitting program to collect information on the impact of short-term rentals on Anchorage's housing supply. It would also help ensure the units are safe and well-managed, they said.

Many other U.S. cities have instituted short-term rental licensing and enforcement of health and safety rules.

The program will be overseen by the municipal clerk, but it's not clear yet when the license requirement will go into effect. It can't go into effect until 180 days have passed, and the clerk has 120 days to publish the effective date of the program for the public.

A short-term rental is a living unit rented to any person for less than 30 consecutive days, according to the measure.

Tuesday's measure won't impose limits on the number of short-term rentals a person can operate, but it places other restrictions and requirements on owners.

That includes a fee: A two-year license will cost $400 per rental unit and would be renewable.

However, all but $50 of that fee can be waived under several circumstances: If the short-term rental unit is part of the owner's primary residence, if the owner resides on the same property or an immediately adjacent property, or if the owner has rented it to an individual for more than 180 days of the preceding 12 months.

That provision is meant to encourage people to put short-term units back into the long-term rental market, according to the sponsors.

The city will also waive fees for active-duty military members permanently stationed in the municipality but called to temporary duty elsewhere.

The fees will only go to pay for the cost of running the licensing program, Sulte and Zaletel have stressed. The clerk will be able to suggest fee adjustments to the Assembly.

Owners would be required to have a minimum property liability insurance of $500,000 or the amount that's required of a bed and breakfast of a similar size, whichever is less. That insurance can be through a rental platform.

Short-term rental owners will also be required to give the city a 24-hour contact or a "responsible manager" residing in the municipality who could be reached in an emergency and be physically present at the rental, or direct another person there to respond. Owners could also appoint an alternate to respond when the manager is out of town. The owner, manager or alternate would also need to be available on a daily basis to "reasonably respond" to any issues or complaints within an hour.

Other regulations include requiring smoke detectors, carbon monoxide detectors, fire extinguishers and disposal of trash in accordance with city code.

A few other regulations that Sulte and Zaletel included in their original proposal last year were not included in the final ordinance.

It doesn't set a maximum overnight capacity of two adults per bedroom, plus two per unit, and only two adults per studio unit. It also doesn't put explicit limits on what structures can be used for short-term rentals or ban using recreational vehicles as a rental unit.

However, the measure requires sleeping quarters to meet city code standards for rooming units, and for rental units to comply with all applicable land use, zoning and building codes.

If the owner violates conditions of the license approval or the rules in the measure without taking reasonable steps to correct the problem, the clerk can recommend the Assembly suspend a license for 30 days or revoke a license.

The ordinance sets out a fine schedule of $300 per night for operating a short-term rental without a license, $300 for an advertising violation, and $75 for an owner or manager failing to respond to complaints or concerns. Violations of other parts of the ordinance would first result in a warning, then $100 for a second offense and $300 for further offenses.

Cities facing housing crises in the Lower 48 and in other countries have imposed more restrictive programs and laws to control rapidly growing short-term rental markets.

Some have limited the number of units a person or company can own and rent out for short-term use. Others have set rules on the total number of vacation rentals allowed in an area, have implemented new taxes or have banned them altogether.