Bronson vetoes Assembly ordinance with new rules for Airbnbs and other short-term rentals

Mar. 20—Anchorage Mayor Dave Bronson on Wednesday vetoed an Anchorage Assembly ordinance that created a licensing program for short-term and vacation rentals, including houses, apartments and bedrooms rented via online booking platforms Airbnb and Vrbo.

The Assembly had approved the ordinance in a 7-5 vote on Tuesday night, setting out the program in city code. The ordinance added costs and potential penalties for short-term rental owners, and sought to gather data about the market.

However, Assembly members on Wednesday said they did not expect to override the veto.

Bronson in his one-page veto raised private property concerns about the measure.

"The Anchorage Assembly should not be meddling in an individual property owner's ability to make a living for themselves and their families," the veto message said. "Private property owners deserve to continue to be able to provide valuable housing offerings within the municipality on Airbnb, Vrbo, and other outlets."

"Regulating, licensing, notification requirements, taxation and fining of private property owners will further minimize options in the Anchorage housing market," the veto message said. "Homeowners have worked hard to sustain their investments over the course of many years and should be provided any opportunity to earn further income because of their hard work and home ownership."

Bronson's veto 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.

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

They were joined in approving it Tuesday by Anna Brawley, Zac Johnson, Kameron Perez-Verdia, Felix Rivera and Daniel Volland. Voting against the measure were Assembly Chair Christopher Constant and Karen Bronga, Kevin Cross, George Martinez and Scott Myers.

Zaletel and Sulte said Wednesday a veto override attempt is not expected.

"Members Zaletel and I put a lot of effort into this ordinance to fairly listen and capture the concerns and feedback of the citizens on both sides, while trying to respect the safety and property rights of owners, renters and neighbors," Sulte said in a text.

"At this time, I consider the matter dead," Sulte said. "I will not be bringing it forward and I am fine with this outcome. While I believe in my district, Girdwood, as a resort community, has a developing short-term rental issue that has an impact, the ordinance clearly does not have broad support. At the end of the day we are here to carry out the will of the people. This is not in their will."

A veto override would require eight votes.

One member who had voted for the measure on Tuesday, Volland, took a different approach on Wednesday, saying he'd been "on the fence" about it.

He requested a reconsideration of the ordinance, as allowed by Assembly code, then dropped the request after the veto essentially made it a moot point.

Volland said in an interview he was concerned that more data is needed about the short-term rental market before regulations are placed on it. He said he was not inclined to override the veto.

He made the request for reconsideration after hearing concerns from people with owner-occupied short-term rentals who thought the permitting requirements would be burdensome, he said.

"I want to make sure that we're not putting the regulation cart before the data horse," he said.

Volland said it may be possible for the Assembly to hire a contractor who can "drill down into specifics" about the market, said.

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

Some Anchorage residents who own short-term rentals had 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 would have unfairly burdened short-term rental owners, who already are required to have a business license and, like hotels, pay the city's 12% bed tax.

The ordinance did not set limits on the number of short-term rentals a person can operate, but it placed other restrictions and requirements on owners. It proposed penalties for violations, and a license fee that would have been used in part to collect data about the short-term rental market.

It included a fee: A two-year license would have cost $400 per rental unit and would have been renewable.

However, under the ordinance, all but $50 of that fee could have been waived under several circumstances, including if the short-term rental unit was part of the owner's primary residence or if the owner had rented it to an individual for more than 180 days of the preceding 12 months.

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

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

Owners also would have been 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 could have been through a rental platform.

The measure also set 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 measure would have first resulted 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.