A small group of concerned community members high-fived each other in the Homer City Hall parking lot Tuesday night after the Economic Development Advisory Commission meeting on short-term rental regulations. 

Earlier that evening, most of a dozen attendees urged the commission to recommend policy ideas to the Homer City Council to “keep residential neighborhoods residential.” Residents have raised concerns for years about short-term rentals like Airbnbs or VRBOs, specifically those that are not owner-occupied, operating in neighborhoods and causing safety concerns and disruptions.

Recently, a petition organized by the Kachemak Bay Conservation Society to limit STRs in residential zones received more than 400 signatures. 

“A short-term rental on property that is not the operator’s primary residence is strictly a commercial use. It’s not a residence,” Homer resident Kathy Carssow said. “If you have a commercial use next door, you don’t have a neighbor. If you don’t have a neighbor, you don’t have a neighborhood.”

By the end of a three-hour meeting, the EDC had settled on three possible approaches for the council to consider: 

• Allow short-term rentals only on the premises of the operator’s primary, permanent residence in residential districts, to include rural residential, urban residential, neighborhood flex and residential office.
• Establish a low-cost registration process for STRs, with fees to cover administrative expenses.
• Disallow grandfathered STR properties from continuing non-conforming use immediately upon transfer of ownership.
  

By restricting STRs in residential zones to properties on which operators maintain their home, the EDC aims to preserve neighborhood quality and protect homeowners from what one community supporter called “backdoor commercial zoning.”

Homer City Code already requires some lodging businesses like bed-and-breakfasts to be owner-occupied. Commissioner Christine Zubeck suggested the move would level the playing field for lodging accommodations.

This measure would not apply to STRs in commercial zones.

Commissioners discussed requiring STR registration, paired with a fee schedule, as a tool for data collection, business license and sales-tax compliance, and enforcing regulations and safety requirements. This measure would apply to STRs in all zones within city limits.

Revisions to existing nonconformity code would pair with the residency requirements for whole-house STRs in neighborhoods. Homer City Code 21.61 says that previously lawful lots, structures or uses that no longer conform with the zoning code may continue when regulations change, subject to code provisions that deal specifically with nonconformities. 

Under current city code, when a lot or structure with a nonconforming use is sold, the new owner holds the right to continue that use within 24 months of the transfer of ownership. Community Development Director Julie Engebretsen used Sunny’s Services, a longtime auto repair shop on Pioneer Avenue, as an example: If the buyer had wanted to continue the auto repair business within two years of purchase, they would have had the right to do so. However, since the 24-month period has passed, that right no longer rides with the property.

The EDC’s proposal to close that loophole is an addition to city code that would disallow continued operation after change in ownership of STRs in residential zones whose operator does not live on-site.

“The mechanics for that are harder,” Engebretsen said.

While no statewide STR regulations exist, the ideas that Homer is discussing are not new. Several Alaska municipalities have implemented measures to mitigate short-term rentals and continue to evaluate regulations as needs evolve. Regulatory programs are categorized as light (no limits on zoning, number of rental nights or total number of permits; no life safety inspections requirement; no owner-occupancy requirement), moderate (no cap on the number of permits, moderate zoning district limitations, life safety inspections required), or robust (limits on the total number of permits and the number of rental nights, strong zoning district limitations, owner-occupancy requirements).

Seward, Anchorage and Sitka all require annual permits for STR operators and have enacted accompanying fees. Seward and Sitka both require owner-occupancy for STRs in residential zones. Seward has also implemented zoning restrictions banning STRs from the Seward Boat Harbor. Anchorage does not currently have an owner-occupancy requirement, but the city does require operators to have liability insurance and provide an on-call contact who can respond to issues within 24 hours.

Years-long talks about short-term rental regulations also revolve around the availability and affordability of housing in the Homer area. 

Via a resolution passed in April that acknowledged STRs as “one of several factors that may influence” long-term and seasonal housing availability, as well as seasonal workforce needs and the economy, the Homer City Council directed the EDC to review data and gather community input on short-term rentals and report back with its findings and recommendations. 

STR regulation is also featured in the ongoing Title 21 zoning and planning code update, but project leaders elected to hold off on finalizing that section of the code until the EDC finishes its work and the city council provides further direction. 

Engebretsen said she expected the council to roll final STR regulations into the Title 21 rewrite rather than attempt to pass them as a separate ordinance. 

The EDC will continue discussing STR-related topics at its next meeting on Oct. 13 and is expected, per Resolution 26-028(A), to report back to the city council by Oct. 15.

Engebretsen said she didn’t know if the commission would make additional recommendations next month, but commissioners named certain topics, including STR caps and moratoriums, that “feels like a loose end they’d like to talk about a little bit more.” 

Find the full recording of Tuesday’s EDC meeting on the City of Homer website.