Housing crisis in Ketchikan could cost community a generation, planning director says
Ketchikan’s elected leaders must decide what future they want for the community. It was a message delivered Monday to the Ketchikan Gateway Borough Assembly by Planning Director Richard Harney.
“What do we want to export out of this community?” He asked. “Do we just want to export the memories and experiences of visitors who come here? And that’s fine, if that’s what we want to do. But if that is our primary focus, the visitor industry, we will also export our children.
The remarks came during a discussion about short-term rentals in Ketchikan and their impact on the housing shortage in the community.
A national study in 2020 found that the increase in the number of units listed on the Airbnb short-term rental service corresponded to increases in rents and housing prices. A separate study in Los Angeles found that short-term rental services like Airbnb and VRBO distort the housing market by removing long-term rentals from the market and displacing residents from affordable housing.
The specific impact of short-term rentals on Ketchikan’s housing market is unclear, though Harney said the problem is particularly pronounced in communities that serve as tourist destinations.
But one thing is clear: housing is hard to find and expensive in Ketchikan. And Harney said because of that, only one of her five children could stay.
“I know at least one assemblyman, two assemblymen – their children no longer live in this community,” he said. “They can’t afford to live here. They can’t afford to work here.
The Borough of Ketchikan Gateway does not have firm data on the number of short-term rentals in the community. But Harney said based on rough estimates from various sources, it’s likely about 250 of Ketchikan’s homes are listed as vacation rentals during the summer tourist season. And Harney said he couldn’t blame people for taking advantage of the opportunity.
He used his own home as an example. Citing data from short-term rental analytics site AirDNA, Harney said he could earn around $20,000 a year renting out his family home through a service like Airbnb or VRBO.
“What this tells me is that I should move to another community and I should rent my house as a VRBO who will pay my mortgage on that property as well as the mortgage or at least part of the mortgage elsewhere,” he said. “As a member of the community, that bothers me.”
He called on the assembly to take concrete steps to assess the impact of short-term rentals on Ketchikan’s economy.
And he offered a few options. The borough could pay a consultant to study the problem or try to collect the data itself. The assembly proposed a measure last month that would require owners of short-term rental properties to register for a free permit with the borough.
But Harney said an amendment included in the measure that would require homeowners to register just once instead of every year would hamper the effort.
“It defeats the whole purpose,” he said. “Because we can’t track it from year to year, we can’t see where the numbers go up or down, or where they are, where they’re moved, whether or not someone stops to have a, starts a that sort of thing. If it’s a one-time thing, it’s a snapshot in time.
As a third option, Harney said the Alaska Municipal League was “actively pursuing” a contract with a software company to track vacation rentals in the state to ensure they paid taxes.
“So they’ll go through Airbnb, VRBO and all these other websites that are out there, and they’ll search for it, and then they’ll actively let us know who or the community knows who operates VRBO or a short-term rental,” he said.
Housing is increasingly an issue for businesses in Southeast Alaska – the economic development group The Southeastern Conference identified it as a major problem hamper business growth in a recent report.
Assembly Member Jaimie Palmer works in the tourism industry. She highlighted the impacts of the housing crisis on the business environment.
“The regional issue around this is huge, because we can’t have a robust tourism industry if we can’t house the workers,” she said. “It’s a double-edged sword. Everyone wants to have this robust industry, but where do we put them?
But members of the assembly did not seem to express a consensus on the best way forward.
Assemblyman Judith McQuerry said she would like to see the borough more aggressively pursue unscrupulous landlords who don’t pay hotel or sales taxes on their properties.
“I think it’s incumbent on us to crack down on the cheaters and make life as easy as possible for the good guys,” she said.
Assemblyman Jeremy Bynum said he would not support any measures imposing fees or penalties on owners of short-term rentals who follow the borough’s code.
“We don’t want to interfere with…private property, in my view,” he said. “Plus, these provide housing for the industries we want.”
He said the borough should focus the “majority of (its) efforts” on opening up land for housing development.
Assemblyman Grant EchoHawk backed the Planning Department’s search for more data, saying it was important to explore all available avenues to get more homes on the market.
“There are a lot of moving parts here. This is only a part. So what I don’t want us to do is… in any way ignore this conversation and just say, well, when we have to focus on these other things,” he said. declared. “We also have to focus on these other things – plus this.”
He also suggested changing the borough’s zoning code to encourage more housing development.
The Ketchikan Borough Assembly is due to consider a package of reforms Monday to address the short-term rental market. But borough officials are encouraging the assembly to reject the package and wait for its annual policy meeting in January to discuss the issue in more detail.