The Homer Chamber of Commerce held a panel discussion last Wednesday, Jan. 17 at Kachemak Bay Campus to facilitate a discussion in the face of the Homer City Council’s upcoming consideration of an ordinance regulating short-term rentals.
Ordinance 23-61, introduced on Nov. 13, will amend city code Title 5 to add Chapter 5.48 Short Term Rentals in an effort to ensure short-term rentals operate in a lawful way, pay applicable fees or taxes, and do not negatively impact the quality of life for their neighbors. A public hearing will be held at the regular council meeting scheduled for Feb. 26.
Panelists at the chamber-sponsored event included Story Real Estate owner and broker Chris Story, Homer Bed and Breakfast Association president Marcia Kuszmaul and City of Homer Economic Development Manager Julie Engebretsen.
The panel was attended by 52 audience members in person and 12 over Zoom, according to chamber Marketing Director Mina Gherman.
Chamber Executive Director Brad Anderson, acting as moderator for the event, asked the panelists a series of questions to gain their perspective on the proposed ordinance, as well as the impact of short-term rentals on the Homer community.
“The chamber provides a voice for our members at all government levels, and we work to promote and advocate a healthy business environment and vibrant community for all our residents in the greater Homer area,” Anderson said in his introductions for the panel. “So this is very much part of what we see in our strategic plan to try to help get these conversations going, talk about issues that are coming in front of the city that impacts not only the business community, but also the larger community as a whole.”
To kick off the discussion, each panelist introduced themselves and their viewpoint on the subject of short-term rental regulation in Homer.
Story and Kuszmaul both expressed their preference for approaching the issue of short-term rentals in another way than a city ordinance.
“I am somebody who will never say we need more government, more regulation, more ordinances,” Story said. “I am rather opposing this — not from the standpoint of what’s contained within it, but the nature of the ordinance itself. I think there’s another way to go.”
Kuszmaul, speaking as a representative for the Homer Bed and Breakfast Association, emphasized the organization’s focus on professional ethics, including operating in compliance with regards to public safety, having a state-issued business license and paying sales tax to the borough.
“Part of our professional ethics are that we are in compliance and we operate as businesses,” she said. “We would love for everyone to be compliant, regardless of whether you’re one of our members or in the community.
“For the ordinance, we’ve operated without those requirements, and we think people can successfully do that. We think part of it is public education, helping people to know how to operate responsibly as a business in the state and in town.”
Engebretsen clarified the city’s role in Wednesday’s discussion as listening to feedback and providing answers to questions and concerns.
“The public has concerns and comments, and they talk to their elected officials about it, and the city says ‘Well, how can we be a part of the conversation, and what solutions can we provide?’ Now we’re going through a public process of people coming to meetings and telling us what you think and what your concerns are, and how we can change the ordinance,” she said.
Anderson’s first question to the panel referred to language in Ordinance 23-61 that the “council and the public are very concerned with the impacts of housing availability on seasonal workers and year-round community members.” He asked the panelists whether, from their perspective, the ordinance effectively addresses the issue of housing availability in Homer.
“We’ve had a lot of public comments on that, and the consensus is no, this ordinance does not affect housing in the sense that there’s no cap on the number of short-term rental units you can have in a neighborhood or citywide,” Engebretsen said.
Kuszmaul and Story agreed.
“I didn’t see, in reading the ordinance, that there was a direct connection between the registration and housing,” Kuszmaul said. “Now if the fees were going toward some kind of affordable housing fund, that could make a connection, but on face value I didn’t see one.”
Story said that since he didn’t see a direct connection between the short-term rentals and housing availability or affordability, the ordinance becomes an “arbitrary and capricious document.”
“Since we just said ‘No, there’s no connection,’ then why are we discussing this ordinance?” he said.
Anderson then asked the panelists whether they felt the need to regulate the short-term rental industry in Homer.
Both Kuszmaul and Story said they didn’t see the need for city-level regulation.
“I don’t think it’s necessary to have regulation,” Kuszmaul said. “But I do think there’s a need, again, for public education and for people to understand that when you open your home or property, you are in business, and that the State of Alaska has rules about that.”
Engebretsen clarified the goals of Ordinance 23-61 as proposed.
“I think there are three goals in this ordinance. One of them is that people are paying their taxes, and there’s a little bit of attention to public safety, and to nuisances,” she said. “If the issue is tax collection, there’s a lot of different ways to solve that and to address that.”
Anderson asked what, then, is the main issue that the panelists see the ordinance trying to solve.
“I think it’s trying to solve a problem that it won’t solve,” Story said. “I think it’s sparked a conversation, maybe a much-needed conversation.”
“These conversations happen over time. Sometimes when we look back at how the conversation started, we’ve all come along and evolved that conversation, and I expect that to continue,” Engebretsen said. “This is where we (currently) are with short-term rentals, whether it accomplishes a housing goal — (it) probably (does) not. We feel that it will address some of the tax collection issues. Is it the only way? Probably not.”
Kuszmaul said that she thought the most useful part of the ordinance was with regard to the tax collection.
“We should all be interested in that,” she said. “If the objective it to remedy (sales tax collection), I think that’s great, I think there are also other remedies, and that this ordinance isn’t necessarily the strongest remedy for that. Again, I’ll vote for public education and helping people get compliant.”
The panelists were then asked their opinions about the proposed fees included in the ordinance.
“I’d like to see it be low. I’d like to use our online platform so (business owners) can do all the paperwork online,” Engebretsen said.
She said that when fees cost hundreds of dollars, it creates more anxiety for business owners and more work for the city’s limited staff.
“I would like to keep it simple. It should cover some costs, but it is not a revenue generator for the city,” Engebretsen said.
Kuszmaul also agreed that if there needed to be fees, they should remain low, and that having a year to prepare for fee payment, as the ordinance currently provides for, made sense.
Anderson asked whether the panelists felt there should be a cap on the number of short-term rentals within the city. Story and Kuszmaul both stated that they didn’t see a need for a cap.
“I think something like that is way premature,” Kuszmaul said. “There is a connection (between short-term rentals and housing availability and affordability) though, but I don’t know that we fully understand it.”
Engebretsen said that she didn’t see the city being anywhere near considering a cap.
“I think that’s a whole different conversation,” she said. “I think the public would have to be asking for that in order for the city to go down that road.”
The full panel discussion recording is available online at www.homeralaska.org/chamber/chamber-discussions/.