Sitka ordinance requires short-term rentals to be primary residences

A new law in Sitka, Alaska, will require owners to live in a property at least half the year in order to get a license to operate as a short-term rental in the city. The measure is a response to concerns about the effect of vacation rentals on Sitka’s tight housing market, with the aim of discouraging short-term rental operators from outside the community.

The number of permitted short-term rentals in Sitka has almost doubled since 2017. The Alaska Department of Labor has named Sitka as the city with the second-highest number of vacation rentals in the state as well as the city with the highest vacancy rate for long-term rentals in Alaska.

Under the new ordinance, short-term rentals are defined as any property rented for fewer than 30 days. Units that can be used as a short-term rental on an owner’s property include single-family homes, mobile or manufactured home, or non-owner-occupied units within a two-family or multi-family unit.

Hosts must live in a property for at least 180 days a year — proven by documents such as motor vehicle or voting registration — in order to rent it out for short terms. Short-term rental permits do not transfer to new owners and expire once a property changes hands or the owner ceases to live there at least half the year.

Short-term rentals that were operating legally before the new law went into effect on September 14 can continue to do business, as long as they stay current on all taxes and other fees.

The new requirements are in addition to previous rules that required operators to get a conditional use permit from the city planning commission for short-term rentals in residential zones. At the time of permit approval, the planning commission may require a mandatory review period and may specify how long the permit will be valid.

Sitka vacation rental hosts must also register with the Sitka Tax Office, collect the city’s sales tax and transient room tax from guests, and remit the taxes to tax authorities. While short-term rental marketplaces such as Airbnb and Vrbo collect taxes from guests at the time of booking in other Alaska cities, they do not do so in Sitka. Hosts there are responsible for all tax compliance.

Short-term rentals have been a hot topic in Alaska amid the housing crunch in several cities. This summer, Juneau took the step of hiring a third-party company to collect data about short-term rentals to better gauge their impact on the local housing market. The local government has also considered an ordinance requiring short-term rental hosts to register with the city.

MyLodgeTax can help short-term rental hosts automate lodging tax to streamline and simplify their lodging tax compliance. For more on lodging taxes in Alaska, see our state Lodging Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.