City Hall played host to a number of hotel owners on April 19 as the Borough Assembly deliberated on an ordinance regulating vacation rentals in the municipality.

The ordinance states the Planning & Zoning Commission “recognizes that the proliferation of vacation rentals such as those managed by AirBnB and VRBO have a negative effect on the availability of seasonal housing for persons working in the tourism industry within the Municipality,” and that the demand for seasonal housing in Skagway far exceeds its supply, “thereby negatively affecting the primary economy of Skagway – the tourism industry – and as such a seasonal housing crisis exists.”

As currently written, the ordinance would allow vacation rentals by conditional use permit (CUP) in all use districts. It would also cap the number of CUPs issued for vacation rentals at 25 for rentals not also occupied by the property owner. It also clarifies who gets charged the eight percent hotel room tax, adding vacation rentals to that list.

When interviewed several days after the assembly meeting, Joanne Korsmo – who operates a vacation rental four months out of the year – said she feels vacation rentals are getting cast in a negative light, and that housing has been an issue since she arrived in town in the 80s.

“We’re not negatively impacting [housing], and we’re not the reason that there is a housing shortage in Skagway,” Korsmo said. “At least not today.”

Korsmo said she has another home that she rents out year-round, and that she turned her primary home into her vacation rental. Of the two, she said a year-round rental takes much less effort to lease out, though the vacation rental is more lucrative.

A number of hotel owners commented at the April 19 assembly meeting on the topic of vacation rentals. The first of these was Kathy Hosford, operator of the Chilkoot Trail Outpost, who spoke against adopting the ordinance.

“Before Air B&B got started, we didn’t really have a lot of shortages, on a few nights that would happen,” Hosford said. “So a couple of them kind of helped, but the six [vacation rentals] that were advertised last year I know adversely affected my business, and I believe if affected a few other local businesses that have gone through the entire process to open up night rooms.”

Hosford and Chris Valentine, owner of Sergeant Preston’s Lodge, said the vacation rentals should have to use the same toolbox as hotels, and follow the same restrictions and requirements. Valentine said there would be consequences for his business if the ordinance were passed as-is.

“I’ve seen AirBnB coming my way for years, I knew it was going to hit, and that’s fine,” Valentine. “But they have to be on the same page as us, they have to go through all the same hoops as we do.”

Following the publics comments and at the head of the assembly’s discussion on the ordinance, Assembly Member Orion Hanson said “by no means is this [ordinance] a final product.” However, he added that hate it or love it, a lot of work had gone into the ordinance.

“It’s not flippant,” Hanson said.

Assembly Member Tim Cochran said he would like to see a cap of 10 allowed CUPs at the most, and that the hotel owners who’d spoken had “valid” points.

Assembly Member David Brena asked the municipal Permitting Official Shane Rupprecht if the ordinance would cause a dramatic increase in vacation rentals.

“I think if we were going to see a big proliferation, it would have already taken place, because the market is there without restrictions at this point,” Rupprecht replied.

Brena said in a general sense, he doesn’t think the municipality should put numbers and limits on business, and that the market should regulate itself, but added that he agreed vacation rentals and hotels should be operating on the same playing field.

Korsmo said she pays the municipality’s eight percent hotel tax, and had increased her home insurance to cover the vacation rental guests.

Additionally, Korsmo said there aren’t that many vacation rentals in town – though there may be more people interested in the business.

“The fear of what could happen I think is driving the bus over what’s actually happening,” Korsmo said.

The ordinance was postponed with a 6-0 motion at the April 19 meeting, until the Planning & Zoning Commission gets another chance to review it.