For the time being, the free market will remain the only regulator of vacation rentals in Skagway.

An ordinance that would have brought some governance over vacation rentals was voted down by the Borough Assembly at its May 17 meeting.

The ordinance had writing to require non-owner occupied vacation rentals to get a conditional use permit (CUP), and would have limited the number of those CUPs issued. It also would have put into municipal code that vacation rentals – as well as hotels and motels – must pay the eight percent bed tax.

In a letter sent to the assembly before the meeting, resident Denise Caposey wrote about the tone of the ordinance, saying the wording is “harsh and negates any contribution that such a host business [vacation rentals] might bring to Skagway.”

“Please consider how these regulations you are proposing affect a small business woman like myself; a law abiding, tax paying citizen of this town, who would like to offer my newly remodeled historic home to families and friends for overnights and extended stays,” Caposey wrote. “This small business venture is how I plan to supplement my retirement: by renting my historic home on a nightly basis.”

The last time the assembly discussed the matter, it heard from a number of Skagway’s hotel owners. They raised issues regarding vacation rentals; some said they wanted the vacation rentals to compete at the same level as hotels, and others made comments about the effect websites like and may have on their businesses.

At the May 17 meeting, Assembly Member Tim Cochran said he agreed with the hotel owners about making an even playing field.

“I hate to see any government regulate private property, but when you take private property as a commercial entity – and even if the state doesn’t recognize a bed and breakfast as a commercial entity – you’re changing that from private property to a business,” Cochran said.

Assembly Member Orion Hanson called the discussion “fairly polarized.”

“We can vote on this, we could approve it, disapprove it, or we do nothing and it’s still going on,” Hanson said.

He added that if the ordinance were not approved, it wouldn’t stop people from running vacation rentals on their property.
“This [ordinance] is trying to give a definition of what a VRBO is acceptable to be in Skagway,” Hanson said.

The differences between the two types of vacation rentals – owner occupied and non-owner occupied – drew comments from the assembly. Hanson said he had concerns about non-owner occupied rentals, and that he could see where a lot of real estate could be bought up to serve that purpose.

“We have a great stress in our town on housing and we’re trying to think outside the box all the time how to alleviate that and make it better, but we’re very restricted by the topography we have in Skagway,” Hanson said.

Assembly Member Dan Henry said he struggles to see the specific connection between the seasonal housing issues and vacation rentals.

“Again I still see the seasonal housing aspect, that issue, that crisis – however you want to frame it – as being an issue for the employer,” Henry said. Henry also said he wasn’t a big fan of the non-owner occupied rentals, as opposed to owner occupied.

“I see that as not a good thing, that can go sideways in too many ways,” Henry said.

While Assembly Member David Brena said some of the ordinance’s regulations would be a step in the right direction, he wasn’t sure about the idea of placing a limit on the amount of non-owner occupied vacation rentals allowed.

“Because as soon as that number is satisfied, then the demand outstrips the supply and prices will start to go up,” Brena said. “It just creates an artificial non-market.

“You know, these things [vacation rentals] are actively managed. There’s a fair amount of labor, you have to come in and make them up and see that everything is refreshed, it’s the equivalent of running a B&B. I don’t think they’re so profitable that there’s going to be a bunch of people that are going to rush to this in such a way that it’s going to affect seasonal housing.”

Mayor Monica Carlson said the option of doing nothing was not an option.

“I don’t want to end up like Homer, [Alaska], and I don’t want to end up like a lot of other seasonal communities where it’s exploded and there’s just nothing available,” Carlson said.

The final roll call on the ordinance’s first reading failed 1-5 as well, with Brena for.

“I guess I’m extremely disappointed about the air B&B vote tonight at the table, I think it’s an issue that is going to create some issues in town, and then as they grow and as visitation grows in many different aspects besides the cruise industry we’re going to be dealing with it,” Carlson said at the end of the meeting.