By SHANNON HAUGLAND
Sentinel Staff Writer
Sitka saw its number of listed short-term rentals increased by 68 percent from 2021 to 2022, a consultant told a Sitka audience on Thursday.
Taylor Holman, an economist for the McKinley Research Group, added that in the first quarter of this year there was a 78 percent increase in STRs, compared to the same quarter in 2022.
Taylor Holman (Sentinel Photo)
Holman spoke at “The State of the Sitka Economy” program sponsored by the Sitka Economic Development Association. An audience of about 50 gathered at Harrigan Centennial Hall to hear information about Sitka’s rental costs, population decline, the rise in the elderly population, the town’s recovery after the pandemic peak, and the health and contributions of various economic sectors in the community.
SEDA Director Garry White asked Holman to spend some time reviewing data related to housing in Sitka.
Holman said the number of STRs listed under the two main websites Airbnb and Vrbo went from 56 average units in 2018 to 78 the following year, a 39 percent increase.
After a decline during the pandemic, where 64 and 55 units were listed in 2020 and 2021, respectively, the sector bounced up again to 93 units listed in 2022, an increase of 68 percent in one year.
The number of listed rentals is usually highest in the second and third quarters, because of the seasonal nature of the short-term rental market.
Figures on the last quarter of 2022 and first quarter of 2023 show the number of short-term rentals at the highest levels for those quarters compared to the same quarters in other years. In the January to March quarter of this year there was a 78 percent increase in listed short-term rentals here, Holman said. In this normally quiet quarter there were 87 units listed, just below the 2022 average of 93 for that whole year.
“You’re likely to see another increase in your seasonal rentals,” Holman said, referring to the second and third quarters, April through September, that are still ahead.
The average price of a short-term rental has gone up 27 percent since 2018, to $267 a night, but Holman said the price varies for what a “unit” is since it could be a room, or a house for several people.
The information she cited didn’t include data from other websites, such as craigslist or Facebook marketplace.
Holman said another significant statistic is that Sitka for the last three years has had the highest adjusted monthly rental rate among the 10 boroughs that the Alaska Housing Finance Corporation surveyed. The data goes from 2013 to 2022, the last full year available.
The adjusted rent includes other costs, such as heating and utilities.
The adjusted monthly rental rate in Sitka was $1,092 in 2013, below Alaska’s $1,119. Both rose over the decade to $1,349 for Sitka, and $1,276 statewide, Holman said.
Adjusted for inflation, Alaska’s monthly rental rate is $75 per month less than 10 years ago, and Sitka’s is up by $30, she said.
Some of Holman’s slides showed no change in trends over the past few years: population continues to decline and a greater proportion of residents are over 65. The population declined from over 9,000 in 1992 to 8,350 in 2022. From 2021 to 2022, Sitka lost 78 people. The general trend over the last five years is that the majority of people (74 percent) leaving Sitka are moving out of the state. Smaller percentages are going to Juneau (7 percent) or Anchorage (6 percent).
Population trends show a 34 percent increase in the number of residents who are 65 and older in 10 years: from 1,192 in 2013 to 1,592 in 2022. The working age population declined by 13 percent to 4,901, and the number of those 19 and under went down by 18 percent for the same period, to 2,257.
Another trend is a decline in the last year in the proportion of the workforce that are Sitka residents. That is consistent with the rest of the state, following peak pandemic years, Holman said. In 2021, 57 percent of the workforce here were Sitka residents, down from 62 percent in 2020.
Sitka showed a faster recovery after the pandemic than some other communities, but employment levels are still 3 percent lower than in 2019, Holman said.
The seafood industry showed improvements after the pandemic, Holman reported. The value of landings was $73 million in 2021, up from $33 million in 2020. The highest year in the past decade was 2013, when 126 million pounds were landed, with an estimated value of $84 million.
The cruise visitor industry is on the rise with 557,000 passengers expected this year, a jump of 47 percent from the 379,300 last year.
One slide briefly noted the health care sector, which provides 760 jobs in Sitka. Another stabilizing influence is the U.S. Coast Guard, with a workforce of 248.
Garry White said most of the information in the economic report was not unexpected, but there were a couple of surprises.
“One of the kind of shocking things was our nonresident employment has grown substantially year over year, and that our short-term rentals have grown – much more than I thought they had,” he said.
White said the increase in the number of seniors in the Sitka population was projected years ago.
In terms of creating improvements for the Sitka economy, White said he would like to get more year-round jobs in Sitka to address a number of the negative trends, including a decline in the population 19 and under, and working-age population.
“What I hear from people wanting to leave town is they can’t afford to live here anymore,” White said. “How do we fix that? We need to put in more housing stock, more high-density housing stock to be able to create more affordable places to live. Not everyone’s going to be able to live in a three-bedroom house, especially people wanting to take one of the lower entry-level jobs.”
White said “quality of life” is one of the main reasons people live in Sitka, but it’s tough to afford to live here on seasonal wages.
“A lot of people grew up here, they want to stay here, but they can’t afford it,” White said. “They love it here – how can we figure out a way to keep them here?”
When asked about the growth in short-term rentals listed for the last six months, city Planning Director Amy Ainslie said it’s too early to say whether that is actual growth in terms of rental units, or owners deciding to list their units for more of the year.
There is some impact to housing availability in Sitka, but it’s difficult to quantify the exact impact, she said. Ainslie has seen a variety in short-term rentals, including owners who live in Sitka for most of the year and have a short-term rental during the summer. Other owners visit for a few weeks or a few months in the summer, and rent their housing out the rest of the year.
“To some extent the changes last year in short term rental regulations were intended to address this in residential zones,” Ainslie said. She was referring to requirements for residents in Residential zones to live on the property for 180 days or more, and to make short-term rental conditional use permits in residential zones expire when the property is sold.
