Nightly Lodging, Vacation Rental Homes, Short-term Rentals, B&Bs: whatever the term, the Seward Code is being reviewed for revision by the Seward Planning and Zoning Commission with a series of public work sessions and meetings.
The first public work session on July 18 was very informative but poorly attended.
Community Development Planner Jackie Wilde noted that there are many illegal nightly lodging businesses in city limits. These businesses are operating without a city and state business license, do not get inspected for fire and life safety, may not be operating in a permitted zone, and likely are not paying the required bed and sales taxes needed to support our city and borough services.
Services have sprung up on the Internet that can search across multiple booking websites to locate and provide information on nightly lodging businesses that are not in compliance. Both the city and borough can then pursue enforcement that can result in payment of past unpaid bed and sales taxes plus penalties.
Mrs. Wilde also noted that all nightly lodgings are considered commercial businesses because money changes hands. Regular homeowner insurance may not cover all types of nightly lodgings; a home rental policy with an endorsement for short term rentals or commercial liability insurance is needed. Nightly lodgings, as a commercial use, would also be charged a higher rate for utilities (electric, water, and sewer) than a residential use.
Commissioner Seese noted that if you have a nightly lodging business in your home, such as a B&B, homeowners 65 and older are no longer eligible for the Kenai Peninsula Borough property tax exemption as the home is no longer considered a residence but a business.
City Building Inspector Stefan Nielson explained that according to the International Residential and International Commercial Codes, nightly rentals without a permanent resident are considered a commercial use, even if it is in a regular single-family house or duplex. Monthly rentals or owner-occupied single-family homes and duplexes are residential, meaning permanent occupancy in nature.
He noted some of the differences between residential and commercial construction such as a sprinkler system, different rise-run stair design, hand railings, deck rails, etc such as a hotel would require.
It was a short work session that raised many issues and generated many more questions.
Afterwards, I researched commercial liability insurance for nightly lodgings and found recommendations for Proper Insurance, CBIZ Insurance, and Umialik Insurance. I’m sure there are other options to consider. Homeowner insurance generally does NOT cover nightly lodgings, so be sure to check your policy.
The next Planning and Zoning work session will be Tuesday, August 21 starting at 6 pm at City Hall Council Chambers. The work session will also include a presentation on “Subdivisions and Assessment Districts,” another topic regarding Seward’s housing situation.
If you operate a nightly lodging business in city limits, or are thinking about it, please come to this and subsequent work sessions. Your input is needed for any revisions to the Seward Code.
Submitted by Carol Griswold
Seward City News: “Read it, write it!”