House bill would let municipalities offer targeted property tax exemptions to spur housing; committee raises voter-ratification and fiscal concerns

Representative Andrew Gray introduced House Bill 13 to the House Community and Regional Affairs Committee on March 25, 2025, proposing optional municipal property-tax exemptions aimed at increasing long-term rental supply and improving low-cost housing stock.

The bill gives municipalities discretion to offer up to four types of optional exemptions: incentives for landlords who convert short-term rentals to long-term rentals; exemptions for mobile-home-park owners who make major infrastructure investments; exemptions for landlords who rent to low-income families; and a partial exemption for first-time homebuyers. The bill would permit municipalities to limit exemptions to owner-occupied residential properties.

Why it matters: Alaska faces sharply rising home prices and rents, a shortage of new construction and low vacancy rates, the sponsor said. “What this bill does is provide tools to municipalities for tackling a crisis in our state. The crisis is lack of housing that Alaskans can afford,” Representative Andrew Gray said. The committee heard data and anecdotes intended to show why municipalities asked for more discretionary tools.

Key bill details and debate - Sponsor’s pitch: Representative Andrew Gray said the exemptions are optional tools municipalities could adapt to local needs and emphasized the bill is meant to expand housing supply and improve existing affordable housing stock. - Four optional exemption types: (1) conversion of short-term rentals to long-term rentals; (2) major infrastructure investment in mobile-home parks; (3) landlords renting to low-income families (language still being refined); (4) first-time homebuyer exemptions. Gray noted the mobile-home-park provision grew from municipal requests and the owner-occupied limitation was modeled on a proposal from the Anchorage Economic Development Corporation. - Voter ratification: Representative Justin Ruffridge and others asked whether the bill would remove the current voter-ratification requirement for property-tax exemptions. Sandra Moller, director of the Division of Community and Regional Affairs, confirmed the sponsor’s reading: “It would have to be approved by the, voters,” and under the bill municipalities could implement these exemptions without an additional voter ratification step. - Legal and definitional points: Kyle Johansson, staff to Representative Gray, said the bill reuses the dwelling-unit definition from the Landlord–Tenant Act. Johansson noted the statutory catalog already contains many optional exemptions and the bill adds more specific, locally adaptable tools. - Concerns about gaming and occupancy: Representative Ruffridge pressed scenarios where owners might reclassify owner-occupied or mixed-use properties to obtain exemptions. Gray said municipalities would retain discretion to define eligibility and that he expected local rules or amendments to prevent gaming the exemption. - Boroughs and local control: Committee members asked whether boroughs are included. Gray said he would amend the draft to explicitly include boroughs. Several members emphasized the fiscal tradeoffs for municipalities that rely on property taxes and that exemptions could reduce revenue or shift the tax burden. - Caps and fairness: Representatives pressed the sponsor on whether the bill should set state-level caps or require local caps; Gray said he favored local control and expected municipalities to set their own limits, including the option to offer no exemption. - Mobile-home-park focus: Cochair Donna Mears and other members described mobile-home parks as an important affordable-housing resource that often requires expensive infrastructure repairs; the bill’s mobile-park exemption is intended to encourage those repairs.

Committee disposition and next steps: The committee did not adopt the committee substitute and worked from a “version n” work draft. Cochair Mears indicated the discussion raised issues that require further refinement. The committee set HB13 aside for additional invited and public testimony; the agenda notes invited and public testimony will continue at a later hearing.

What the bill does not do: HB13 does not compel any municipality to enact exemptions; it creates statutory authority municipalities may use. It does not itself change municipal budgets; local governments would decide whether to enact, limit or cap any exemption. The bill’s low-income rental language remained under revision at the hearing.

Ending note: Committee members repeatedly framed the bill as a municipal toolbox rather than a statewide mandate, with debate focused on voter ratification, local fiscal impacts, and prevention of unintended incentives.