Short-term rental units sprout up in Phoenix as demand from visitors increases

Kaleigh Strong
Posted 12/4/19

Phoenix visitors looking for more affordable alternatives to hotels have led landlords to convert their apartment complexes and homes into short-term rentals with companies like Airbnb facilitating …

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Short-term rental units sprout up in Phoenix as demand from visitors increases


Phoenix visitors looking for more affordable alternatives to hotels have led landlords to convert their apartment complexes and homes into short-term rentals with companies like Airbnb facilitating transactions between renters and rentees.

Thomas McPherson, the owner of the Historic Westminster Apartments in downtown Phoenix, said he converted five apartments into short-term rentals out of the 16 total units in the building.

McPherson partnered with the company Wanderjaunt, a competitor to Airbnb in Phoenix, to do a master lease of the Historic Westminster Apartments, he said.

Wanderjaunt will manage the short-term rental section of the building for McPherson, allowing him to work on other projects. One such project is a 70-unit mixed-use project that prioritizes sustainable energy by installing solar panels that will be a supplementary energy source, McPherson said.
McPherson said that he aims to give visitors an authentic Phoenix experience through his short-term rentals.

“It gives people this opportunity to really experience and enjoy Phoenix, and I think offering that is really cool,” McPherson said. “Giving people the ability to do that I think will continue to help drive Phoenix as being a location, a destination, a fun place to be, visit, live, travel, work, all of those things.”

Affordable housing advocates have voiced concerns that short-term rentals provide lodging for visitors at the expense of affordable housing for Phoenix residents.

Camaron Stevenson, the communications director for the Arizona Housing Coalition, said that short-term rentals could displace residents if buildings are purchased solely to cater to travelers.

“It gives homeowners an opportunity to rent part of their house out to make some extra money and give someone an inexpensive place to stay,” Stevenson said. “On the flip side, it also has the negative effect of taking away housing if properties are purchased specifically for the purpose of short-term rentals.”

Still, McPherson said he sees short-term rentals as a catalyst for growth for the housing supply.

“I think short term there’s undoubtedly some displacement of local residents,” McPherson said. “Long term I believe that if a place is desirable enough to have (a) large amount of short-term rentals, there will be a large increase in the housing supply. Currently, demand has increased or outpaced supply, and that’s why we’ve seen rents go up as fast as they can. When you have that demand skyrocketing, supply will follow.”

According to a report by RentJungle, an online search engine for rental housing, the average cost of living in Phoenix rose 12.95% from last year as of April 2019. For some homeowners, renting out their property can provide the additional revenue needed to get by, McPherson said.

“In my particular instance, it might be a little bit easier to demonize me, but are you going to demonize the young college student or single mother who Airbnb’s out her extra bedroom?” McPherson said. “Is she doing something that is worthy of vilifying her so she can make a little bit of extra money and make ends meet?”

In 2016, Gov. Doug Ducey signed Senate Bill 1350, that states cities and towns are not allowed to regulate or prohibit the use of vacation or short-term rentals.

Three years later, Ducey signed House Bill 2672, a law that restricts the use of short-term rentals to host special events without a permit or license. The law also requires homeowners to provide the city or town with contact information for complaints.

In September, the Scottsdale City Council voted 7-0 to adopt two ordinances, one that mirrors House Bill 2672 by restricting the use of short-term rentals for “non-residential purposes” and requiring homeowners to provide contact information for complaints and another that fines homeowners service fees for local authority responses to nuisance parties and unruly gatherings.

The second ordinance outlined that property owners will be charged $500 for the first response, $1,250 for the second and $2,500 for the third.

Raun Keagy, the planning and development area director for the City of Scottsdale, presented the ordinances and said that some short-term rental owners do not want to be “lumped in” with property owners who do not conduct their short-term rentals in a responsible manner.

“We’ve had some of the responsible short-term rentals already come to us and provide us with that information,” Keagy said during the City Council meeting in September. “Not only emergency information, but the information that we need to hold to ask them who’s going to be responding to the complaints.”

Although House Bill 2672 empowered Scottsdale to adopt new regulations on short-term rentals, Phoenix officials have not expressed a need to regulate short-term rentals. While McPherson said he hesitates to use the word regulation, he does understand the need for short-term rental precautions.

“Appropriate safety precautions should be taken in any industry as well --- this includes short-term rentals,” McPherson said. “I’m sure that there are probably people that are renting out spaces that perhaps don’t meet certain codes or are not even considered habitable or livable. So I do understand the potential need for regulation.”

Editor’s Note: Kaleigh Strong is a student journalist at the Walter Cronkite School of Journalism and Mass Communications.