Lawmakers debate short-term rentals

It’s great to be able to travel out of town and rent a room or a small guest quarters in someone’s well-kept home.

However, some deregulation that’s taken place in Arizona — particularly one state law passed in 2016 — created problems in communities across the state. The Sun Cities were no exception. Officials in the age-restricted communities are concerned short-term rentals could damage the quality of life there in a number of ways.

“One is, often the renter causes some sort of unusual disturbance in the neighborhood, which is disruptive to the peace and tranquility that we have grown accustomed to,” Jerry DeLano, Sun City Home Owners Association general manager, stated in an email. “Also, there is some concern how those properties effect our percentage of rental barrier that we must adhere to in order to retain our age overlay that sustains us to maintain the 55-plus community.” 

Some Northwest Valley leaders, local governance advocates and others in the region are lobbying the state Legislature for changes or rollbacks to Senate Bill 1350. That 2016 law, which prevents local municipalities from creating rules or restrictions unique to short-term rentals, has handcuffed local Arizona governments from combating some ills that go with the business boom of companies such as AirBnB and Vrbo.

During last year’s legislative session, SCHOA officials supported a bill that would have allowed more local control over short-term rentals. However, the Sun Cities would not fall under the “municipality” definition as they are unincorporated areas of Maricopa County. Legislation would have to be crafted to allow county officials to act with any law changes aimed at municipalities.

“Since there is no authority for SCHOA to regulate short-term rentals, it becomes necessary for the legislature to respond by providing the necessary avenue for county governments to enact policy that would provide an avenue of regulation,” DeLano stated.

The Sun Cities covenants, conditions and restrictions could be amended to add a layer of regulation. But that is easier said than done. SCHOA officials two years ago were about to embark on a campaign to amend Sun City CC&Rs, which included prohibiting rentals of less than 30 days, but it was postponed by the COVID-19 pandemic and has not regained traction.

“That is a very complicated and cumbersome process and does not provide a short-term answer to the problem,” DeLano stated.

Last year, District 17 Sen. J.D. Mesnard, R-Chandler, submitted Senate Bill 1379 aiming to allow more local control over short-term rentals. That bill cleared the Senate but was soundly defeated in the House. This year, with a slight shakeup to the lineup in both legislative chambers, he’s hoping for a different outcome.

“I’m starting with the final version of 1379 as this year’s starting point,” Mesnard said. “Hopefully, we’ll get the support for citizen-resident property owners this time.”

Mesnard’s Senate Bill 1168, along with a House companion bill, House Bill 2234, sponsored by District 15 Rep. Steve Kaiser, R-Phoenix, would give municipalities more tools to go after corporations or whomever owns “party houses” that are rented to customers and that violate local noise, nuisance or other ordinances.

Other legislation aims to go farther. House Bill 2069, proposed by District 6 Rep. Walt Blackman, R-Snowflake, is a repeal of Senate Bill 1350, the 2016 law signed by Arizona Gov. Doug Ducey. The bill Blackman introduced would return law back to before changes were made. District 6 Sen. Wendy Rogers, R-Flagstaff, has identical legislation in Senate Bill 1026.

“It doesn’t appear there is real support from the state to provide the necessary tools for regulation,” DeLano stated. “Plus, the industry (ie. Airbnb) has very strong lobbying forces nationwide, and they are felt in our own legislative body.”

Some leaders, including Mesnard, say Blackman’s proposed repeal goes too far. Mesnard said his measures address one of the biggest issues — irresponsible short-term renters.

A move to alter that 5-year-old law this year would not be the first attempt to change it. House Bill 2672, passed in 2019, requires property owners renting space to provide authorities with contact information in case of a complaint, such as for excessive noise, and also prohibits rentals for the purpose of holding a special event that would otherwise require a permit or license or for using a residential building for commercial purposes.

That law also requires all “online lodging operators” to obtain a transaction privilege tax license before offering rentals and list the license number on all advertisements.

However, users of rental apps have found ways around these restrictions, and some situations with rental properties have become progressively worse.

The buying up and hording of real estate by hotel and real estate holding companies, along with surge in “party houses,” seem to be two of the biggest short-term rental complaints.

Around the state, places with limited housing inventory, such as Sedona, Payson and Globe, have struggled to meet growing tourism demands and the need for employee housing as firms buy up homes to rent out room-by-room or as a single unit.

As the COVID-19 pandemic drags on, vacation spots, hotel and travel frustration set in, and demand for vacation housing soared even higher.

“Shortly after this preemption of local authority, Scottsdale began hearing from constituents about their desire to amend the law to allow for reasonable regulations,” said Brent Stockwell, Scottsdale assistant city manager. “(Residents want to) limit the proliferation of short-term rentals and prohibit activities disrupting their neighborhoods and quality of life, such as loud noise, crowds, and trash.”

In November, the Paradise Valley Town Council discussed additional ways to strengthen its authority to work with short-term rentals. New tools to deal with rental situations is one of the council’s stated priorities going into this year’s legislative session.

Melissa Rosequist of Independent Newsmedia contributed to this story.