Opinion

Hunter: Response to Hildebrand's short-term rental opinion

Posted 3/5/21

Mr. Hildebrand: What can I say but “There are none so blind as those who will not see.”

The willful ignorance on the part of the short-term rental industry about the very real …

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Opinion

Hunter: Response to Hildebrand's short-term rental opinion

Posted

Mr. Hildebrand: What can I say but “There are none so blind as those who will not see.”

The willful ignorance on the part of the short-term rental industry about the very real problems STRs have caused in Arizona makes a bad situation so much worse. What exactly are the “big lies” being told about short-term rentals?

Was the video done by the PV Police Department a lie? It uses real body cam clips of felons with guns and real 911 calls. The facts are that disturbance calls on STRs were up 114% in Paradise Valley and 45% of PVPD disturbance calls were for STRs. New numbers show STRs cause nuisance calls at 27 times the rate of actual Paradise Valley residents.

If the PVPD is producing videos about problems with STRs, maybe there are real problems that need real solutions. No lie.

Was the letter from 33 Arizona mayors a lie? When mayors representing almost 65% of the state’s population urge reform for STRs, maybe there are real problems that need real solutions.

But thanks for pointing out the obvious fact that STRs are indeed “small businesses, that is, commercial operations instead of the “residential use” they pretend to be to get around zoning and other regulations designed for the public’s safety and quality of life. Thanks for finally clearing up the “big lie” that STRs aren’t commercial operations.

Towns and cities are still prohibited by the state from regulating SRTs for the key items of occupancy, use or classification. Enforcing noise and traffic ordinances only happens after problems occur. Local communities need to regulate STRs, especially on occupancy limits, to prevent problems from occurring in the first place.

Nobody has a problem with true “home sharing” of a primary residence. This was the original version of Airbnb, where there is still a neighbor and resident in the property keeping things from getting out of control. Home sharing answers the “property rights issue” of using your home as you choose and was allowed long before SB 1350 was enacted. “Home Sharing” is not the problem, so we can take it off the table right now.

The problem is unstaffed, unregulated, unregistered investor units that now make up the vast majority of STRs, often with out of state ownership. These are full time commercial hotel operations that are strip mining our neighborhoods. They will never be a neighbor and will never be a part of the community. They ruin the quality of life for residents and are appallingly bad public policy, for instance:

Income taxes – Since investor STRs have no actual resident potential income-tax revenue is lost to the state. The average STR in Paradise Valley paid only $1,340 in “bed taxes” last year while a Paradise Valley resident with median income would pay about $7,500 in state income taxes. State revenues would be 5.6 times better off with residents in homes and visitors in hotels.

Bed taxes – With 4.3 average bedrooms per STR, STRs in Paradise Valley paid only $314 per room in bed taxes last year compared to legitimate Paradise Valley hotels that paid $2,153 per room, almost seven times as much as STRs on a per room basis. PV would be far better off with residents in homes and visitors in hotels — and would avoid the nuisance issues and costs of policing STRs.

Property taxes – Legitimate hotels pay commercial property tax rates, which are about 80% higher than the residential rates paid by investor STRs, even though investor STRs are obviously commercial operations.

Audit loophole – SB 1350 gives STR operators immunity from tax audit, a wide-open invitation for tax abuse and unreported income. This provision alone should outrage every citizen of Arizona.

Jobs – Most Paradise Valley households already have pool, landscaping, housekeeping and handyman services. There is zero increase in employment when a resident’s home is flipped to an STR.

Tourism 1 – Studies show 98% of tourism would still occur even if STRs were not available. STRs don’t bring new tourism, they just cannibalize one of the State’s largest employment sectors.

Tourism 2 – Average Daily Rates for STR rooms are 62% lower than legitimate hotel rooms in Arizona, so tourism revenues and bed taxes are 62% lower too.

Also, STR visitors are far more likely to eat and drink at “home” instead of bars and restaurants, killing even more revenues, jobs and taxes for the State.

Arizona loses money every time a visitor stays at an STR.

What are the solutions? Investor owned STRs need to be registered with platforms (like Airbnb) required to verify listings as they already do in many jurisdictions. Local zoning needs to be reinstated so communities can regulate STRs according to their own needs and standards. Occupancy limits that conform to single family norms would address the overcrowding that is clearly the biggest source of nuisance.

Finally, tax investor STRs like the commercial operations they clearly are and eliminate glaring loopholes.

True home sharing of a primary residence is a benefit for homeowners, residents and tourists. Investor owned STRs are a disaster for Arizona’s economy and quality of life. Arizona would be far better off with residents in homes and visitors in hotels.

Let your legislators know they need to fix SB 1350 and protect Arizona jobs, residents and neighborhoods.

Editor’s Note: Mr. Hunter is a local resident who lives between two short-term rentals; one that takes 30+ people, the other 20+ people. He hasn’t had a good night’s sleep in over a year. He works with www.neighborsnotnightmares.com.

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