The polarizing issue of short-term rentals --- an issue with passionate proponents on both sides --- is entering again the legislative purview of state lawmakers.
The 21st Century lodging option, which allows travelers to book their overnight stay in a home or apartment, is seeing is tremendously popular despite the realization of unintended consequences.
While some use short-term rental model to make some extra money by renting out a room or their guest house --- others are abusing what’s allowed under Arizona law a quick internet search reveals residential properties being offered for weddings and large events.
On Oct. 30, a joint ad hoc committee comprised of six Arizona representatives and senators hosted the first of three meetings to analyze the impact of short-term rentals on local neighborhoods. The first meeting was limited to discussing the issue of “nuisance” created by the temporary rentals.
As part of the meeting, Paradise Valley Mayor Jerry Bien-Willner was one of two municipal leaders invited to provide insight on the issue.
Over 100 people attended the Oct. 30 meeting at the Arizona Capitol, 1700 W. Washington Ave.
Arizona Senate Bill 1350 --- which some call the “AirBnB” bill --- restricts local cities and towns from regulating or restricting the use of vacation rentals or short-term rentals within municipal boundaries.
Neighborhoods throughout the Valley, and especially destination communities such as Paradise Valley and Scottsdale, are seeing disruption to their once family-friendly residential streets, some say.
While many short-term rentals house families on vacation, or employees on business trips, others are booking parties of 20 oftentimes accompanied by raunchy behavior.
In extreme cases --- as committee co-chair, Sen. Kate Brophy-McGee, detailed to the public on Oct. 30 as she read a constituent’s email --- residents are witnessing lewd, sexual behavior in the yards next door to their family homes.
The fever pitch of complaints being received by elected officials spurred the creation of the joint committee to seek alternative options. The members of the ad hoc committee are:
A second bill sponsored by Rep. John Kavanagh --- House Bill 2672 --- further regulates vacation rentals by allowing municipalities to get a local contact for police officers to use in the case of a disturbance, nuisance or emergency.
Paradise Valley and Scottsdale have both approved local ordinances to allow for homeowners to receive fines if their properties are identified as being nuisances --- meaning police are called several times or illegal behavior is identified. In Scottsdale, short-term rental owners are required to have their contact information on file.
Officials and residents agree, not all short-term rental homes are creating problems --- but the troublesome properties are creating issues that are difficult to address.
While some neighborhoods are dealing with unruly properties, other complexes are seeing vast majorities of their units being purchased to become short-term rentals.
In support of STR
Matt Miller, a senior attorney for the Goldwater Institute, provided testimony to the ad hoc committee that a handful of bad actors are responsible for a badly disproportionate number of problems.
Furthermore, he argued that short-term rentals do not create problems and nuisances at a higher rate than long-term rentals.
“Cities have long had to protect adjacent property owners from nuisance behavior --- particularly in tourist and student areas, bad neighbors and party houses have long predated AirBnB and the internet,” Mr. Miller said.
“There are bad short-term rentals, just like there are problems with any kind of property types.”
Mr. Miller says that while short-term renters are unconcerned about fitting in with the neighborhood and are therefore more likely to create noise and cause problems, on the other hand the short-term rental platforms allow for instant feedback on the quality of guests and hosts, and bad apples are likely to be banned or suspended based on behavior.
“Partiers constitute a small proportion of short-term rental guests. Those guests are more likely to be couples, small families, business travelers or people needing temporary housing,” he said.
Repeat offenders are not hard to keep tabs on, Mr. Miller argued, stating Arizona laws in place can be used to track down these bad actors.
“Under existing laws, Arizona cities have authority to regulate illegal vehicle or pedestrian traffic, dangerous pets, accumulation of litter, high weeds, foul odors and malfunctioning drainage. They can regulate parking, they can regulate excessive and unreasonable noise,” he said.
“Enforcing these regulations requires on-the-ground, granular work by code enforcers and police officers. But that has always been the case with bad neighbors, whether the person owns the property, rents it long-term or rents for the night.”
Overall, Mr. Miller says the Goldwater Institute is opposed to repealing SB 1350, and believes the state needs to give the most recent HB 2672 an opportunity to work.
However, Sen. Brophy-McGee says she doesn’t think it’s an option to wait and see what will happen.
“I don’t think you can wait two months to see what’s going to happen --- a year, or whatever it’s going to take to see if it’s going to work, because we’re actually legislating for unintended consequences nobody saw that are occurring and occurring at a long, expanding rate,” she said.
Rep. Kavanagh echoes a similar sentiment.
“I think it’s important to understand the more a situation is allowed to go with these horrible situations --- granted not everybody --- the more stories you hear, the more people’s lives are disrupted, without a quick correction, the more you’ll have a critical mass of legislature to kill this whole thing,” Mr. Kavanagh said.
“By allowing this to go uncontrolled, I think you risk a backlash some day that’s going to go way beyond what would have happened had we done incremental reforms.”
Hotels disguised as homes
League of Arizona Cities and Towns Legislative Director Nick Ponder argued little consideration was given to the property rights of those around short-term rental owners.
Mr. Ponder says the difference between a long-term rental and short-term rental is vastly different, unlike what SB 1350 defines.
“Despite the warnings from our association --- where the League of Arizona Cities and Towns indicated our opposition to this legislation because of local control concerns, and the concerns of unintended consequences, obviously the bill passed the legislature without much opposition,” Mr. Ponder said.
He pointed out several ads appearing on various short-term rental websites advertising public parties and single-family homes who could sleep upwards of 32 people.
“This is a property advertised on MeetUp.com --- this was a house in Fountain Hills for a Halloween Party,” Mr. Ponder said while a flyer appeared on screen.
“They advertised that last year, 250 people showed up. Please come one, come all to our party.”
Next, he showed a Sedona home advertising the property as a venue for weddings, retreats or reunions that could sleep 20.
“I don’t really know what to say, other than these are hotels disgusted as single-family homes that get to avoid the traditional barriers of entry to a hotel,” Mr. Ponder said, pointing out fire code enforcement and other safety regulations.
“If none of that is met, then those resources are put upon the municipality to then go out, unclog the sewer line for example. Send police out to address issues, send excess trash collection out --- these are resources we are required to utilize with taxpayer dollars.”
Rep. Grantham pointed out that municipalities are collecting tax revenue off of the rentals, and should be using its resources to follow the law.
“Here we are --- in a post HB 2672 world for a few months, and quite frankly, the state legislators and the city should be creating an ordinance or directing its code enforcers, or its police department --- however, you want to define it --- to go out when there’s a party,” Mr. Grantham said.
“If there’s a party at the house regardless of its a long-term renter, an owner, a short-term renter, to go out and ticket that person. To enforce the law that’s on the books. To hear, ‘well, they don’t’ want to go out...’ I just struggle with the excuses.”
Mr. Ponder provided a rebuttal.
“I’m not asking the state to make any law that applies to everybody. What I’m asking the state to do is be permissive of municipalities to address the issues that are of concern to them,” he said. “The issues in Sedona don’t necessarily apply to Peoria. Sedona should be able to address those issues for their constitutes.”
Burdens on citizens
When the time came, Mr. Bien-Willner provided some insight on the community of Paradise Valley, and the challenges they’re facing when it comes to short-term rentals.
Vice Mayor Scott Moore and Deputy Town Manager Dawn Marie Buckland attended the hearing in support.
Mr. Bien-Willner explained to the group the fundamental issue of short-term rentals, as Paradise Valley is primarily an all-residential community --- which was set up at incorporation in 1961 to be just that.
The 5,500 homes in Paradise Valley make up about $10 billion worth of home value, Mr. Bien-Willner said.
“What is the nuisance of short-term rental? Let me just say, respectfully, I object somewhat to that term --- I think it’s an unstaffed motel, that’s my opinion of what it is,” Mr. Bien-Willner said. “That’s the opinion of our residents in Paradise Valley.”
While Paradise Valley has enacted a “party house” ordinance for unruly gathering, Mr. Bien-Willner says it also isn’t the spirit of their community to throw the book at rule-breaking residents.
“The burdens on citizens is tremendous,” the mayor said. “What I’d say to say the nuisance is having a commercial activity next to your house that you didn’t bargain for. The town was founded in 1961 with the expectation that you wouldn’t have a motel next to you, or a drug store, or any other use. Now there’s nothing wrong with a drug store, but I wouldn’t want one next to my house --- that’s what zoning is for.”
Mr. Kavanagh says Paradise Valley is an interesting case when it comes to short-term rentals.
“These are affluent, professional people, who know how to assert their rights --- they’re a lot different than the elderly, retired couple in Fountain Hills,” he said. “I find it amazing these people who are quite powerful, with a lot of resources, seem to be just as imminent as that couple in Fountain Hills to having the nuisances stopped.”