Log in

2021 legsilative session

Lawmakers want more local control for short-term rentals


PHOENIX — Some Republican lawmakers want to revisit — and repeal — the 2016 measure that stripped local governments of their ability to regulate short-term and vacation rentals.

Rep, Walt Blackman of Snowflake said the legislation pushed by Airbnb and its other companies and supported by Gov. Doug Ducey has had a serious negative effect on neighborhoods. So he has introduced House Bill 2069 to put the law back the way it was before changes were made.

His Senate seatmate, Wendy Rogers of Flagstaff, has identical legislation in Senate Bill 1026.

The move will get a fight, and not only from the companies that benefit from being clearinghouses for people to rent out everything from individual rooms to entire homes.

Sen. J.D. Mesnard, R-Chandler, is planning to introduce a less-comprehensive measure that gives cities and counties some control over issues such as noise and other violations. He said that should help address perennial complaints of “party houses” popping up in residential areas.

Blackman, however, said those efforts fall short of what’s needed to ensure homes in neighborhoods are not turned into de facto hotels.

The original measure was sold to lawmakers as allowing individuals to rent out a spare room to make a bit of extra cash. In fact, that’s how Airbnb got its name, the idea being an air mattress set up for a guest.

“For thousands of hardworking citizens, opening up their homes to out-of-state guests provides the financial breathing room they need to provide for the family or enjoy an extra expenses that they otherwise couldn’t afford,” Ducey said in signing the bill.

But the reality turned out to be something quite different.

In some communities, homes and apartments in entire areas have been bought up by investors to be converted into these short-term rentals, drying up the availability of affordable housing for local residents and converting whole areas into vacation rental zones — possibilities Ducey dismissed in 2016 as “hypotheticals.”

By 2019, however, the governor conceded there were “some unintended consequences” in the law.

“It does appear in the situation of Airbnb and other organizations that we have some people out there that are doing some things that are disruptive to communities,” Ducey said.

That resulted in some amendments allowing cities to issue some public safety regulations, like requiring owners to provide a contact for who could respond to complaints and prohibiting rentals from being used for special events like weddings.

But Blackman told Capitol Media Services all this is missing the point. He said these are local issues and none of the business of state lawmakers.

“That should be decided at the lowest level of government,” he said.

“That’s the mayors, the city councils,” Blackman continued. “Those are the people that live in that area.”

Mesnard, however, sees the question from a different perspective.

First, he said, it will create “a mish-mash of regulations” among cities. But Mesnard said the larger issue is leaving these decisions to mayors and council members will “trample on property rights,” meaning the ability of individuals to use their homes in a way they want — and to be able to make money by renting them out.

Blackman, however, said the property rights that are at issue here are those of the people living in the neighborhood, which is why these questions are best handled by local officials.

“So if the community says they don’t want to do it, that’s a community decision, not a decision made here at the state,” he said.

Mesnard said he sees the big complaint being those “party houses.” And he said there are ways to address that.

Last year, for example, he proposed allowing communities to impose fines on owners who fail to provide information for police and others to contact them if there are problems with the tenants. The measure also would have let cities mandate minimum liability insurance.

Potentially more significant, it would have meant an owner would lose a state license to do business following three violations of local ordinances within three months, violations that could include noise or nuisance complaints.

It failed.

“It feels like that issue of party houses is being used to try to do more than just address party houses,” Mesnard said. And he said he would be open to further tweaks in the future to maintain that balance between the rights of individual property owners and the neighbors.

“But they want to take a sledgehammer to the thing,” Mesnard said, rescinding all limits on what cities can and cannot forbid. “I’m not going to support that.”

The problem, however, is not limited to party houses.

During hearings last year there was testimony about investors creating de facto hotels in residential neighborhoods, dividing up homes into multiple rooms being rented out by the night.

Then there’s the question of drying up the supply of affordable housing.

There have been estimates that up to 40% of residential properties in tourist destinations like Sedona are now vacation rentals. And Rep. John Kavanagh, R-Fountain Hills, who voted against the 2016 law, said it also is happening in places like Scottsdale.

Blackman said his colleagues should be sensitive to imposing limits on local control.

“We don’t want the federal government imposing on us,” Blackman said.

“But we’re doing it to local cities and towns,” he said. “It doesn’t make any sense to me.”

Unsurprisingly, Airbnb is opposed to what Blackman and Rogers want and instead supports the more limited restrictions in the Mesnard bill, arguing that anything more would harm the tourism economy.

No date has been set for a hearing on any of the proposals.