The city of Sedona will soon be making a few tweaks here and there to its short-term vacation ordinance. But not as many as city officials had hoped for.

On May 21, Arizona Gov. Doug Ducey signed House Bill 2672, which gives cities a bit of relief in terms of overseeing short-term vacation rentals, which has become an issue in Sedona with an estimated 1,100 such properties for rent.

“First of all, we’re going to have to revise our ordinance because we have some things now that we haven’t been able to do in the past,” City Attorney Robert Pickels told the Sedona City Council on May 28. “At some point after the 90 days elapses from today’s date and the bill becomes a law, we will bring to you a revised short-term rental ordinance that will include some of these new authorities.”

He also said this gives staff time to deter­mine how this will be approached from an enforcement level. Had the city known months ago this was going to be approved, they could have included in this upcoming year’s budget a new staff position within the code enforcement department.

“Although this bill didn’t include all that we want to accomplish, I believe that it was a significant win for Sedona,” Pickels said the day the bill was signed.

In terms of what this bill means for Sedona, Pickels said the city will have access to taxpayer information that has previously been confidential.

“We will now be able to better track the specific locations of all short-term rentals within our community,” he said. “Also, when owners advertise their prop­erties as short-term rentals, they will be required to include their taxpayer iden­tification number on the advertisement.

 This will ensure that all short-term rental opera­tors have registered with the Arizona Department of Revenue to collect and remit the required sales and bed taxes.” 

This bill prohibits a short-term vacation rental from:

• Being used for nonres­idential uses, including for special events that would require a permit or license or a retail, restaurant, banquet space or other similar use.
• Being offered for rent or being rented without a current Transaction Privilege Tax license.
• Being offered for rent without the TPT license number being included in the advertisement.

It also allows cities, towns and counties to require short-term owners to provide contact infor­mation for someone who is responsible for responding to complaints in a timely manner before advertising or renting the home.

In addition, cities, towns and counties can use certain information on a short-term owner’s TPT license for the purpose of enforcing local regulations of vacation rentals.

Violators of the bill can be fined $250 for a first-time offense and up to $1,500 for a third offense, which would be imposed by the Arizona Depart-ment of Revenue based upon verified violations.

“We need to figure out how to incorporate that into our ordinance,” Pickels said following the council meeting. “Also, the mechanisms for enforcing the TPT requirement and obtaining a verified violation will be critical pieces that we need to address. The Department of Revenue will similarly have to determine how enforcement of the penal­ties will be achieved.”

Senate Bill 1350, which Ducey also signed, went into effect nearly two and a half years ago and eliminated a city’s right to regulate short-term vaca­tion rentals. Despite the practice being against city code in Sedona, it went on for many years prior to SB 1350 becoming law.

“There continues to be an inequity in cities like Sedona between tradi­tional transient lodging [hotels/motels] and short-term rentals,” Pickels said. “To achieve a level playing field, all of these activi­ties need to be treated the same so as to not create an unfair advantage for short-term rentals at the expense of our traditional lodging industry. The city will continue to draw attention to this inequity and pursue legislation to resolve it.”

In a letter to Arizona Secretary of State Katie Hobbs following the signing of HB 2672, Ducey pointed out that resi­dents have the right to do what they want with their property without undue government interference.

“That’s why three years ago I signed SB 1350 to stop local govern­ment from prohibiting homeowners from renting their homes on platforms like AirBnb and VRBO,” he wrote. “That bill also narrowed the scope of permissible short-term rental regulations.”

He went on to write that local governments may enforce rules related to building codes, traffic control, noise, zoning and other areas that ensure that neighborhoods stay safe and pleasant for those full-time residents.

“Most short-term rental homeowners are good neighbors,” Ducey wrote. “HB 2672 provides a straight-forward enforce­ment mechanism to penalize ‘party house’ oper­ators for not upholding the laws on their properties.”

Ron Eland can be reached at 282-7795, ext. 122 or by email at reland@larsonnewspapers.com