It’s now been a month since short-term vacation rentals have been officially legal in Sedona, even though the practice had been going on illegally for years.
City officials are in a wait-and-see mode as to the potential impact the law — formerly known as Senate Bill 1350 and is now codified as Arizona Revised Statute §9-500.39 — may have in Sedona.
“It is probably too early to assess the overall impact,” City Attorney Robert Pickels said. “Yes, this activity was already occurring, but the volume seems likely to increase significantly so that what might otherwise have gone unnoticed could now be very prominent.”
In October, the Sedona City Council adopted an ordinance that states that those renting their homes will be required to obtain a city business license as well as obtain a transaction privilege taxes license with the state. However, online companies like Airbnb handle the TPT and business license as long as the customer continues working through them. If the owner decides to rent their home on their own, they must file TPT with the state and obtain a city business license.
“In an effort to ensure a smooth and seamless transition when SB 1350 goes into effect on Jan. 1, 2017, we are recommending a revised ordinance be adopted by council so that all interested parties will know what is expected of property owners planning to engage in short-term vacation rental activity,” Pickels said late last year.
On May 12 Gov. Doug Ducey signed Senate Bill 1350 into law. Because Sedona’s ban on short-term rentals is no longer valid, the city developed policies around areas like licensing, registration of an emergency contact and collection of taxes on properties permitted to operate under the provisions of the law.
Since 1995 the city, by ordinance, prohibited the rental of residential properties for less than 30 days. In 2008, Chapter 5 of the Sedona City Code was amended to proscribe and identify penalties for various activities related to the rental of residential properties for less than 30 days.
As of the beginning of this week, 25 business licenses had been issued.
Pickels said he’s not getting calls or emails from those for or against the new law. He did, however, get an email from the Goldwater Institute, a Phoenix-based conservative public policy think tank, with a concern about the legality of requiring a business license.
“I gave them my justification, and it appears to have appeased them, for now,” he said.
Both Pickels and Community Development Director Audree Juhlin have concerns about the new law, primarily when it comes to safety issues.
“I think the biggest concerns are twofold,” he said. “One is that these new lodging establishments will not be subject to the same safety standards as traditional hotels/motels or bed-and-breakfast establishments. And, the other is that the character of many residential neighborhoods could be negatively impacted.”
Juhlin said her department continues to receive calls or emails from residents who were evicted from their long-term rental [after being converted to short-term] or are new to town and cannot find any rentals. In addition, calls come from owners and potential owners who want to make sure that they can rent their house/rooms on a nightly basis and if there are any regulations that they need to be aware of.