The wait may soon be over for those interested in whether or not Sedona residents will have the right to rent their homes on a short-term basis — something currently banned within the Sedona city limits.
Senate Bill 1350, which was introduced in early March by Arizona State Sen. Debbie Lesko [R-District 21], would allow short-term vacation rentals of less than 30 days anywhere in the state. The practice currently takes place in Sedona with hundreds of homes listed on a variety of websites. But each is in violation of city code.
On Friday, May 6, the bill was passed on a final vote by the Arizona Senate. The bill, as amended in the Arizona House of Representatives, will now be sent to Gov. Doug Ducey for his signature. If signed, Sedona’s existing ordinance will essentially be rendered obsolete.
According to City Attorney Robert Pickels, an amendment included all of the original language but stripped out the grandfathering clause that the Arizona League of Cities and Towns was advocating for on behalf of cities with ordinances that preceded Proposition 207.
If signed by Ducey, the bill would impact just a handful of cities in the state that ban short-term rentals, the largest of which is Scottsdale. Pickels also said that because Ducey has pushed Arizona as an economic-friendly state, he feels he will sign the bill.
“I’m not surprised at all,” Pickels said of the Senate vote. “I’m also very confident the governor will sign it.”
At this point, he’s not sure what, if any, recourse the city may have but that he and staff will look into it. They will have a bit of time since bills don’t go into effect until 90 days after being approved.
“It was transmitted to the governor, along with a host of other bills, immediately upon passing,” he said. “So, I would expect that the bill will be signed as soon as his office is able to process them all.”
SB 1350 was originally a tax bill that would enable the state to collect taxes from not only the owners who rented out their homes but also the companies those owners go through such as Airbnb and homeaway.com. Those third-party companies, according to Pickels, don’t have an issue with the homeowner being taxed but are opposed to having their fees taxed.
He said that there was some new language included in the amendment that is intended to strengthen the ability to tax short-term rentals in the same manner as other lodging activities.
Since the announcement of the bill, Pickels — as well as the Sedona Red Rock News — have received several inquires from area homeowner associations regarding whether or not a new state law would trump any of their rules and regulations.
“What I have been telling them [HOAs] is that I can’t give them any legal opinion regarding the enforceability of their CCRs [condition, covenants and regulations], but that the legislation is limited to cities, towns and counties,” Pickels said last month. “CCR enforcement is a private, contractual matter and could still be enforceable irrespective of what local governments can or can’t do.”
