For communities like Sedona that have seen a dramatic increase in the number of short-term vacation rentals, there was hope during the current Arizona Legislative session that some relief may be in sight.
Depending on who you talk to, Gov. Doug Ducey’s signing of House Bill HB 2672 on Tuesday, May 21, gave those cities a bit of relief but not as much as many had hoped for.
“Although this bill didn’t include all that we want to accomplish, I believe that it was a significant win for Sedona,” Sedona City Attorney Robert Pickels said.
In terms of what this bill means for Sedona, Pickels said the city will have access to taxpayer information that has
previously been confi-dential.
“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.”
HB 2672 will go into effect 90 days following the adjournment of the legislative session.
Senate Bill 1350, which Ducey signed, went into effect more than two years ago. While the practice of short-term rentals was ongoing in Sedona — despite it being against city code — the number of rentals has increased to an estimated 1,100 in the city, as well as the Village of Oak Creek and Oak Creek Canyon.
“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 from Ducey to Arizona Secretary of State Katie Hobbs following the signing of HB 2672, he quickly 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.”
In terms of Ducey’s “party house” reference, Pickels said it’s really the activity, and not the house, that determines it.
The law will preclude the use of a residential property for nonresidential uses, including for a special event that would otherwise require a permit or license.
“The key difference with the new law is that responsibility will fall on the owner of the property, rather than just the occupants who are causing the disturbance,” Pickels said. “So, while the front-end enforcement will fall under code enforcement or the police, the ultimate penalties against the owner allowing the activities to occur is a significant enhancement.”
The new law restricts the maximum number of adult occupants allowed in the vacation rental property at any one time to not more than two adults per bedroom plus an additional two adults. For example, in a four-bedroom home, the maximum adults allowed is 10.
In addition, the number of adults cannot exceed the allowed occupancy after 10 p.m.
Ducey concluded his letter by stating that now that this enforcement component has been addressed, “I am hopeful additional legislation regulating short-term rentals will not be needed.” He also said that he feels this will have no impact on most short-term rental owners and that he is open to amending the law if it is applied too broadly.
“He seemed to go out of his way to remind people of why SB 1350 was originally adopted and that this is as far as he will be willing to go unless there is some strong evidence of other problems,” Pickels said. “In fact, he even mentioned the new law being applied too broadly, which seemed to be a caution against using the new authority too liberally.”
Ron Eland can be reached at 282-7795, ext. 122 or by email at reland@larsonnewspapers.com
