The Arizona State Senate is considering legislation that could reshape the state’s short-term rentals, which became legal by the passage of Senate Bill 1350 in 2016.
While it would be very easy to point at SB1350 and claim, “that’s the state law that destroyed Sedona’s affordable housing,” that claim would be erroneous.
Short-term rentals have become the bogeyman for all of Sedona’s ills, at least among the residents who have moved to the city in the last three to five years. Yet Sedona’s lack of affordable housing has been a perennial problem for decades primarily because Sedona is a municipal island surrounded by U.S. Forest Service land that, under USFS regulations, cannot be annexed into developable land.
Sedona has limited acreage for homes, apartments hotels, businesses, roads and open space which raises the cost to rent and own these parcels. As we reach build-out, we will be at the extreme limit of where and what we can build.
Vacation rentals have long existed in Sedona, mostly illegally and/or under the radar. I have lived adjacent to or one house down from three short-term rentals — that I knew about — since moving to Sedona nearly 20 years ago.
After the passage of SB1350 in 2016, the state denied towns, cities and counties the right to regulate short-term rentals in any way and these places went above board, seemingly increasing overnight.
Additionally, many residents who had rented out mother-in-law units or additional rooms to friends, family or visitors via Craigslist and other such websites turned these into clear and unabashed profit-making vacation rentals via the Airbnb or VRBO websites.
Still, more homeowners saw an opportunity to turn their unused room or a second home into a temporary rental for tourists.
All of the above were the intent of SB1350, according to proponents, and had vacation rentals remained a local cottage industry — literally — and been taxed appropriately, most residents wouldn’t have too much of a problem with them. But that’s not what happened.
Although these formerly secret units did not substantially increase vacation rentals alone, Sedona has seen a major uptick in the number of legal short-term rentals with some real estate agents primarily selling them instead of traditional homes.
Of course, blanket laws rarely work as intended and people found ways to abuse SB1350 for pure profit. Out-of-the-area investors bought homes, kicked out tenants and turned them into de facto hotels. Others decided to buy open parcels or old homes and demolish them and build to-spec homes designed explicitly as de facto hotels.
Senate Bill 1554, introduced by Arizona Sen. Kate Brophy McGee [R-District 28] and cosponsored by Sens. Sean Bowie [D-District 18], John Kavanagh [R-District 23] and Heather Carter [R-District 15], aims to curb these abuses.
The bill would not reimpose a ban, but would prevent new de facto hotels from being built by treating short-term rentals separately from long-term rentals; limiting certain rentals that are not an individual’s primary or secondary residence to not more than one rental in a 30-day period unless the city or town allows it; prohibiting the advertisement of short-term rentals that exceed occupancy limits; allowing cities and towns to regulate short-term rentals if the rental property is not a person’s primary or secondary residence; allowing cities and towns to enforce occupancy limits for short-term rentals; specifying that a corporate entity is not a natural person and vice-versa, thereby requiring a human person to be listed as a owner; and suspending the taxing license for repeat violators, which could terminate a short-term rental for a reckless owner.
Whether you oppose vacation rentals wholesale or are a local vacation rental owner who plays by the rules and respects the integrity of neighborhoods, we encourage you to contact individual state lawmakers by email and phone and voice your views.
Senate Commerce Committee members are Chairwoman Michelle Ugenti-Rita, [R-District 23], Vice Chairman Tyler Pace [R-District 25], Tony Navarrete [D-District 30], J.D. Mesnard [R-District 17], David Livingston [R-District 17], Sally Ann Gonzales [D-District 3], David C. Farnsworth [R-District 16] and Sean Bowie [D-District 18].
The Senate Commerce Committee will hear the Senate Bill 1554 on Thursday, Feb. 20, 2020 at 8:30 a.m. in Senate Hearing Room 1 at the Arizona Capitol.
Christopher Fox Graham
Managing Editor
