Yavapai County District 3 Supervisor Randy Garrison made it clear that the issue of short-term vacation rentals is one the state needs to address as soon as it can.
On Dec. 9, Garrison and his fellow Yavapai County supervisors met with Arizona Senate President Karen Fann [R-District 1] and Arizona Rep. Steve Pierce [R-District 1] to discuss a variety of topics prior to next year’s legislative session.
About 20 minutes of the 90-minute meeting was devoted to short-term vacation rentals.
“Sedona and the Village of Oak Creek are significantly impacted by the short-term rental problem we have,” Garrison said. “Page is impacted by this and we’re seeing it around the state. The problem is, we have companies that are moving in and making short-term vacation rentals a business.”
The state’s 64 county supervisors in its 15 counties are proposing legislation that would allow local communities to regulate investor-owned short-term vacation rentals to mitigate the impact on residential neighborhoods. It would clearly define commercial activity within statute to create equity and uniformity with traditional hotels and the short-term rental industry.
“This would allow us to go in and identify those who have multiple short-term rentals, at which point we can change the tax exemption on that property from residential to commercial,” Garrison said, stressing that this is not a zone change issue.
“We have different things in place currently that allow us to identify residential long-term use of a property but there’s nothing on the books, currently, that identifies short-term rentals. The rule was put into place with no real definition of what a short-term rental is or how to identify it.”
Garrison went on to say that because of the number of vacation rentals in Sedona and VOC, it has “decimated” the workforce in the area and disallows people to live in the community in which they work.
Yavapai County District 2 Supervisor Tom Thurmond said the original intent of Senate Bill 1350 was to help residents make a few extra dollars by renting out a room on occasion or a “casita” — which he agreed with.
“Then you get the big corporations that create LLCs for every one of these and you can’t hardly follow who owns them,” Thurmond said. “They’ll come in and buy up 10 or 20 of these places. It should be commercial. If you do something like that, it should be commercial. Come on, folks.”
Following the signing of SB 1350 three years ago, local governments were allowed to continue to regulate vacation rentals for the protection of public health and safety; enforce residential use and zoning ordinances and limit or prohibit the use of a short-term rental for specified purposes. But that’s about it.
“The business model for short-term rentals has shifted the market to operate more like a traditional short-term lodging establishment, renting from two to seven days, with several different sets of guests rotating in and out of the residence over the course of a month,” the legislation from the supervisors states.
It goes on to state that earlier this year the Arizona State Legislature recognized that the situation had gotten out of hand and passed House Bill 2027, which specified a short-term rental may not be used for non-residetial uses including special events that would require a permit or license.
It also allowed local governments to require these owners to provide contact information for someone who is responsible for responding to complaints in a timely manner. Some communities saw this as a small victory. An online lodging operator or vacation rental owner is required to be registered with the Arizona Department of Revenue to file and pay all online lodging transaction privilege taxes.
