The Sedona-Verde Valley Association of Realtors held a public meeting at the Cottonwood Recreation Center on March 6 to discuss the results of its newly completed study on the economic effects of short-term rentals in Yavapai County. The study was conducted by research firm RRC Associates of Boulder, Colo.
“We saw it as needed and necessary that we get some information that was accurate,” said Phil Terbell of SVVAR’s Government Affairs Committee. “I think the information you’re going to hear today is valuable information. It’s accurate information. Some of it to me was staggering.”
“Most people are having a conversation about short-term rentals from how they affect me,” said lobbyist Jack Greacen, SVVAR’s government affairs director. “There’s very little good data out there about it.”
STR Counts
Using information provided by the AirDNA analytics site, the SVVAR study concluded that as of July 2024, there were 5,432 STRs in Yavapai County and Sedona, of which there were 2,438 in Sedona, 895 in the Village of Oak Creek, 562 in Prescott, 150 in Cottonwood, 820 elsewhere in the Verde Valley and 567 elsewhere in Yavapai County. The study also estimated that there were 729 STRs in Sedona as of June 2017.
The city of Sedona’s official counts for STR numbers within the city were 1,138 in December 2018, 1,203 on Dec. 10, 2024, 1,157 on Dec 12, 2024 and 1,218 as of Feb. 28, 2025.
However, the SVVAR study noted that “some of this discrepancy appears to be for logical reasons — for example, AirDNA listings include some properties which aren’t required to have city STR permits — e.g., hotel units and timeshares, and units only rented for 30-plus day periods,” and that the “share of housing units which are STRs is likely somewhat overstated, since some units advertised on STR rental platforms are hotel units and other non-housing units.”
The SVVAR study placed the number of hotel rooms in Sedona at 1,533, based on date from real estate information company CoStar, while the Sedona Chamber of Commerce’s 2022 work plan placed the number of hotel rooms at 2,789, based on data from Smith Travel Research. At another point in the presentation, Greacen stated that the number of hotel rooms in Sedona was 3,934.
If the difference of 1,256 hotel rooms between the SVVAR study’s numbers and the chamber’s numbers is subtracted from SVVAR’s STR count of 2,348, the resulting number of STRs would be 1,092.
Greacen later noted during his presentation that the number of second homes in Sedona, according to U.S. Census data, is 1,196. The study also found that between 82% and 87% of STR owners block out days each year when their units are not available for rent, “most commonly owner use.”
“About 30% to 40% of STR owners who are individuals are planning to move to our communities sometimes in the next five years,” Greacen said. “They’re really just offsetting their costs by STR-ing that home for periods of time.”
“What we expect at some point here in the future is that — I don’t think this is actually too far off — is this sort of steady state of STRs within the community as a total percentage,” Greacen said, drawing a parallel with Summit and Pitkin counties in Colorado and Teton County in Wyoming.
STR Owners
The SVVAR study included surveys of current STR owners within the county. Owners reported that on average, their STR units were rented for 34.5 weeks out of the year, while they used their units for an average of 3.8 weeks per year as a vacation home for themselves and their families.
The study also surveyed STR owners on their likely courses of action if an STR ban were to be imposed. A total of 37% said they would “probably” or “definitely” sell their units under those circumstances. Twenty-nine percent said they would probably or definitely leave the unit vacant. However, only 7% said they would “definitely” and 11% that they would “probably” rent to locals. Thirty-six percent said they would “definitely not” and 25% that they would “probably” not rent to locals.
The study found that 37% of STRs in Yavapai County are owned by county residents, with another 3% owned by Coconino County residents. Another 22% are owned by Maricopa County residents, while 36% are owned by out of-state owners. Among the out-of-state owners, the most common state of residence, at 35%, was California.
“Ninety-two percent of STRs within Yavapai County are owned by one individual, a family, somebody who’s using their property,” Greacen said. “You hear a lot of opinions about short-term rentals are just investors coming into our community. There could be nothing further from the truth. Yes, there are those individuals, but ultimately this assumption has just been proven incorrect.”
STR Economics
The SVVAR study concluded that STRs were responsible for 4,978 jobs and $195 million in earnings within Yavapai County. Within Sedona, the study found that STRs generated $160,098,498 in revenue, or an annual average of $42,293 per unit, gener ating $11,206,895 in lodging taxes that accounted for 26.3% of the city’s total transaction privilege tax collections.
“[Sedona Mayor] Scott Jablow has talked about trying to cap the total number of STRs in the community at 5%,” Greacen said. “That ultimately results in a $10 million loss in general revenue for the community.”
Greacen estimated that of 2,240 jobs in Sedona directly connected to STRs, 1,859 would disappear if STRs were banned.
“When we start looking at regulations that would remove STRs from a community, the question becomes, what within a community is going to replace these dollars?” Greacen asked. “If you do away with [STRs], you’d have to double this number [of hotel rooms] in order to replace that economic sector.”When New York City banned standalone STRs, Greacen added, “hotel prices quadrupled overnight.”
“One of the questions always becomes, if we do away with short-term rentals, those homes will have to become affordable housing for the community,” Greacen said. For someone making $58,000 a year, able to afford a $207,530 home, “theoretically we have 142 of those homes in Yavapai County. All of the homes that fall into those price ranges are manufactured housing.”
Greacen said that housing prices are driven by three main variables: Unemployment, interest rates and median income, with low unemployment and interest rates and elevated median income corresponding to high housing prices and the reverse of those conditions to low housing prices.
Citing the example of Tahoe, which saw numerous property sales after banning STRs, Greacen asked, “Who bought those homes? Individuals with liquid net worths north of seven figures.”
“How do you change the target market of buyers for your community? Who is moving to the Verde Valley?” Greacen continued. “It’s second-home owners.”
“One thing that we have to start having a real cognizant conversation of is, does everybody who needs a home need 3,500 square feet?” Greacen also asked. “I grew up in a 1,200-square foot home.”
Home Prices
“The impact of short-term rentals on the value of a home in any community, in isolation, is less than or about one percent,” Greacen said, noting that more than 75 studies have come to the same conclusion. “You will see a 1% increase in rental prices within your community if STRs are allowed … This is the point. We’re not having an honest conversation.”
“Prices in Palm Springs are in freefall,” Greacen later said, attributing it to a “patchwork of regulation.”
“We can find anecdotal cases of people losing 30% of the value of their home,” he said.
“When you have STRs, they do go up,” Greacen later said of property values, citing Jackson Hole, Wyo., in which, within the city’s tourism districts where STRs are allowed, “property values are 27% higher than outside.”
“So what you’re saying is, short-term rentals have no impact on the increase of housing prices in a community unless you restrict them, and then it suppresses them?” Clarkdale Town Councilwoman Laura Jones asked from the audience.
“One hundred percent,” Greacen replied.
“You can’t say that there’s no impact from them on one side of the equation and then this devastating impact on the other side of the equation,” Jones said. “That just doesn’t math out.”
Greacen later clarified that the lack of change in home values in either direction due to STR status is seen in the absence of artificial boundaries created by local government regulation, such as caps or bans.
Public Expectation
“Somebody I know out there is going to find a page, find a statement, at the beginning of one of these chapters, and they’re not going to read the next 20 pages, and they’re going to walk off and they’re going to go, ‘This is the statement that I need, this is the proof that STRs are bad in my community,’” Greacen commented with regard to the expected public response to the study.
The full 163-page study can be viewed here.
Sedona-STRs-Final-Report-Jan-20-2025
