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Arizona Lawmakers Vote To Restrict Cities From Regulating Short-term Rental Properties


By Howard Fischer
Capitol Media Services
PHOENIX -- State lawmakers quashed the last remaining measure to rein in short-term vacation rentals Thursday concluding that it did so little as to not be worth the effort.
SB 1379 would have allowed communities to impose fines on owners who fail to provide information for police and others to contact them if there are problems with the tenants. It also would let them mandate owners maintain minimum liability insurance.

Potentially most significant, it would have meant an owner would lose a state license to do business following three violations of local ordinances within three months.

Rep. Jeff Weninger, R-Chandler, said those that could include things like noise or other violations. And that, he said, would allow cities to address the problem of "party houses'' popping up in residential neighborhoods.

But most of his colleagues were unconvinced, voting 43-17 to kill what Rep. John Kavanagh, R-Scottsdale, called a "Band-Aid'' fix to a much more complex problem.

With no more committees set to meet this session, Thursday's vote could end efforts this year to fix problems that were first created in 2016 when legislators, lobbied by Airbnb and other home-sharing apps, stripped cities of any right to regulate these vacation rentals.

The measure was sold to lawmakers as allowing individuals to rent out a spare room to make a bit of extra cash. In fact, that's how Airbnb got its name, the idea being an air mattress set up for a guest.

But the reality turned out to be something quite different.

In some communities, homes and apartments in entire areas have been bought up by investors to be converted into these short-term rentals, drying up the availability of housing for local residents.

"The worst-case scenario, of course, is in Sedona,'' Kavanagh said, where there had been testimony at hearings that up to 40% of residential rental properties are now vacation rentals. "It's even happening in my district in downtown Scottsdale.''

And then there's the question of how many individuals can be crowded into one of what amount to de facto unstaffed hotels.

"Everyone understands and appreciates the right of anyone to make money and to start a business and have a business flourish,'' said Rep. Aaron Lieberman, D-Paradise Valley.

"When they're doing it right next to your house and running a hotel in a residential neighborhood, that's no longer their right to run a business,'' he said. "That's taking away your right to your home.''

But Weninger said those aren't the complaints about short-term rentals that are coming in.
"What they're emailing us about and contacting us about is party houses,'' he said. And Weninger said SB 1379 would have given communities sufficient "autonomy'' to deal with them.

Most notable, he said, is that "death penalty'' provision for homeowners with three violations within a 12-month period. And he lashed out at colleagues as well as city officials who, in concluding this isn't enough, have effectively killed any chance of changes in the law this year.

"I know I'll have an email, ready to copy and paste, of why there's still party houses in people's neighborhoods,'' Weninger said.

But Lieberman said this isn't the answer, calling this "an industry bill.''

"The industry that created this problem are the same people who are behind this,'' he said, noting that the lobbyists for the vacation rentals supported this measure. "We need to actually take this problem on by getting back to what we do with everything else: letting our cities and towns regulate how businesses are zoned in their communities.''

That also was the assessment of Rep. Pamela Powers Hannley, D-Tucson.

`We need to tell the industry that it is time for regulation of short-term rentals,'' she said. We have to save our cities and towns from this.''

Kavanagh said the defeat of SB 1379 probably makes the industry think it is "in the driver's seat and they don't need to give anything up.''
But he said there are groups who are proposing to begin an initiative to put a more far-reaching proposal before voters in 2022.

"It probably would have a good chance of passing,'' Kavanagh said.

And if that group makes the ballot, he said that might bring the industry back to the bargaining table for fear of having something even worse from their perspective approved at the ballot.

In a prepared statement, Expedia Group which handles vacation rentals bookings said it was disappointed that lawmakers did not approve legislation it said would have "provided immediate tools for state and local authorities to address nuisance concerns associated with a small percentage of vacation rentals. The statement did not mention the issues of occupancy limits and concentrations in neighborhoods that was important to some lawmakers.

There was no immediate response from Airbnb.

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