Lawmakers Eye More Local Control Of Vacation Rentals in Arizona
By Howard Fischer
Capitol Media Services
PHOENIX -- Saying a 2016 law on vacation rentals hasn't worked out as promised, members of a House panel voted 8-5 Wednesday to give cities more control of how and where they operate.
HB 2481 would allow city and town councils communities to impose limits on how many people can be in a short-term rental based on the number of bedrooms.
Potentially more significant, Rep. John Kavanagh, R-Fountain Hills, said his legislation would permit cities to enact zoning restrictions that could limit the number of these short-term rentals in any one neighborhood -- or entirely within the community's borders.
The 2016 law effectively stripped cities and counties from enacting any new ordinances that limit short-term rentals. It also overruled any existing rules already in effect.
"It was sold as the elderly couple, empty nesters with the extra bedroom, who could make a few extra bucks renting out their room to tourists or whatever,'' Kavanagh said. "That seemed benign,'' he said, what with the owners on the premises to control any problems.
"But in reality of short-term rentals are such that an investor can make far more money buying a house and renting it out as a hotel -- as a horizontal, decentralized hotel -- than renting the house out for long-term rental,'' he said. Kavanagh said the same thing happened as apartment buildings were bought up to convert the facility to a de-facto hotel.
"When the owner is not present, you have real problems,'' he explained, with no one there to monitor behavior and an inability to screen every prospective tenant.
"So you wind up with bad problems that create a lot of problems for the neighbors,'' Kavanagh said.
That, however, isn't the only issue.
Kavanagh said it has created problems in places like Sedona where he said 40% of the available rental units are now vacation properties, "driving up the prices of all rentals and making it impossible for city employees or even business employees, store employees, to live in the town.''
Sedona Mayor Sandy Moriarity underscored the problem for members of the House Committee on Government and Elections. She said her community has 723 short-term rentals within the city limits and another approximately 400 just outside.
There have been efforts by companies like Airbnb and VRBO to curb some practices, tightening up on efforts by people to rent properties as "party houses'' for large numbers of people. But that has left people like Paradise Valley Mayor Jerry Bien-Wilmer unimpressed.
"The industry's attempts as self-regulation do not work,'' he said. And Bien-Wilmer rejected contentions that what Kavanagh is proposing will mean an end to short-term rentals.
"The industry has been doing just fine everywhere there's local regulation,'' he said. "We're not doing anything crazy here.''
But Rep. Jake Hoffman, R-Queen Creek, said the whole concept is offensive.
"Property and the ability to use one's property to its fullest extent, and to the fullest enjoyment, is your right,'' he said. And Hoffman said there are enough ordinances already in place to deal with "bad apples.''
Kavanagh, however, said that Hoffman is wrong.
"There is not an absolute right to do whatever you want with your property,'' he said.
"If there's a vacant lot in a residential neighborhood, maybe next to your house, and somebody buys it, they shouldn't be allowed to open up a McDonald's,'' Kavanagh continued. "When you invest your life savings in home in a residential neighborhood, you have a right to make sure that it stays residential.''
Hoffman was unconvinced that a short-term rental interferes with the rights of a next-door neighbor.
Kavanagh said that happens when there's noise and no one there to stop it. And he said having the police cite a short-term tenant probably is meaningless, as that person will go home to another state.
Rep. Kelli Butler, R-Paradise Valley, said that this is about more than the rights of people and investors who buy up property with the intent of creating short-term rentals in residential neighborhoods. She said it protects homeowners and residents "who are feeling that their property rights are being trampled.''
Kavanagh said his legislation would have no effect on individuals who are owner-occupants and rent out rooms in their own homes. He said they are not the problem.
And he promised to amend his legislation when it goes to the House floor to "grandfather'' in any existing short-term rentals so they could continue to operate if and when his measure becomes law.