Nov 21, 2022 - Business

Arizona cities are enacting new regulations on short-term rentals

Illustration of a welcome mat that is a one-hundred dollar bill.

Illustration: Maura Losch/Axios

Several Valley cities are taking advantage of a new state law that lets them impose restrictions on short-term rentals like Airbnb and Vrbo.

  • Gov. Doug Ducey signed the legislation in July and it went into effect two months ago.

Driving the news: Mesa, Paradise Valley and Scottsdale have enacted new regulations on short-term rentals over the past month. Tempe held public meetings last week to get input on a proposal its city council is considering.

Details: The law allows municipalities to crack down on short-term rentals used as party houses.

  • Cities can now require short-term rental owners to be licensed, for a one-time fee of up to $250, and to have at least $500,000 worth of liability insurance.
  • Owners must notify their neighbors before offering their properties for short-term rentals.
  • Licenses can be suspended for up to 12 months for three health, safety, noise, nuisance or other violations within a one-year period, and fined for lesser violations. They can also be suspended for felonious activity.

Why it matters: Short-term rentals are extremely popular and important for tourism, but cities' inability to regulate them or crack down on bad actors has been problematic and fueled opposition in some cities.

Yes, but: Scottsdale officials told the Arizona Republic the law still doesn't give them the authority they need to effectively regulate the industry.

Of note: Arizona hosts the Super Bowl in February, and countless Valley residents are expected to help meet the demand for lodging by renting out their properties.

Catch up quick: Ducey signed a law in 2016 prohibiting cities from banning short-term rentals or enacting their own restrictions and regulations.

  • In response to problems and complaints from residents and cities, lawmakers passed a bill in 2019 barring short-term rentals from hosting large events that would otherwise need permits.

What they're saying: "I think for the industry it's probably hard to ignore the issues with the party houses, the neighborhood nuisance issues," Tom Savage, the legislative director at the League of Arizona Cities and Towns, which supported the new law, tells Axios. "The complaints had been mounting since the 2016 law passed."

The other side: The short-term rental industry was supportive of the new law Ducey signed this year.

  • John Choi, then a spokesperson for Airbnb, said in a press statement the new law was "proof that elected officials and community stakeholders can come together to develop fair, sensible short-term rental rules that address community concerns and preserve the economic benefits of short-term rentals."
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