Sep 1, 2023 - Politics

Short-term rental critics want more regulatory power for cities

Illustration of a key suspended in mid-air by pieces of taught red tape.

Illustration: Aïda Amer/Axios

Advocates of new restrictions on short-term rentals (STRs) are gearing up for the 2024 legislative session when they hope Arizona lawmakers will give cities more power to regulate companies like Airbnb and VRBO.

Driving the news: Scottsdale is pushing proposals that would permit cities to cap the total number of STRs like Airbnb and VRBO, limit the density of STRs in certain areas, and mandate distance requirements.

  • Mayor David Ortega told Axios Phoenix the proliferation of STRs has "shattered our peace of mind" and taken up a lot of housing stock.

The latest: The League of Arizona Cities and Towns will include Scottsdale's proposal as part of its 2024 legislative agenda.

What's next: Rep. Selina Bliss, R-Prescott, is meeting with stakeholders, including mayors and city council members from Sedona and Lake Havasu City, and talking with House leadership as she works on a sequel to her 2023 bill that died without being assigned to a committee.

  • Some possibilities for next year's bill are to allow cities to use zoning to determine where STRs are permitted or create a different zoning class for those who own more than two or three STRs to avoid harming "mom-and-pop" operations.
  • Bliss hasn't talked with Scottsdale about its plan but told Axios Phoenix her proposal will likely be in line with the city's proposal.

Yes, but: Bliss hasn't decided yet whether to include a population cap on her bill that would limit restrictions to smaller cities or rural Arizona, though she's open to the possibility if necessary.

The intrigue: Before Bliss and other supporters in the Legislature can begin counting votes, they need leadership's backing.

  • House Speaker Ben Toma didn't assign Bliss' bill to a committee this year, ensuring it died without a hearing.
  • Toma and Senate President Warren Petersen didn't respond to inquiries from Axios Phoenix.

Meanwhile, Gov. Katie Hobbs told reporters last week she hadn't seen Scottsdale's proposal, "But I think that going back to where cities could regulate the industry in their boundaries is something that I would support."

The other side: Lobbyist Tom Farley, who represents the Arizona Association of Realtors, said the group would have to see any proposed legislation before taking a position, but it has historically opposed "things like caps that take away from people's private property rights."

  • Barry Goldwater Jr., who represents the Arizona Vacation Rental Association, noted the Legislature has passed other measures in recent years to permit cities to regulate STRs.
  • "You can legislate it to death and no one wins," Goldwater said, though he conceded Sedona has a problem with the number of STRs in its community.

Flashback: Former Gov. Doug Ducey signed legislation in 2016 preempting cities' ability to regulate or restrict STRs.

  • After problems arose, he signed a bill in 2019 to crack down on "party houses" and another last year allowing cities to require licensing for STRs and to penalize owners for health, safety, noise, nuisance or other violations.

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