Nearly 100 Arizona communities have begun a new push for short-term rental control

Sourced By: azcentral. 

Local governments across Arizona are pushing the state to further regulate the short-term rental industry through three proposed changes in the law, which city leaders believe can help stop Airbnb-style businesses from claiming more homes in communities that are already struggling to provide enough housing for residents.

The proposal would give local officials the power to limit how many rentals can operate within their borders. It was unanimously backed by the League of Arizona Cities and Towns on August 31, a group made up of elected officials from 91 communities across the state.

By casting a "yes" vote, all of those local governments agreed to pitch in on lobbying state lawmakers to enact the new regulations during the next legislative session, which begins in January.

Specifically, the proposal includes rules that would allow local officials to:

• Put a cap on how much of their local housing market can be occupied by short-term rentals. A city might prohibit less-than-30-day rentals from taking up more than 10% of its houses, for example.
• Limit the density of short-term rentals by neighborhood. This is similar to the first proposed change but would apply to specific areas of a city so that whole neighborhoods aren't consumed by rentals.
• Require short-term rentals to be spaced out. Cities could require short-term rentals to be no less than three houses away from another rental property, preventing residents from being surrounded by the businesses.

The changes are primarily meant to combat housing shortages, which local officials partly blame on a 2016 state law that barred cities from regulating the short-term rental industry. It undid longstanding bans on the businesses in many cities and caused their number to skyrocket, leading to a wide range of problems, according to city leaders.

"Mayors throughout Arizona recite horror stories about (short-term rentals)," said Scottsdale Mayor David Ortega, whose city spearheaded the new proposal. "The undercutting of housing, shattered neighborhoods ... and undermining permanent resident population — which erode federal and state revenue sharing — are undeniable."

Arizona lawmakers returned some regulatory power to local officials last year by legalizing local licensing rules for short-term rentals. They also allowed cities to suspend properties if guests violated local rules, such as noise ordinances, but it left local leaders completely powerless to control the industry's growth.

The most recent figures indicate that short-term rentals now make up about a fifth of "vacant" homes in Scottsdale, the Valley's most unaffordable housing market. In Sedona, 16% of all homes have been converted into short-term rentals, gutting the city's housing supply and presenting massive problems for local businesses.

Proposal keeps local promise:Short-term rental reform lobbying ban divides leaders across Arizona

"Our workforce has been decimated ... You can't get people to take jobs because they can't find any place to live," said Sedona's Vice Mayor Holli Ploog.

She added, "Even the superintendent when he came here a few years ago, he had to stay at somebody's casita because he could not find a place to live. The head of the Chamber of Commerce, who was a new individual coming from out of state, could not find a place to live. He had to stay in a hotel."

That situation has played out "over and over again" as short-term rental companies bought up homes in Sedona that would typically go to permanent residents, according to Ploog. She said the situation disrupts the city's housing supply and contributes to the average home price reaching roughly $1.1 million there.

Scottsdale Councilmember Solange Whitehead cited the industry's impact on state-shared revenue, which is doled out to cities based on their populations. She believes short-term rentals sap that income "because it appears that our population is down, but it's because so many of our homes are not (occupied by permanent) residents anymore."

"People in Scottsdale and other communities want to have neighbors — they want their neighborhood to be a neighborhood," she told The Arizona Republic. "They don't want an auto shop next door, they don't want a tattoo parlor next door, and they don't want a hotel next door."