Arizona lawmakers are set to resume the debate over what’s to be done about short-term rentals (STRs), also referred to as “Airbnbs” after the largest company in the market.
Rep. Walt Blackman, R-Snowflake, is sponsoring legislation that would restore local powers that municipalities had before Gov. Doug Ducey signed a 2017 bill preempting much of what’s included in the current legislation.
Other legislation would further tighten regulations but keep many of the preemptions in place.
It’s an issue many Arizona lawmakers say is the most common complaint from constituents. The legislature has yet to come to a consensus on it since passing 2019 legislation allowing cities to take some steps aimed at cracking down on unruly renters.
The argument, as Blackman said, boils down to property rights versus local control.
“We don’t want the [federal government] in our business,” he told The Center Square. “There’s no difference when talking about local matters happening at a local level. They want to be able to make those decisions on regulating Airbnbs.”
According to AirDNA, each of the Valley’s major cities have hundreds, if not thousands, of rental listings between Airbnb and VRBO.
In Sedona and Flagstaff, AirDNA shows 2,539 and 1,819 active rentals respectively. Tucson has 3,319 listings. Phoenix has 4,200. Scottsdale has 5,321.
In 2021, lawmakers rejected legislation that would have taken additional steps but was seen as inadequate by certain members on both sides of the aisle.
Senate Bill 1379 would have allowed for a three strikes-style system that would result in a one-year suspension of a rental’s transaction privilege tax license. The three fines would have had to have taken place over 12 consecutive months.
A spokesperson for Airbnb responded to a request about the ongoing discussion over regulation of STRs.
“We encourage Hosts in Phoenix to consider their responsibilities, and we provide our local community with guidance to understand the laws in their city. In addition, we supported SB1379, a bill introduced in the state legislature earlier this year that would have given jurisdictions more powerful tools to protect quality of life and public safety – including the ability to levy increased penalties against operators who failed to register, among other violations.”
The rental service facilitator has taken steps in recent months to prevent the house parties that have given many neighborhoods trouble. In July 2020, the company removed 50 listings in Arizona deemed common party house listings.
In addition to better identity verification, Airbnb also bans guests without a track record of positive reviews from making one-night reservations in entire home listings over holidays. The ban, the spokesperson said, has drastically cut down on parties over holiday weekends.
Legislation Ducey signed in 2019 allows municipalities to impose fines for unlicensed STRs, but the punishment appears to have gone largely unused since it took effect in 2020.
The new tools resulted in local ordinances that required STRs to register with their respective municipalities, something leaders such as Phoenix Mayor Kate Gallego tout as accomplishments.
However, a public records request to the City of Phoenix found it hadn’t once followed through with the process involved in issuing fines for unregistered STRs. The Arizona Department of Revenue confirmed it hadn’t collected any fines finalized by the city as of December.
A spokesperson for the City of Phoenix explained the process in detail.
“The Neighborhood Services Department (NSD) does not impose fines on any entity or property owner,” said city Public Information Officer Kristin Couturier. “Any fines stem from the judicial process. If a property owner failed to comply with a request from NSD to register their property with the city as a short-term rental, NSD would first issue a Notice of Violation. If that notice expired without compliance, NSD may then issue a civil citation for the code violation, which would be adjudicated in court.”
The court can impose a monetary fine only if it first finds the rental property owner “responsible” for the citation, Couturier said. Since the ordinance passed, she said NSD has issued 116 Notice of Violations, all of which were resolved before a fine was issued.
Scottsdale – which AirDNA estimates added 1,597 new listings from the last quarter of 2020 to the last quarter of 2021 – added only 698 new registrations between January and September, the last month of data available.
A Scottsdale city official said in December that they had yet to see any fines through, though the legal process was effective in convincing properties to register.
“There are some statutes on the book but they’re fighting with one hand tied behind their back. I’m not against Airbnbs but we need to let localities regulate themselves,” Blackman said.
Blackman estimates that 40% of the total complaints to his office are regarding problem rentals.
