short-term vacation rentals

State lawmakers on Thursday killed one of multiple efforts to reduce neighborhood nuisances caused by short-term vacation rentals offered through Airbnb, VRBO and other companies.

The bill from Rep. John Kavanagh, R-Fountain Hills, would have let municipalities put restrictions on vacation rentals. It would have allowed them, for example, to require posting the owners’ contact information on the front door or the installation of sound-monitoring equipment.

It was defeated in the House, 25-35.

Democrats at the Capitol largely have supported a crackdown on short-term vacation rentals, but the majority of House Democrats voted against Kavanagh’s bill on Thursday because it wasn’t pure enough for them.

Some said they prefer allowing municipalities to set their own custom regulations for vacation rentals, which Republicans and Gov. Doug Ducey prohibited with a bill in 2016.

Republicans have been less eager to regulate vacation rentals after that 2016 effort, but some who have heard complaints from voters about loud parties, rude and drunken behavior and other issues have proposed letting municipalities put limited rules on rentals.

Eleven Republicans voted for Kavanagh’s bill on Thursday, more than enough to move the bill had Democrats voted with them.

“This is exactly the problem we have here at the state Legislature,” said Rep. César Chávez, D-Phoenix. “We have entities that come lobby us and we allow them to go on without regulation. Then we come back a couple years later and create study committees.”

He said people concerned with short-term rental properties were ignored when Republicans moved the bill in 2016.

“Now we are here because Paradise Valley is saying there is too much noise,” he continued, saying that he would oppose the bill until there was a measure that would address the concerns of all affected communities.

Rep. Nancy Barto, R-Phoenix, said she supported some increased regulation on the industry.

“I really was excited when we passed the ability for Airbnb and such to do business here without a lot of regulation, but we’ve got to find balance here, we really do,” she said Thursday.

Rep. Isela Blanc, D-Tempe, introduced a bill that would repeal the 2016 law prohibiting municipalities from cracking down on vacation rentals, but it didn’t even get a hearing, dooming it. She was a reluctant vote in favor of Kavanagh’s bill.

“I understand Rep. Kavanagh is trying to do the very best … but it is not just party houses in places like his community and Sedona,” she said. “It is an overarching problem in the state of Arizona.”

Kavanagh, who opposed the 2016 bill, wanted to give municipalities the ability to require the property owners’ contact information be posted on the front door or another visible area accessible to the public.

His bill also would have allowed municipalities to:

• Limit the number of adults at a rental.
• Require equipment that monitors and detects noise and notifies the owner if noise is unreasonable or in violation of a noise ordinance.
• Prohibit smoking outside within 100 feet of a residence.
• Prohibit occupants from parking on public or private streets if on-property parking is available, subject to $100 a day fines for a violation.
• Allow municipalities to levy $50 a day fines for each day the occupancy or use of a rental violates the law.

Kavanagh initially proposed a restriction on renters checking in without being met by someone in person, but that was removed in an amendment.

“I’m looking to give a little bit of relief to people who live near these houses,” Kavanagh said when trying to rally support from fellow Republicans at a recent caucus meeting.

He called it a “zero footprint” bill.

“I’m trying to make them as invisible as possible,” Kavanagh said. “We don’t want to have an anonymous rental where you run into problems.”

Another bill’s fate questionable

Phoenix resident Sarah Carlblom (center) speaks to a rally for owners of vacation rentals at the Arizona Capitol on Feb. 20, 2020. (Photo: Ryan Randazzo/The Republic)

Another effort to address vacation rentals from Sen. Kate Brophy McGee, R-Phoenix, won an initial vote in the Senate last month but has yet to go to a full vote, often a sign it doesn’t have support to pass.

Her bill advanced on a day when about 50 property owners organized by vacation-rental websites spoke out at a morning news conference and in sometimes-teary testimony before lawmakers, pleading to let them continue earning money through rentals.

Many other people, mostly those who live by noisy rentals, also testified that day.

Brophy McGee’s Senate Bill 1554 would prohibit a “corporate entity” from operating a vacation rental in a residential zone unless authorized by a municipality.

This provision would limit investment companies that buy up multiple properties to be used as rentals while protecting family rentals. Some opponents said they have incorporated their small rental businesses, however.

Yet another bill affecting the industry has made it through an initial vote but not a full vote from the Senate.

Senate Bill 1490, sponsored by Sen. J.D. Mesnard, R-Chandler, would reclassify short-term rentals to class 1 property, which is the same classification as businesses such as shopping centers. Class 1 property is assessed for tax purposes at a rate of 18%.

Most single-family homes are assessed taxes as class 3 property in Arizona, and that class is assessed for tax purposes at a rate of 10%. Short-term vacation rentals are listed as class 4, along with nursing homes and child-care centers, and also assessed at 10%.

Municipalities and counties have shown support for that bill, and it has not attracted the opposition faced by the proposals from Kavanagh and Brophy McGee.

Also, keep in mind, that HOA may ban short-term vacation rentals.  Those who wish to invest in these properties should verify the HOA documents.