PHOENIX — A legislative panel is debating whether to restore the right of cities and towns to regulate short-term vacation rentals, which legislators and Gov. Doug Ducey took away three years ago.
The idea already is getting a chilly reception from the governor.
Rep. John Kavanagh, R-Fountain Hills, who co-chairs the committee, said the law was sold to legislators as a way of helping homeowners earn some extra money by renting out a spare bedroom, perhaps to a visiting foreign student.
But Kavanagh — who voted against the 2016 law — said the reality is that a large share of the homes offered for rent through companies like Airbnb and VRBO are actually owned by people who don’t live there and purchased the house for the specific purpose of renting it out to people who may stay just a few days.
Sen. Kate Brophy McGee, R-Phoenix, said having short-term rentals in what had been a neighborhood of owner-occupied homes means the people who live there year-round don’t know who is coming and going. The result, she said, is one man told her he’s not comfortable leaving his grandchildren outside.
“It changes the character of a residential neighborhood,” she said.
Matt Miller, an attorney for the Goldwater Institute, which advocates for limits on government regulation, brushed aside those concerns.
“Is that the role of government to come in and say that houses have to be owned by people who are going to live there for a year so that all the neighbors can know each other?” he said. “I don’t think that’s the role of government.” Brophy McGee said that misses the point.
“It’s understanding if you’re buying a property next to a hotel what you’re going to get, which is people coming, people going, different people,” she said. But Brophy McGee said the folks who are concerned bought their homes in areas specifically zoned for residential use.
Miller’s comments also drew an angry reaction from Rep. Isela Blanc, D-Tempe, who said there’s a world of difference between having neighbors who live there full-time versus absentee owners who create de facto hotels in residential areas, renting out the houses to different people on a daily or weekly basis.
“Why are my property rights less valuable than the person who is choosing to run a business next door to me without the proper zoning and consumer protections, neighborhood protections, neighbor protections?” she asked.
Miller was unconvinced.
“It’s not more valuable than yours,” he responded. “They can control your property and you can control yours.”
Kavanagh said the 2016 law has created another problem. He said entire neighborhoods in some communities have now been converted into short-term rentals, drying up the availability of affordable rental housing.
The solution in Kavanagh’s mind is to once again let local city and town councils decide what restrictions work best.
That could include limiting the number of short-term rentals, both in any specific neighborhood as well as overall in the community. Kavanagh said a limit on occupancy based on the number of bedrooms also makes sense.
But Ducey, who championed the 2016 law —and would have to sign any new restrictions —already is throwing cold water on such changes.
“We’re proud of the open-for-business reputation that Arizona has,” the Republican governor said.
Ducey is specifically opposed to the idea of local control on this issue.
“What we didn’t want is a patchwork of different laws throughout the state,” he said. “We think that’s bad policy. It’s not friendly to a growing economy.”
Ducey did, however, back down a bit when he signed a new law earlier this year restoring to communities the ability to crack down on what are considered the more blatant abuses.
It spells out that homes cannot be used for parties, restaurants, sales or other non-residential purposes and requires owners to provide a point of contact for police to call if there are problems. There also are fines for violations, potentially up to half the gross monthly proceeds after multiple violations.
Rep. Travis Grantham, R-Gilbert, said that gives cities and towns all the authority they need to enforce basic safety and health regulations, things like noise and trash.
But Kavanagh, who is a former police officer, said that’s missing a key point.
“It’s almost impossible to enforce these things,” he said. “Police officers have to witness violations. So when the police car pulls up, ‘Shhh, cops!’ Everybody’s quiet.”
The key, said Cal Sheehy, mayor of Lake Havasu City, is creating a balance between the rights of those who want to rent out their properties and those of their neighbors.
“There is a place in the market for vacation rentals if we as a city have the ability to manage those,” he told the committee. But that, Sheehy said, was stripped away by the 2016 law.
He also took issue with framing the debate as one over the rights of people to do what they please with their homes.
“This is really a zoning issue,” Sheehy said.
He said voters in his community specifically adopted a general land use plan in 2016 “to decide what’s best for their community.” That plan sets aside specific areas for commercial activities, including traditional hotels; areas for multifamily housing; and areas for single-family homes.
The answer, said Sheehy, “is having local solutions for each community.”
For Paradise Valley, Mayor Jerry Bien-Willner said the local solution is preserving the character of the community of about 5,500 households with a median value of $1.82 million, a character he said was laid out in its own zone plan of largely single family residential zoning.
In fact, he said, the only commercial properties in town are resorts. “They’re staffed and they’re regulated,” Bien-Willner told the committee.
He specifically objected to even saying the debate is about short-term rentals.
“I think it’s an unstaffed hotel,” the mayor said.
Randy Durow, who owns nine rental properties — seven are short-term rentals — said they fill a need, providing “a huge pool of other places to stay” when hotels are booked.
Durow acknowledged under questioning that he makes personal visits to each of his properties and limits the number of people who can stay.
The committee is set to have at least two more hearings before the Legislature reconvenes in January.
