Tourists and visitors from around the world love travelling to the Phoenix valley for many reasons. Those regular travelers have allowed many real estate investors to turn short-term rentals with companies like Airbnb into their main source of revenue on residential properties. Obviously, the global pandemic has impacted the short term rental market in many adverse ways. There have also been multiple pieces of legislation in Arizona over the past few years and some potential new laws that have continued to impact the short term and Airbnb rental market. To help provide some clarity on the issues, RSN Law put together a full breakdown of the changes in short term rental and Airbnb laws in Arizona.
Arizona Legislation for Short Term Airbnb Rental Laws
In 2016, Arizona Governor Doug Ducey signed Senate Bill 1350 into law. This legislation established the rules and regulations governing short term rentals and the use of services like Airbnb in the state. The central point of the short term rental law was to make sure that property owners were not prohibited by their city or municipality from renting their home on a short term rental service.
The law did include some exceptions that allow for the enforcement of zoning and residential use restrictions to limit the use of the property to prescribed proposes. The law also has exceptions for prioritizing public health and safety protections and protecting noise ordinances and property maintenance requirements.
Short Term Rental Legal Issues and Consequences of the Airbnb Economy
The enactment of Senate Bill 1350 was praised by many, including the Travel Technology Association, as forward-looking policy that would benefit consumers, individual property owners and small businesses in the state, and the state tourism industry as a whole. Unfortunately, there were many unintended consequences for individual homeowners that lived near short term rentals and neighborhoods and cities around the valley. If you bought your home in a family-friendly neighborhood and there are suddenly parties running late into the night next door, then it’s easy to see how many individuals and neighborhoods will start to take issue with laws that prevent any restrictions on short term rentals and use of Airbnb in their area.
There are obvious economic benefits for individual proprietors and real estate investors in the state, as well as expanded accommodation options for regular travelers to the Phoenix valley. There are also obvious issues that neighborhoods, cities and municipalities are experiencing from regular disturbances and issues with damage and trash being left behind on a routine basis. This conflict has naturally led state legislators to consider amendments to Senate Bill 1350 that attempt to create a balance between the two interests.
Legislative Initiatives Related to Arizona Short Term Rental and Airbnb Laws
The Arizona legislature passed and Governor Ducey signed House Bill 2672 into law in May 2019. This bill added some new regulations related to short term rentals in Arizona. All property owners and businesses looking to utilize short term rental services like Airbnb and VRBO are now required to have a transaction privilege tax license. There are also codified civil penalties for violations of acceptable uses for short term rentals. Cities and municipalities in Arizona are also able to require property owners to provide best contact information for any noise or disturbance complaints on their property. Local governments can also restrict short term rentals from being used for large events that typically require a permit.
Although House Bill 2672 added some regulations to short term rentals, there are many in the real estate industry and state legislature that feel it did not go far enough and a full repeal of Senate Bill 1350 should still be considered. Current legislation seems focused on added rules to clarify and strengthen the ability for local governments to regulate the new short term rental industry.
Impact of COVID-19 Pandemic on Short-Term Rental Market
Recent studies have revealed that most property owners utilizing short term rental services are local residents and small businesses. In May 2020, the advocacy group Rent Responsibly released a Covid-19 Impact Report after they surveyed more than 1400 hosts around the country. They found that most of the short-term rental market was made up of individual investors and small businesses that owned five or less properties. They also detailed the many ways that the pandemic has impacted the industry. While Arizona continues to have many visitors that utilize short term rentals, these individual proprietors and businesses in other states have had to look to mid to long term rentals for revenue on their properties.
Navigate Short Term Rental Laws in Arizona with Experienced Real Estate Attorneys
The attorneys at RSN Law have closely followed all the changes to short term rental laws and those proposed recently in Arizona and can assist with legal issues resulting from the operation of an online lodging business. Our firm has also defended the rights of homeowners and property owners impacted by short term rentals in violation of city ordinances and state regulations. Call RSN Law today at 480-712-0035 to schedule a meeting with our experienced real estate attorneys or use our contact form online.
RSN Law intends this article to be for informational purposes, not to be relief on a specific legal matter, and does not create an attorney-client relationship.