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Senate votes to prohibit Airbnb restrictions

Airbnb is valued at $25.5 billion, and users can access spots in more than 190 countries, according to the company’s website.  (Photo courtesy of Gustavo da Cunha Pimenta via Flickr)

Airbnb is valued at $25.5 billion, and users can access spots in more than 190 countries, according to the company’s website. (Photo courtesy of Gustavo da Cunha Pimenta via Flickr)

State senators voted Tuesday to block local governments from restricting the ability of property owners to rent out their homes — or even their couches — for short-term or vacation rentals.

The last-minute provision was added to legislation designed to eliminate the requirement for homeowners to collect local taxes every time they rent out a room or a house through “sharing” online services like Airbnb. Instead, it would be the responsibility of the online firms to collect the applicable taxes and forward them to the Department of Revenue which would send them to the affected jurisdictions.

But Sen. Debbie Lesko, R-Peoria, tacked language onto SB 1350 which says cities, towns and counties cannot prohibit or restrict these rentals simply because the property is not classified as a hotel.

The move is in line with efforts by Gov. Doug Ducey to “modernize” the state’s economy.

“Arizona should be to the sharing economy what Texas is to oil and what Silicon Valley used to be to the tech industry,” the governor said in his State of the State address.

Ducey specifically mentioned rideshare companies like Uber and Lyft and the efforts by his administration to free them from various regulations. The idea of having a single point of collection for taxes was designed to make it easier for homeowners to rent out space without worrying about running afoul of local tax collectors.

But Sen. John Kavanagh, R-Fountain Hills, said Lesko’s amendment goes farther by opening the door wide to temporary rentals.

“I didn’t move into a neighborhood to have the house next door to me turned into a weekly rental property,” he said in casting the lone dissenting vote against the measure.

Kavanagh said he’s not against long-term rentals, even to “snowbirds” who move into a residential neighborhood for a month or two.

“I have no problems with that,” he said.

“But we had a problem in Fountain Hills where people were renting houses and they were allowing individuals through services like this to rent them for the weekend when there are big golf or other events in town,” Kavanagh said. “And a whole bunch of people come and they party at the house, they arrive on Friday and they leave on Sunday.”

Ken Strobeck, executive director of the League of Arizona Cities and Towns, said his organization generally opposes measures which limit local control. But he said Lesko agreed to build in some protections to preserve the ability of communities to protect public health and safety.

For example, the legislation requires that rentals conform with fire and building codes as well as transportation regulations.

It also says that not every vacation rental is free from regulation. Local government remain free to prohibit short-term rentals for housing sex offenders, selling illegal drugs or creating pornography or obscene materials.  Also off limits would be nude or topless dancing or other “adult-oriented businesses.”

David Drennon, executive vice president of the Arizona Lodging and Tourism Association, said late Monday that there may need to be changes in the legislation to ensure it is fair to all concerned.

“We absolutely support Airbnb,” he said. “It brings competition to the marketplace.”

But Drennon said what the legislation fails to address are abuses of the system.

“There are people who are buying multi-unit apartment housing and basically trying to operate them as a hotel,” he said. “They’re skirting the law.”

For example, Drennon said, a hotel would have to comply with requirements of the Americans with Disabilities Act to ensure that there are rooms and bathrooms that are accessible to people in wheelchairs.

That requirement does not exist for someone who is simply renting out a room in a home. But Drennon said that exemption should not exist for someone who really is in the business of running something that is a hotel in every way but a name.

Drennon said his organization will look for changes when the measure goes to the House following a Senate roll-call vote.

3 comments

  1. In all fairness, the Legislature should also pass a law that makes it illegal for the state to prohibit the use of alternative governments that can better manage Arizona, in full or in part, particularly governments that will not:

    A. Sell out to every possible special interest
    B. Legalize predations upon the environment and the people
    C. Discriminate among the citizens on the basis of religion, ethnicity, or political persuasion

    And above all,

    D. Make Arizona state government — and our state in general — laughing stocks in the eyes of the nation.

    … All in the interests of greater competition and value for our citizens, of course.

    (I know, it hurts more in Phoenix when it’s the Legislature being legislated out of its job, and not local governments — but it is in the interest of each and every Arizonan, so too bad.)

  2. As both a hotel owner and an airbnb host, I have to make some points here…. First, Airbnb enables cities to fit more visitors in the city when there are peak compression periods, peak season months, peak event periods. If there are no more hotel rooms, no more people can visit, which stifles economic growth in the region. This means more money for retail shops, tour operators, local attractions, restaurants, cafes, bars, etc., etc. Airbnb also enables people to continue to live in their home while occasionally renting it out… this enables these local property owners to have more money in their pocket, which they in-turn spend on things like their mortgage (reducing foreclosures), and spending the extra disposable income on local businesses. The most important thing to me as a hotelier is that Airbnb prevents the overbuilding of hotel rooms to meet the supply in peak months, only leaving hotels empty during off-peak months – which then leads to hotels ‘racing to the bottom’ when it comes to room rates… rates become so low that it makes more financial sense for most hoteliers to close their hotels and put their employees out of jobs than to keep their doors open… this is why there are mass layoffs of hotel employees during off-peak months… not good. And it’s also important to consider what happens when too many hotels are built… hotels are usually ‘block killers’ – these are pieces of land that could better serve local residents by having more housing, more retail, more restaurants instead of just another building where most of the square footage is off-limits or never used by locals. So again, as both a hotelier and an Airbnb host, I think that the sharing economy is fantastic, it offers a lot of benefits to everyone. I also think that Airbnb is a great rental platform for long-term rentals (my Airbnb properties are all 30+ day rentals) that wouldn’t go to hotels anyways… think about it – if you rent through craigslist you don’t know who you’re going to get and your new tenant’s last landlord is probably going to say your new renter was amazing, especially if they’re trying to get rid of that renter…. but with Airbnb (similar to Uber), there’s a multi-step verification process… there’s $1M in insurance provided… there are deposits… money is pre-paid… and most of all, there’s a two-way review process where you know about the renter from their previous stays at Airbnb properties, and the renter knows about you as a landlord. The final thing to consider (sorry for the long rant) is that Airbnb properties need to remain clean, need to be attractive, need to be magazine-ready…. so you know that your neighbor’s place is probably very, very clean, free of pests, and doesn’t have horrible neighbors you’re stuck with… in fact, the best thing is that even if someone is bad, they’re gone in a few days… but most Airbnb guests are people who are visiting, eating out most of the time, and they usually are the only people there… so the wear/tear on the property is much less too. Thanks for listening if you got this far LOL… Ben Bethel, Owner and GM, The Clarendon Hotel and Spa…

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