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Governor signs bill that could turn neighborhoods into vacation rental zones

Gov. Doug Ducey explains his decision to sign legislation blocking cities from regulating vacation rentals. With him is Sen. Debbie Lesko who sponsored the measure.  (Capitol Media Services photo by Howard Fischer)

Gov. Doug Ducey explains his decision to sign legislation blocking cities from regulating vacation rentals. With him is Sen. Debbie Lesko who sponsored the measure. (Capitol Media Services photo by Howard Fischer)

Gov. Doug Ducey is defending a new law he signed that allows people with one home — or dozens — to rent them out for weekends no matter what local cities and the neighbors think.

The law that takes effect Aug. 6 overrules any existing or future city ordinance that limits short-term rentals. The only thing communities could regulate are things like noise and parking rules.

Ducey, in a ceremonial bill signing Wednesday engineered by Airbnb, one company that arranges such rentals through its internet application, touted it as good not only for those seeking alternatives to hotels and resorts but also for the homeowners who can make some money.

“For thousands of hardworking citizens, opening up their home to out-of-state guests provides the financial breathing room they need to provide for their family or enjoy an extra expense that they otherwise couldn’t afford,” the governor said.

The law, however, covers more than those renting out a bedroom, or even their whole home. There is no limit on the number of properties an investor could buy and days a home could be rented out — and all in the same residential area — potentially turning the whole area into a vacation rental zone. But the governor brushed aside questions of whether that could change the character of neighborhoods.

“I’m not going to answer these hypotheticals,” Ducey said.

“And the markets adjust,” he continued. “Somehow we survive people making entrepreneurial decisions and innovative aps like this, provide convenience and cost-sharing opportunities.”

The League of Arizona Cities and Towns agreed not to oppose the measure after it was amended to preserve local health and safety ordinances. But that still wasn’t enough to convince everyone at the Capitol that allowing anyone to open up one or more homes to vacation rentals was in the best interests of others already living in an area.

“I didn’t move into a neighborhood to have the house next door to me turned into a weekly rental property,” said Sen. John Kavanagh, R-Fountain Hills, in voting against the measure earlier this year.

But the question of what the neighbors might think did not arise Wednesday: The ceremony was at the secluded home of Ed and Lynn Newhall, whose property far off the street — and not near any other homes — has been in the family for three generations. Gubernatorial press aide Daniel Scarpinato said the location was chosen by Airbnb.

The measure was pushed through the Legislature by Sen. Debbie Lesko, R-Peoria.

“My priority goal was to protect individual rights and property rights,” she said.

But Lesko dismissed concerns that some of her constituents will be surprised when they find weekend rentals in their residential neighborhoods. And she rejected the idea that speculators could change the character of neighborhoods by buying up multiple properties for weekend rentals.

“It possibly could occur,” Lesko said. “If something like that happened and there is noise or parking issues then the city is given the authority to step in against bad actors.”

Anyway, she said, that is more likely to be the exception.

“In most of these situations they’re good people that rent homes,” Lesko said.

“They just want to stay someplace and have the Arizona experience,” she said. “They’re not causing any problems. They’re just sleeping there, they’re just eating there, and they’re good neighbors.”

Ducey also insisted that the new law will actually expand the Arizona economy, rejecting the idea that all it will mean is people who already are coming to Arizona will stay in a home rather than a hotel.

“I would say we’re supplementing it rather than displacing,” the governor said. “I would say we are adding rather than disrupting.”

Ducey put the number of Arizonans renting out properties at more than 100, saying 131,000 guests stayed at Airbnb facilities in the state last year.

This isn’t Ducey’s first foray into what he says is expansion of the “sharing economy.”

Last year he signed a measure to lift various regulations from ridesharing services like Uber and Lyft. And Ducey said Arizonans should look for more bills of this type.

“I’m not here to block new ideas and good ideas,” he said. “I’m here to make it easier for entrepreneurs and business owners and would-be entrepreneurs to get into business.”

7 comments

  1. Big contributors received their pay back.
    Politics and government in action.

  2. Warren Woodward

    “I didn’t move into a neighborhood to have the house next door to me turned into a weekly rental property,” said Sen. John Kavanagh, R-Fountain Hills, in voting against the measure earlier this year….

    Exactly! If we’d wanted to live next to a hotel we would not have chosen a single-family residential neighborhood.

    Unfortunately Kavanaugh was in the minority. The vast majority of Republicans, who also moan about “home rule” vis-a-vis Federal government regulations, had no problem overriding the home rule of Arizona localities. A pox on all their houses!

  3. Doug Von Gausig

    Not sure what’s being “shared” in the “sharing economy”. It looks like things are being rented, sold, transported for money, but shared? When I share something, it’s out of compassion and caring, not because I want to make money. One only can hope that two Airbnb’s open on either side of the Governor’s home. Imagine home-cooked ice cream stands next to every Coldstone outlet that selling ice cream for half price and with essentially no regulation. Now that’s entrepreneurial!

  4. Nice to see the Maricopa Gang fighting each other once in awhile, instead of against the rest of us.

    However, empowering individuals to “share” their abodes means fewer jobs for hospitality workers, as vacation rentals displace hotel and motel rentals. The hospitality sector is currently one of the largest providers of jobs in the state, especially for those without college educations (the vast majority of Arizonans). Ducey’s thrown in with every “sharing-economy” global monopolist and duopolist wanting to do business in Arizona; why not AirBnB?

    It’s not clear from the article if the rentals are supervised or not. If not, then there’s at least the silver lining that AirBnB won’t lock up the entire rental housing stock — and those poor, poor families renting out won’t have to work for AirBnB earning $10/hour (what the usual host earns, when fees, utilities, and other costs are factored in). Maybe they can get Netflix subscriptions; movies out will still be beyond reach.

    Lastly, Ducey should get out of his provincial digs sometime and travel to San Francisco Bay and other thriving cities, where vacation rentals bought in large blocks have not only afflicted neighbors but often forced out longtime homeowners and renters who have to move miles away in order to sustain their modest lifestyles. Sure, nobody’s busting an artery to move to AZ, not with the current educational, employment, and environmental policies ruining our state. But someday they might.

    With any luck, these phenomena in AZ will be confined to Maricopa County where quality neighborhoods and sustainable lifestyles became rare long ago. Make sure AirBnB pays attention, Doug. Or is it, the other way around?

  5. PS Why is that guy always smirking?

  6. Wow! Does Ducey have any idea what this will do to the City of Tempe? I am shocked the hotel industry has not flipped out! Why bother with zoning ordinances at all then. I will sell every house to be a vacation rental and drive up home values as business investments. I am not sure where to send nice families because I won’t sell a house to them anymore because they won’t have enough money to purchase one. Looks like land owner rights don’t matter anymore because I can put a party house right next to a family with small children. I guess I will just have to pray that the sex offenders in the house are registered and notify the neighbors that one is in the neighborhood for just a short time. I wonder how many children can be contacted over a weekend? No problem, our Governor says it will be just fine!

  7. Good luck collecting all the hotel taxes from all those vacation rentals! I don’t believe any city in Arizona has enough manpower to monitor all the taxes owed by the vacation rentals. It is a whole lot easier to simply collect the revenue from one hotel because they have records showing what has been collected. I know that vacation rentals collect “under the table” because I have been offered a cheaper price if I pay cash and don’t book through the website. Airbnb attempts to stop direct contact between guest and homeowners but some don’t hesitate to deal directly. How is the city supposed to deal with this scenario, hotels don’t deal “under the table” and therefore always have tax revenue available for the city in which they do business. Our Governor has obviously lost his mind! I will be the first to purchase the home next to his and see what he thinks of his new temporary neighbors.

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