Here is a real-life example of how Short Term Rentals ruin everything. A Scottsdale resident sent me information about a current listing on Realtor.com. The property is just under 4,000sf and just over .8 acres with six bedrooms, six baths, a four-car garage and pool. But here’s the twist: it’s not being sold as a single-family home, its being marketed on an income basis as a “turn key” Short Term Rental / Hotel property sleeping up to 50 people in a residential area. How does this play out?
NEIGHBORHOOD NUISANCE – The area has nice, quiet single-family homes – except for this full-time, whole-house STR “sleeping 30 people”, with “more on couches/mattresses if necessary”, but “50 is the max.”
“Our main bookings are Bachelor, Bachelorette’s, Golf Groups and sports teams, youngsters to high school.” He also rents out the pool on Swimply when the house isn’t booked as an STR, so it’s a non-stop party house. Can you imagine living next to this? Or the “stranger danger” for your family and kids with 25 to 50 random transients coming and going at all hours? With no on-site management to deal with the safety or nuisance issues? This is how unregulated STRs threaten our safety and ruin our quality of life.
HOUSING MARKET – The seller says the property is only worth about $1.6 million as a regular home, but as an Airbnb he’s asking $2.25 million because “in reality it’s a hotel” and the higher income justifies the higher price. This is exactly how STRs are destroying Arizona’s housing market and affordability. Home buyers can’t possibly compete with STR investors that will pay 40% more for the same house. Renters are shut out because they can’t possibly pay “hotel rates” for their monthly rent. Arizona’s Airbnb laws help rich investors get richer while slamming the door on residents and families. This is simply wrong.
JOBS – Typically, 25 guests would need 10 or 12 hotel rooms. A full-service hotel typically employs about one person per room, so accommodation for 25 guests would mean 10 or 12 full-time jobs. However, this seller says he and his girlfriend “will do everything,” “so you can eliminate the cleaners, landscapers and everyone else,” thereby killing about eight or 10 full time hospitality jobs. This is in line with Airbnb’s own study that shows STRs kill nine out of 10 jobs when compared to legitimate hotels. Arizona is far better off with visitors in hotels and residents in homes.
ILLEGAL, UNLICENSED – Oops, the seller mentions that a few of the rooms (including extra kitchens and baths) don’t have building permits and aren’t up to code. And while he is registered with the City of Phoenix his listing doesn’t include the required state licensing information, so the operation is unlicensed and illegal. Of course, studies have shown that over 95% of Arizona STRs are unlicensed and illegal, so this scofflaw attitude is all too common with STR “hosts”.
So this one STR disrupts the neighborhood, puts housing out of reach for families and kills jobs with its unpermitted, illegal operations. Now multiply that times the more than 50,000 illegal, unlicensed STRs across Arizona. What should be done about this mess?
First. the state should end the prohibition on regulating STRs and reinstate local zoning so communities can address STRs according to their own local needs and standards. Operating an STR should be a privilege, not a right, since STRs affect everyone in the surrounding area and trample the neighbors’ right to the “quiet enjoyment” of their home. Allowing occupancy limits would address the ridiculous overcrowding in so many STRs.
The Department of Revenue needs to create an STR enforcement team to crack down on the 95% of STRs that are unlicensed and illegal. Finally, Arizona legislators should learn from other states that successfully manage STRs by limiting them to residents hosting their primary residence as an STR. This would allow actual Arizona residents to host but would eliminate the pure investors that will never be a part of the neighborhood and are simply strip mining our communities.
Arizona’s current policy of prohibiting regulations for STRs and “anything goes” is ruining neighborhoods, housing, jobs and taxes for residents. STRs can be a benefit to hosts, guests and the community, but it requires a thoughtful, comprehensive, enforceable framework to make it work for everyone.
Bill Hunter is a snowbird in Paradise Valley.
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