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AG asked to weigh in on Gila County’s regulation of short-term rentals

BY:  – MARCH 1, 2024 2:03 PM

Gila County’s regulation of short-term rental properties is drawing scrutiny from one of the county’s GOP legislators, who wants the attorney general to weigh in on whether the county is following a state law limiting local regulations of rentals.

Late last year, the Gila County Board of Supervisors adopted a 16-page ordinance that enacts a number of regulations and restrictions on short-term rental properties, like those listed on Airbnb and Vrbo. The ordinance goes much further than similar ordinances adopted by other Arizona counties and municipalities.

One of the regulations includes a $250 annual fee, which the county has said will help pay for a full-time code compliance officer who will enforce the new regulations. It also allows for the county to revoke the license of a short-term rental after three violations of the new ordinance. 

That has prompted state Sen. Wendy Rogers, a Flagstaff Republican whose district includes Gila County, to ask Attorney General Kris Mayes to issue a formal legal opinion on whether the ordinance violates a state law that preempts cities, towns and counties from enacting certain regulations around the use of short-term rental properties. Rogers’ letter appears to take issue with the annual fee and using that money to pay for enforcement of the local ordinance. 

Rogers did not respond to repeated requests for comment about her opinion request. The Gila County Board of Supervisors also did not respond to a request for comment. 

State neighborhood advocates who have been fighting for increased regulations on short-term rentals argue that they believe the letter is an attempt to initiate what’s known as a “1487 complaint” against Gila County. 

In 2016, GOP lawmakers passed Senate Bill 1487, which permits any legislator to order the AG to review an action by any municipality or county if they believe that action violates the state law. If the attorney general determines the local action violates state law, the cities face a suspension of the sales- and income tax revenue the state government collects and shares with cities until the action is corrected. 

Other cities that have passed regulations around short-term rentals have faced similar challenges

“I think she is fishing for material to make some sort of 1487 complaint,” Susan Edwards, chair of the Arizona Neighborhood Alliance, said to the Arizona Mirror. The Arizona Neighborhood Alliance has been focused on finding solutions to how short-term rentals are impacting communities across the state

The same year that SB1487 was passed, the Arizona legislature also created a law that prohibits municipalities from enacting regulations on short-term rentals except in specific circumstances. 

At the time, the new law was touted by then-Gov. Doug Ducey and other lawmakers as a way to boost the short-term rental market. But after a string of complaints from cities and towns that found themselves with no way to go after bad actors, Ducey later said since that lawmakers should “revisit” the ban on local regulations.  

The anti-regulation law was model legislation from the American Legislative Exchange Council, an organization that connects corporations with state legislators — almost exclusively Republicans — so they can craft pro-business legislation.

In many instances, the result is legislation that is simultaneously pushed in statehouses across the country. The short-term rental company Vrbo is a member of the trade association NetChoice, whose president sits on ALEC’s Private Enterprise Advisory Council.  

ALEC has a strong presence in Arizona, with many GOP members of both the House and Senate Republican caucus having ties to the group

Since the ALEC model legislation became law in 2016, other legislation aimed at short-term has stalled, including efforts this year. 

Eleven different bills aimed at the short-term rental industry were introduced this session, but all were killed. On Feb. 22, Republican legislative leaders attended a luncheon at the Arizona Capitol with short-term rental industry leaders, where they celebrated the bills dying. 

“There have been a lot, a ton, a litany of regulations that have come here in the 12 years I have been down here aimed at short-term rentals. Do you know how many of them I voted for? Zero,” Senate President Warren Petersen, R-Gilbert, said to a crowd of short-term rental owners and lobbyists in a recording obtained by the Mirror. A source who attended the event said that Rogers and other legislative Republicans, including House Speaker Ben Toma, were present. 

Petersen himself has owned and operated a short-term rental property, though the property now operates as a “traditional” rental. Petersen also initiated a 1487 complaint against Paradise Valley for the town’s short-term rental regulations. 

“It’s your property. Do what you want to do with your property,” Petersen told short-term rental industry leaders, who responded with applause. 

Edwards and other advocates say that the proliferation of short-term rentals is continuing to have an outsized impact on Arizona communities. Sedona has seen a surge in STRs and a loss in affordable housing since the passage of the 2016 law, and more than 40% of the city’s workforce now lives outside Sedona’s borders. 

“We’ve got to change that composition of the legislature,” Edwards said, adding that people who “care about neighborhoods” need to be elected to the statehouse in November. Democratic lawmakers have generally fought for further regulations, a point Petersen made in his speech to the crowd of short-term rental property owners. 

“I don’t know how confident I’ll be able to say that after November,” Petersen said of blocking short-term rental regulation at the legislature. Petersen singled out his Democratic colleagues as the ones who vote for and are behind many of the bills aimed at short-term rentals. Republicans control both chambers by a single vote, and Democrats are expected to spend heavily in this year’s elections in a bid to flip control of the legislature. 

“As long as the Republicans control the Senate and the House, unfortunately, the outlook is not great,” Edwards said, adding that short-term rentals are “destroying the fabric of communities in our state.”

This report originally appeared in the Arizona Mirror, an online nonprofit news agency. Find more reporting at azmirror.com. More can be found on Twitter at @ArizonaMirror or at azmirror on Facebook.

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