Legislature takes aim at short-term rentals

By: - February 13, 2019 9:49 am

A bill with the backing of 57 Arizona lawmakers from both parties aims to add new regulations to short-term and vacation rental properties, like those rented through popular online rental websites AirBnB and VRBO.

House Bill 2672, sponsored by Rep. John Kavanagh, R-Fountain Hills, adds restrictions on the number of people allowed in a short-term or vacation rental property and would require the installation of security equipment, among other additional regulatory measures.

Laura Rillos, a spokeswoman for AirBnB, said the company is currently reviewing the bill.

“It’s important any new laws do not impose unnecessary, onerous requirements on our Arizona hosts, the vast majority of whom are sharing the homes in which they live in order to earn meaningful extra money,” Rillos said.

“This would be the lightest regulation of any state in the country,” Kavanagh told the Arizona Mirror, adding that other states should look to this bill as a model.

If passed, properties would be restricted to “not more than two adults per sleeping room,” as well as having a restriction on the number of people who can be on the property until 10 p.m.

A provision that would have required properties to have “safety and monitoring equipment that monitors and detects the level of noise and number of occupants on the property” will be removed because Kavanagh said it is “too controversial.”

The law would also require owners of the property to provide contact information with the county for “responding to complaints at any time of day.” Additionally, the bill gives the Department of Revenue the ability to request tax information on those properties.

The goal, according to Kavanagh, is to rein in the “major abusers” who will host parties and large events in properties that are not meant for that.

The bill also says short-term and vacation rental properties cannot be used for retail, restaurant, banquet space, event center or other non-residential purposes.

Any law enforcement agency in the state would be given the ability to get confidential tax information from the Department of Revenue on a short-term or vacation rental property; currently, only the attorney general has that power.

The bill also specifically takes aim at groups like AirBnB and Booking.com with a section dedicated to “online lodging operators.”

It stipulates that an online lodging operator must include the transaction privilege tax in sales and advertisements, and failing to do so can result in fines of up to $1,000 per violation.

Any online lodging operator found to be in violation could also have their transaction privilege tax licenses revoked by the state.

If a property gets two verified violations in a six-month period, it would result in its license being revoked for 60 days. If there are three additional violations in a 12-month period, the license would be revoked.

AirBnB already collects transaction privilege taxes, as well as county excise tax and local transient occupancy taxes in Arizona.

AirBnB generated $11.5 million in tax revenue in 2017, and Gov. Doug Ducey was quoted by the company saying it is “exciting to see companies like AirBnB expand and continue to thrive in Arizona.”

Proponents of companies like AirBnB say it drives competition, while others say the company increases rental costs.

A study by researchers in the Netherlands found that areas of Los Angeles with regulations in place drove down local rental and housing costs.

The bill has not yet been assigned to a committee.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Jerod MacDonald-Evoy
Jerod MacDonald-Evoy

Reporter Jerod MacDonald-Evoy joins the Arizona Mirror from the Arizona Republic, where he spent 4 years covering everything from dark money in politics to Catholic priest sexual abuse scandals. Jerod has also won awards for his documentary films which have covered issues such as religious tolerance and surveillance technology used by police. He brings strong watchdog sensibilities and creative storytelling skills to the Arizona Mirror.