Housing

Scottsdale Wars Over Short-Term Rentals as Travel Demand Spikes

Neighbors of some short-term rental homes in Scottsdale want to see more regulation.
Neighbors of some short-term rental homes in Scottsdale want to see more regulation. David Hudnall
click to enlarge Neighbors of some short-term rental homes in Scottsdale want to see more regulation. - DAVID HUDNALL
Neighbors of some short-term rental homes in Scottsdale want to see more regulation.
David Hudnall
Every Thursday afternoon, at 3 p.m., Erik Stroud feels a creeping sense of dread. At that time, like clockwork, guests arrive at the vacation rental next door.

“Every Thursday. Three Ubers pull up. Ten kids get out," he said. "It's the same thing, over and over and over."

The ranch-style house adjacent to Stroud’s home, in old town Scottsdale, is lusciously decorated. According to its Airbnb listing, it offers “sound healing” sessions and, for an additional cost, a private chef. On peak weekends, it goes for $600 a night. When the property sold two years ago, the new neighbors initially told Stroud that an older couple planned to move in. “And that was not true,” he says. “They bought it and, about two weeks later, they converted it into a vacation rental. And from then on, it’s been hell.”

At first, Stroud thought he could manage it. But then, on weekends, 30-seat party buses began to roll up, with disco lights and bumping music. There have been fistfights in his driveway. Sometimes, a pop-up business rents out the house for a single day and fills it with racks of boutique clothing. Dozens of customers flock to the neighborhood to go shopping. “I can’t sleep,” he said. "It just got so out of control."

The gleaming, ultrarich neighborhoods of Scottsdale — some of the wealthiest in the metro Phoenix area — are festering with short-term rentals. Many long-term residents have spent years petitioning against the rentals, which have flourished on platforms like Airbnb and Vrbo. But a travel frenzy spurred by easing pandemic restrictions has, they say, brought things to a breaking point.

Demand has spiked in Scottsdale in recent months. According to data from AllTheRooms, the average vacation rental listing price in the city has nearly doubled since January. The area is the perfect storm for a short-term rental takeover: Many houses in the neighborhoods look like mini-resorts and are close to clubs and bars. But, more crucially, Arizona’s regulations on vacation rentals are decidedly lax, altogether blocking local control of the industry. The city estimates more than 5,000 properties out of Scottsdale’s 90,000 households — nearly 6% — are now listed as vacation rentals for some part of the year. Increasingly, the state is an outlier in its management of the properties, as neighbors like Nevada take a more stringent approach. It has turned the town into, as Stroud calls it, a “bachelorette capital.” Residents are incensed.

“It’s starting to get really aggressive — on both sides, I will say. There are some homeowners that… I’m nervous. I’m afraid they’re going to lose it,” said Kate Bauer, who helped found a local group called Neighbors Not Nightmares, which is fighting the rentals in Scottsdale and around metro Phoenix. Some homeowners in Scottsdale have taken short-term rental owners to court. The city has formed a working group on the issue, to try to ease tensions.

“It’s the largest investment they’re going to make,” Bauer explained. “This is their home. And they feel that it’s slipping away from them.”

In recent weeks, Airbnb has embarked on a campaign against the scourge of “party houses” that plague its listings, claiming to have blocked tens of thousands of users for violating its party ban, including 5,000 attempted bookings in Phoenix alone.

But in Scottsdale, residents tell a different story. One homeowner, last summer, looked into her neighbor’s backyard to see a new mural decorating the wall: "Get Wild Scottsdale," it read, painted in bright balloon letters. "As soon as they painted that on the wall, I felt this pit in my stomach," she said. (The homeowner requested not to be named, for fear of harassment by the property owners.)

Weeks later, the property was listed on Airbnb, advertised as the "jungle house." A towering bouncy castle showed up in the yard one afternoon, per photographs provided by the homeowner. Instagram posts further document the house's interior, including a quote from "Tiger King" painted on a wall that proclaims: "I'm outspoken, good looking, love to party." It was one of many Airbnbs in Scottsdale that are marketed, explicitly, for partiers.

The Scottsdale police, in turn, have been inundated with calls about the rentals. A working group convened by the city has suggested that, to deal with the volume, the city needed a new police response team solely dedicated to the issue. It would consist of six officers, a sergeant, and a code inspector. When a councilmember questioned whether the rentals were “that big of a problem that we need eight full-time police officers on call,” assistant chief Richard Slavin noted that the department had received over 1,500 calls for service regarding such rental properties.

Short-term rental owners, for their part, are dismissive of some of the residents’ dramatics. Randy Durow, who owns nine vacation rental properties in the area, admitted that some of the property management companies that have descended on Scottsdale are “pretty shady.” “So I get it,” he said. “I get how neighbors are getting upset about that.”

“But you get these people — we call them NIMBYs — they’re just screaming. They exaggerate a lot. It’s just ridiculous some of the things they’re saying. It’s out of control,” he said.

A series of public comments submitted to the city of Scottsdale gives a sense of the complaints: “Trash piles up for weeks before calls to the city finally get it cleaned,” one resident said, noting that she had two short-term rentals next door. “Please help us, we’re drowning,” wrote another resident, who says a vacation rental partygoer had tried to break into his house. “Drugs, Fires, Parties, Thieves!!!” another wrote.

The city has drafted up recommendations to address the issue locally — but a state law, which Gov. Doug Ducey signed in 2016, specifically prevents municipalities from regulating short-term rentals, with some narrow exceptions. Cities like Scottsdale are left to patch together solutions through already-existing code enforcement.

The recommendations include a “nuisance party search team” within the police department and hiking up fines on non-compliant properties. At the same time, the city is still trying to put together a complete list of local short-term rentals. Though the properties are required to provide contact information to the city, most haven’t: “We have to basically find them and encourage them to share that information with us,” said city manager Brent Stockwell.

That’s no small task. Stockwell estimates that there are at least 4,000 short-term rentals in Scottsdale that the city is missing — or four out of five of the city's total.

Faith in the city’s ability to manage the problem without critical tools like zoning laws is mixed. Bauer says her group is more focused on repealing the state law — S.B. 1350, now A.R.S. 9-500.39 — than local efforts.

“Our mantra has just been local control, local control, local control,” she said. But that is unlikely to happen during Ducey’s tenure, she noted: “We’re at the mercy of whoever our next governor is going to be.”

The growing pressure to change the state law makes rental owners like Durow nervous. “If they get local control, you know what they’re going to do? They’re going to shut 'em down. They’re going to say, ‘30 days,’” he said. And, if that happens, he said “the tourism industry is going to be crushed.”

For now, though, Scottsdale remains a shining example of an unregulated short-term rental industry. Some residents are thinking about leaving. Audra Jones, who lives in south Scottsdale, copes with a vacation rental next door — like “everyone does” these days, she said. “It’s disruptive, it’s annoying,” she said. “I just can’t deal with it.” She says she has been looking at moving to an acre of land out of the city, far out from any neighbors.

For those who want to stay in Scottsdale, moving is hardly an option.

“I would move,” said Stroud, “but where do you go? There are no disclosures. Buy a house in North Scottsdale? Well, they have it just as bad as we do.”
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Katya Schwenk is an editorial fellow at Phoenix New Times. She previously reported for VTDigger and the Indypendent.
Contact: Katya Schwenk