Phoenix City Council Passes Scaled-Down Regulations on Short-Term Rentals

After making concessions to companies like Airbnb and Expedia Group, the Phoenix City Council on Wednesday approved an ordinance to crack down on party houses and other nuisances associated with short-term rental homes.

The new policy makes it easier for planning officials to keep track of short-term rentals operating in Phoenix, requiring all operators to register with the city.

The ordinance, passed 8 to 1, also provides more avenues for residents to complain about their vacationing neighbors. Short-term rental owners will be required to post emergency contact information inside their homes and respond to calls from police within an hour.

First-time violations of the ordinance could result in a $500 fine, while second and third offenders would be subject to $1,000 and $1,500, respectively.

The ordinance passed by the Council was a scaled-down version of a proposal drafted by the Phoenix Planning and Development Department.

Changes to the proposal followed complaints from Airbnb, which called the original plan "overly burdensome," and Expedia Group, which sent a letter asking the Council to delay any action on the ordinance.

Before the tweaks introduced on Wednesday, the proposal would have required property owners to post contact information outside their homes, rather than just inside. Additionally, the previous proposal would have required property owners or their agents to respond in person within an hour of a police call, while the ordinance passed Wednesday allows them to respond via phone call or text message.

Perhaps most significantly, while the original ordinance would hold companies like Airbnb liable for violations at homes listed on their sites, the new plan specifies that an "online lodging marketplace is not responsible" for offenses committed by an operator.

During the City Council meeting, neighbors of short-term rental housing complained that the tweaks took the "teeth" out of the original ordinance, while rental operators suggested they were being unfairly punished for the actions of a few bad actors.

State law limits how much Phoenix can regulate the burgeoning online vacation rental industry. In 2017, the Arizona Legislature banned cities from restricting short-term rentals.

Last year, state lawmakers modified the short-term rental statute to allow narrow local enforcement of party homes after complaints from neighbors, particularly in wealthy tourist destinations like Sedona and Scottsdale. That opened the door for the Phoenix City Council to pass its short-term rental ordinance on Wednesday.

City Council member Debra Stark, who represents north central Phoenix and spearheaded the ordinance, noted that legislators are considering additional laws to limit the unfettered growth of short-term rentals, which raise housing affordability concerns in addition to nuisance issues.

"We have to work to see what happens at the Legislature, and we need to be part of that discussion," Stark said, indicating that she would support tighter regulations of the industry if the Legislature grants cities more authority.