Some Arizona Lawmakers Support Limiting Growth of Airbnb Rentals

At least three Democratic lawmakers support overturning a state law that bans cities from limiting the unfettered growth of short-term rentals listed on sites like Airbnb, VRBO, and the recently launched WanderJaunt.

And a Republican lawmaker plans to introduce a bill during the next legislative session that would limit the number of short-term rentals allowed in a municipality. Restricting Airbnb and similar sites could prove challenging in a legislature that overwhelmingly passed a 2016 bill intended to encourage their growth.

"Conservatives loved it because it deregulated. Democrats loved it because it was chic digital economy crap," Republican State Representative John Kavanagh told Phoenix New Times. "It rang everybody’s whistles."

Democratic State Representative Diego Rodriguez called for giving cities greater oversight of short-term rentals after New Times reported on Monday that landlord Thomas McPherson plans to kick tenants out of a historic building in downtown Phoenix and turn their apartments into vacation stays.

"This is not how you build and maintain healthy and affordable communities!" Rodriguez tweeted on Monday. "We will address this in the upcoming legislative session."

Affordable housing advocates say McPherson's decision to turn his apartment building into a hotel highlights a potential problem for Phoenix as the city faces a growing housing crisis. And it's not just a problem in Phoenix.

The Scottsdale Progress reported on Monday that an investment company called Neighborhood Ventures purchased an apartment complex in one of the "last bastions of affordable housing" in the city and plans to turn all of its units into short-term rentals. Meanwhile, as the Arizona Republic reported in January, 20 percent of all houses in Sedona are operating as short-term rentals.

Studies have found a link between increasing Airbnb listings and rising housing costs. Meanwhile, a recent report from the Low Income Housing Coalition ranked Arizona as having the third-worst shortage of affordable housing in proportion to the number of "extremely low income renters."

In an email, Rodriguez said he favors repealing a law signed by Governor Doug Ducey in 2016 that prevents cities from passing restrictions on short-term rentals.

Backed by Airbnb, Expedia, and libertarian groups, the bill passed through both chambers of the Legislature with bipartisan support. In fact, every Democratic lawmaker who voted on the bill voted in favor of it.

That was three years ago.

Now, a new crop of Democratic lawmakers say passing the pro-Airbnb law was a mistake. 

Along with Rodriguez, State Representative and Democratic co-whip Athena Salman also supports repealing the pre-emption law, according to House Democratic spokesperson Robbie Sherwood. So does Democratic State Representative Isela Blanc, who introduced legislation this year that would have weakened the pre-emption law.

None were sitting lawmakers when the 2016 bill passed.

It's unclear whether there is broad support among the Democratic party for short-term rental reform. Sherwood said the caucus has not taken a position on the issue.

A handful of Republicans voted against the pre-emption bill in 2016 for reasons unrelated to housing affordability or the rights of cities to govern themselves. State Representative Anthony Kern, for instance, voted against the bill in solidarity with Republicans in North Carolina after Airbnb publicly opposed a law in that state banning transgender people from using restrooms that match their gender identity.

Then-State Senator Kavanagh was the only legislator in the Senate to vote against the bill. He told New Times he opposed the bill because he does not believe commercial businesses belong in residential zones and felt the law as written was ripe for abuse.

Now a state representative, Kavanagh considered introducing a bill this year that would have banned corporations from operating short-term rentals and limiting property owners to listing two residences on sites like Airbnb. But after stakeholder meetings, Kavanagh determined that he could not get such a bill through the Legislature, he said.

Kavanagh instead introduced a bill that aims to prevent the growth of "party houses" that become a nuisance for neighbors. Signed by Ducey, the new law allows the state to fine property owners whose guests violate "any state law or local ordinance relating to prohibited vacation or short-term rental uses." It also bans the use of short-term rentals for events that would otherwise require a permit, like a wedding

During the next legislative session, Kavanagh said, he plans to introduce a bill that would push further, limiting the number of short-term rentals allowed in a municipality. He pointed to cities like Flagstaff and Sedona, where vacation stays have replaced housing on a large scale and are taking away living options for lower-wage workers like retail clerks and teachers. 

"They literally can’t have places for their employees to live," he said.