Mayor Sandy Moriarty Talks to Sedona Residents about Vacation Rentals – Their History and Current Status

By Sedona Mayor Sandy Moriarty

Sedona News: Let’s talk about a hot topic in Sedona, vacation rentals, also known as short-term rentals, and what is usually referred to as Air B&B’s. What are they, exactly, and are they good or bad for Sedona?

By definition, they are rentals of less than 30 days, and they can be a room in someone’s home, a casita, a condo, or a small multiple family dwelling. But most vacation rentals are single family houses. Only about 10% are units in a home occupied by a resident. In 2016, the Governor and the legislature passed SB1350, which bans cities and towns from prohibiting vacation rentals or regulating them in any meaningful way. From that day on, I have been working hard to find a way to regulate and manage vacation rentals, locally and fairly, but I want to emphasize that no one is proposing to make any existing vacation rentals illegal and force them out of business.

Although bills to change the law have been introduced in every legislative session since then to give cities and towns some effective control over vacation rentals, none have succeeded, other than those allowing the collection of emergency contact information and little else. I have gone to the legislature to testify about the need for regulation and management tools in every legislative session since 2017 with the exception of 2020, when the session was cut short due to the pandemic.

As of the end of April, there were 933 vacation rentals inside city limits and another 547 properties outside city limits in the greater Sedona area. These properties have added 2409 rooms in city limits and 1358 outside city limits. Compare that to the 1749 hotel rooms in city limits and 1040 hotel rooms outside city limits. Since January 1, 2017 more vacation rental rooms have been created in just over 5 years than hotel rooms over the last 50+ years. Vacation rentals now make up 14% of our housing stock.

People ask why the city can’t simply deny zoning approval for vacation rentals? Vacation rentals are primarily on residential property, so legally they can only go through the city approval process for single family residential homes. They are not required to meet the health and safety standards or parking requirements that hotels must meet, nor do they have an on-site host. About a third of these properties are owned by our fellow Sedonans, who believe it is their right to do what they want with their property. They see it as a residential use, and state law says that long-term and short-term rentals must be treated the same. I believe they are not the same. That law needs to change.

But why aren’t vacation rentals paying taxes? Vacation rentals DO pay taxes. Online marketplaces must now collect and remit both sales and bed taxes to cities and towns, which in Sedona amounts to 7% of the rental amount. We made that happen when former City Attorney Robert Pickels and I worked with the League of Arizona Cities and Towns in 2017 to ensure that the Governor’s agreement with Air B’n’B, which was originally voluntary, became mandatory for all online lodging marketplaces.

The lack of regulation has been forced on cities and towns by the state. It is time to hold state legislators and the Governor accountable by voting out anyone who does not favor local control of vacation rentals. Statewide standards are simply not appropriate and rob cities of reasonable oversight.

Are vacation rentals good or bad for Sedona? The properties are often improved , and may also be better maintained, and of course they generate income for the owners as well as tax revenue for the city. On the flip side, when they proliferate on the scale they have in Sedona, with no end in sight, I believe that the worst effects they have are on the housing market, as both rents and home prices have soared in the last year or two, resulting in an actual decrease in population, and housing that is further and further out of reach for the workforce needed by our community. Vacation rentals undermine our community, as neighborhoods become hosts to more visitors and more traffic. No matter how responsibly any vacation rental property is managed and no matter how well behaved the renters are, they are not neighbors, they are visitors. Only a resident can be a neighbor.

I am not totally opposed to all vacation rentals. Where there is an owner or manager living on the property, a neighbor still exists. Unfortunately, that type of property is only about one-tenth of all vacation rental properties. The sheer numbers of vacation rentals continue to grow and undermine our sense of community, and for me, it needs to be stopped. It is clear our current legislators and Governor will not make the changes we need. I ask all of you to vote for those who will make the needed changes to protect our community.