By Bear Howard
Sedona, AZ — Living here in Sedona, Arizona, surrounded by breathtaking red rock landscapes and a vibrant community, I’ve come to love this town for its unique blend of natural beauty, spiritual energy, and artistic expression. But as a resident, I’ve also witnessed a profound transformation reshaping Sedona’s very fabric.
This transformation—driven by a mix of political decisions, shifts in the real estate market, and the rapid rise of short-term rentals—has brought benefits for some but deep challenges for many. The housing crisis now gripping our town raises urgent questions about ethics, responsibility, and Sedona’s long-term future.
Recently, a local article in the Red Rock News caught my attention. It highlighted an initiative by real estate professionals to study the relationship between their industry and the explosion of short-term rentals in Sedona. While it’s commendable to explore this issue, I couldn’t help but feel that the study seemed designed to present agents as positive forces, downplaying their role in some of the challenges we now face.
If you’d like, here is a link to the actual article in the Red Rock News that precipitated this dialogue: RealtorsAssociation Conducting County STR Study.
Let’s take a step back and look at the big picture.
A Law That Changed Sedona
In 2016, Arizona passed a law permitting short-term rentals in residential areas, fundamentally altering the state’s housing market and reshaping communities. Initially framed as a boost for tourism and property owners’ rights, this law has since fueled a dramatic shift from long-term rental housing to short-term “mini-hotels,” creating significant challenges for residents across the state.
Nowhere is this impact more visible than in Sedona, Arizona—a small, scenic city renowned for its natural beauty and tight-knit community. In Sedona, the short-term rental boom has distorted the housing market and undermined the essence of community living.
Sedona’s Shrinking Population: A Telling Statistic
Over the past decade, Sedona’s population has dropped by roughly 1,000 people. This decline is not a coincidence; it mirrors the steady conversion of homes occupied by long-term residents into short-term rentals serving a transient visitor base. The argument that his homes were empty, and just second homes converted to short-term rental, looks to be more fantasy than fact.
This shift has left Sedona with a dual identity: a place where daily visitors arrive in droves to enjoy its beauty and charm but where fewer and fewer people live to sustain its heart and soul.
Unfortunately, when these concerns are raised, they’re often dismissed by real estate professionals as emotional arguments or attempts to scapegoat their industry. Some even frame this critique as a refusal to accept “market forces,” deflecting responsibility for their role in Sedona’s transformation. But the numbers tell a clear story: fewer residents, more short-term rentals, and the erosion of the sense of community.
The Sedona Experience: A Community Transformed
Sedona has long been a magnet for tourists drawn to its iconic red rock formations, spiritual energy, and vibrant arts scene. However, the 2016 law transformed this idyllic town into ground zero for Arizona’s short-term rental explosion. Investors, often encouraged by real estate agents eager to capitalize on commissions and rising property values, saw Sedona’s tourism appeal as a goldmine for platforms like Airbnb and VRBO.
The result has been a feeding frenzy in which real estate agents and opportunistic property owners have prioritized maximizing income over the broader consequences for the community.
Many long-term landlords have followed this trend, converting properties into short-term rentals to cash in on higher nightly rates. While this move is undeniably profitable, it reflects a broader disregard for the people who once rented these homes or could have purchased them at more affordable prices. Prioritizing short-term profits has exacerbated Sedona’s housing crisis, as properties that once provided stability to local families are now transient “little hotels,” offering no long-term benefit to the community.
Skyrocketing Housing Costs
The shift toward short-term rentals has driven housing costs in Sedona to unprecedented levels. As investors, often guided by real estate agents highlighting the financial potential of nightly rentals, buy up properties for conversion, home prices have soared. Real estate professionals, motivated by commissions and the appeal of high turnover in a competitive market, have played a pivotal role in accelerating this trend, often downplaying the long-term ramifications on affordability and housing availability.
As a result, home prices and rents in Sedona have skyrocketed. The median home price now exceeds $1 million, and long-term rental rates have become unaffordable for many workers. This scarcity has pushed essential workers—teachers, nurses, and hospitality staff—further away, leaving the very fabric of Sedona’s community frayed.
The irony is glaring: those who support the town’s thriving tourism industry can no longer afford to live there, driven out by a housing market increasingly dominated by the short-term rental revolution.
Community Disruption in Sedona
Real estate agents, in their rush to capitalize on the trend, and property owners eager to maximize profits often fail to consider the broader consequences of these changes on Sedona’s community fabric.
These transformations have taken a toll on Sedona’s long-term residents, many of whom feel displaced in their own neighborhoods. The constant influx of strangers erodes the stability and trust that define residential communities. The pursuit of profit by some property owners—who, despite living in Sedona themselves, choose to prioritize income over their neighbors’ well-being—further exacerbates this sense of loss.
The Political Roots of Sedona’s Crisis
What’s happening here in Sedona isn’t just a local issue; it’s a product of Arizona’s political landscape. The 2016 law reflects the state’s deeply conservative, predominantly Republican ideology, which prioritizes free-market principles and deregulation over community needs.
This law stripped local governments of the power to regulate short-term rentals, leaving towns like Sedona unable to address the fallout. Even now, efforts to cap the number of rentals or enforce stricter zoning are blocked by well-funded real estate industry lobbyists and lawmakers who favor investors over residents.
A Historical Lens: Sedona’s Housing Evolution
To understand how we got here, it helps to consider the broader history of real estate:
- Post-War Housing Boom: After World War II, the GI Bill fueled suburban expansion and a culture of homeownership, creating stable, family-oriented communities—quite different from the transient rental economy we see today.
- Women in Real Estate: The 1974 Equal Credit Opportunity Act opened doors for women in real estate, including here in Sedona. Their success reflects progress but also highlights the challenge of balancing professional ambition with community responsibility.
- The Internet Era: Digital platforms have transformed the market, enabling real estate professionals to market properties for short-term rental use, exacerbating housing shortages in Sedona.
- Sedona’s Real Estate Boom: Sedona’s resort-like charm has fueled a real estate boom, attracting wealthy families from California and new residents during and after the COVID-19 pandemic. The high demand and rapid trading of properties have created extraordinary opportunities for real estate agents to achieve exceptional incomes in this luxurious, high-growth market. Personal financial ambition, some might call greed, demonstrates that perhaps greed has become a virtue in our modern society.
The Role of Lobbying and Resistance to Reform
Efforts to address the short-term rental crisis in Sedona and beyond have been met with significant resistance from industry lobbyists. Real estate associations, in particular, have fought to protect the lucrative environment created by the 2016 law.
Proposals to cap short-term rentals or give municipalities like Sedona greater control over zoning have been stymied by arguments that such measures infringe on property rights and hinder economic growth.
Meanwhile, Sedona’s city government finds itself largely powerless to combat the issue, unable to implement policies that would stem the tide of homes being transformed into tourist accommodations.
Reclaiming Sedona’s Community
Addressing Sedona’s short-term rental crisis requires a multi-faceted approach. Policymakers must prioritize granting municipalities greater control over zoning regulations and limiting the number of short-term rentals per neighborhood. Real estate professionals and property owners should be held accountable for their role in exacerbating the crisis.
Conclusion
The 2016 Arizona law permitting short-term rentals has turned Sedona from a close-knit community into a tourism-driven hub. Real estate agents, investors, and landlords have fueled this shift, prioritizing profits over people, driving up housing costs, displacing essential workers, and eroding neighborhood identities.
The long-term impact is significant. Laws grandfathering existing short-term rentals ensure many homes will remain lodging businesses for decades, keeping them out of the long-term housing market. Even potential reforms may only apply to new rentals, leaving much of Sedona entrenched in the tourism economy and altering its character for generations.
This crisis is the result of policy decisions by Arizona’s ultra-conservative lawmakers, who prioritized profits over community well-being. Their focus on property rights and investor gains over stable neighborhoods has left Sedona grappling with the fallout of unchecked greed.
Sedona’s housing crisis was not inevitable—it was a political choice on a statewide and local citywide basis. Reversing the damage will require collective action to prioritize livability and restore Sedona as a place where people can live, thrive, and call home. And visit! This is not an anti-tourism statement. Tourism is the lifeblood of Sedona and will be for the foreseeable future, perhaps forever; it’s just a statement of the reality. We all need to learn to live in a very complex society with so many competing agendas. No one’s gonna get their way.
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11 Comments
Well said. Now wait for some person who will ignore everything you said, and will refuse to believe any of it.
I have said, go to a restaurant, store, anyplace you like in town. Ask them where they live? ask them if they rent? ask a room, or home? And what it costs? This has happened to 50% or more of my friends. I have friends of all ages, and its the same story. They move to Cottonwood or they move to Phoenix, or move back where they came from. Its very sad.
It revolves around money and greed, and the people of the town be damned! Many states have great laws to real in and keep control so it dosent ruin towns and cities. Colorado did a nice job of the balance.
Before the law was passed, only 4 cities in the whole state didnt allow short term rentals. We were one of them, now look at what it has done. Now even towns like Lake Havasu are having nothing but troubles.
When things don’t make sense, just follow the money for the source of the problem.
The invasion of OHV’s is another example of the influence of money in our government.
Laws and regulations at the State and Federal level are often controlled by lobbyists that are backed by massive amounts of money from the likes of the Airbnb, VRBO, Honda, Polaris, etc. In many instances the lobbyists write the legislation.
Don’t expect the RR News to print a counter argument similar to Bear Howard’s Chronicles. If you are a normal citizen in Sedona that does not generate advertising dollars for that paper, your perspective will not be told.
Follow the money.
While I am no Arizona property rights legal expert – by any means, certain points have stood out for me since this matter arose. As a long-time homeowner resident, I have real disappointment in local responses to this matter – because if I may be correct (question for AZ land use legal experts), there may well have been a response that has not yet been raised. While such may have been discussed elsewhere, I have not yet seen such mentioned (at least not public facing).
1) While I have some professional background in real estate zoning matters (not in AZ), I have never seen any situation in which a State can force a municipality to change its zoning – and that, effectively, may be what occurred here. Usually, as far as I know, lowest locale (incorporated?) “regulations”/limitations prevail. For example, HOA CC&Rs may have limitations such as “no rentals less than 30 days”; under these circumstances, it is my understanding (at least in other states) that no State, County, municipality… can “force” an overriding change to that lower “local-ized” “limitation” – and I think that such HOA CC&R limitations still prevail here in Sedona today.
2) How do the short term rentals “appear” to be the State “forcing” City of Sedona to change its zoning? Due to Sedona’s tax code, there are no “Single Family Residential” zoned (owner occupied or longer-term rentals) homes paying taxes directly to the City of Sedona – all pay direct to County. However, hotels and motels are “commercial” zoned, and – I think – DO charge guests a nightly Sedona occupancy tax, which the hotels/motels in turn pay directly to the City of Sedona. I also “think” short term rental “Single Family Residential” zoned residences are required to charge their guests that same nightly occupancy tax, and in turn pay that amount directly to the City of Sedona. If correct, this would effectively be forcing “Single Family Residential” zoned homes to pay the exact same hotel/motel nightly occupancy taxes directly to the City – when owner occupied and longer-term rentals do not. This may well create what is sometimes referred to as a de-facto zone change from “Single Family Residential” to commercial-hotel/motel (charging nightly guests taxes – same as a hotel room, pays those tax collections to city – same as a hotel room, functions as a hotel room, and for all intents and purposes IS a de-facto commercial hotel rental, just avoiding the requisite commercial “zoning” otherwise prohibited in “Single Family Residential” zones).
“IF” these points may be legally “correct” (in AZ), it would seem the City might appear to be capitulating to a (otherwise unstated) new income source opportunity by “accepting” the State has the legal right to force the City to change its “effective” “zoning”. This would certainly “appear” to be a de-facto zone change (as hotels are otherwise not legally allowed on “Single Family Residential” zoned land). It certainly “appears” to be a possible income grab by the city – “IF” this analysis may be correct. It also may have real impacts on the hotel/motel industry, which likely have been working/investing to find the economic supply and demand equilibrium point – by dumping thousands of new “supply” units into the market.
The implications may be even farther reaching. Aside from all in this article (nicely done – and nice to SEE), this has not only reduced residents, changed the housing market … it is radically changing the lifestyle quality and character homeowners bought into – investing in property relying on “Single Family Residential” zoning (as an investment and/or residency consideration factor). Owner occupied and long-term renters are now dealing with sometimes loud, rowdy and disrespectful short-term renters who seem to think they can treat our neighborhoods like hotels (hot tub and/or outdoors deck parties at 3 am, headlights pulling into wrong driveways and shining headlights into our homes at 3 am, ignoring the speed limits on our residential neighborhood streets, far more loud OHVs – and more); it may well also be impacting our schools and school funding (less family affordable housing likely means less school children). It is CLEARLY substantively reducing opportunities for local business employees to live here (historically proven BAD regional development policy). Collectively, all these consequences – intended or not – have certainly changed the quality and character (for the worse) of each and every neighborhood in which short-term rentals are not blocked by HOA CC&Rs, and even in some cases those too; if not gated communities, HOAs have boundaries – and those “Single Family Residential” zoned houses located adjacent to those boundaries may not be likewise constrained by another HOA’s CC&Rs (so even boarder HOA homes are often not protected from these nuisances and quality-of-life [and investment] degradations).
It would certainly appear, from this issue – and others – that tourism has become prioritized over residents by our local government. I also “think” all top-level Sedona employees (including Council and P&Z and senior staff) may be required to be City of Sedona residents; if correct, we may have “residents” deciding to prioritize tourism over residents’ interests – and THAT may well be a recipe for even more degradation of the residential quality of life, and their investments (perhaps other than for gated communities). After decades as a local home-owning resident, I now (disappointingly) contemplate leaving too – the quality of life here WAS awesome; these outcomes become inevitable when local residents governing the City prioritize the economics of tourism over competently managing the budget to protect the residents they supposedly represent (those very same residents who elected them to protect our Sedona quality of life).
How do you force somebody making $100,000 a year to live in a town where a dump starts at $1 million and by the way there was no zoning change. This was a law propagated by Governor Doocy I have forced on local municipalities, remember sedona is a very wealthy city. It can paved streets and pay it bills because 80% of its money comes from tourism and I think you and the people who live here now knew that when they moved here.
Bill Howell, I never said there was a zone change – I said it may be a “de-facto” zone change (existing in fact whether with lawful authority or not). Also, when I bought my home here the mean price was under $300k – and these vacation rentals were not yet even a topic of consideration, no less discussion (back then time-shares were the hot topic of contention). And, “who” proposed the bill is irrelevant. Yes, Sedona is a tourism economy and has long been so – but your numbers do not actually reflect a deeper insight into some of the realities. Sedona wastes money hand over fist with unwise decisions, big expenses easily avoidable and preventable – and there are many examples (basic planning content I learned in grad school almost 40 years ago – when I got my masters degree in Urban and Regional Planning – things taught even back then to “NOT do”). Yet, the City of Sedona does many of them – even today (even though such have been school-taught to “not do” for decades).
Another reality: Sedona does not have a residential property tax (and that is why homes in the City of Sedona still have such low taxes – which many love), when many/most such municipalities around the country do (even other tourism economy municipalities). Sedona council candidates have long ignored this reality, and avoided even mentioning consideration as it has always been considered a death-knell for candidacy; such taxes (even minimal) represent a different approach to the budget that could have allowed Sedona to not become completely dependent upon tourism, and therefore not place the City in a position to subvert local residents (and local business employees) as a priority in favor of tourism. This shortsightedness, no city residential real estate taxes considerations under any circumstances, is – and always has been – just that = very short sighted, and why the City is now completely dependent upon – and subservient to – tourism (at the expense of residents’ quality of life). Now, as a consequence of this short-sightedness, Sedona’s options are far more limited – but there are still ways/approaches that can minimize the damage. I am not anti-tourism (and never have been – Sedona is beautiful and should be shared); I am FOR a city government that actually represents and PROTECTS the residents and the quality of life here, and competently manages the budget so that the City CAN & DOES prioritize the residents and quality of life here (especially when all Sedona council, P&Z and senior staff ARE “local residents”).
As for other comments posted by others – ultimately, IMO, this has absolutely nothing to do with partisan politics. This article is about the IMPACTS of nightly residential vacation rentals on the local market, community and quality of life here (which is EXACTLY what I wrote about in my prior comment). “Who” and/or “which party” voted which way on bills really isn’t relevant at this point, trying to minimize the damage IS (again, just my opinion).
I wont try to debate any of this further, I have shared what I hoped to convey. Any who may choose to lose sight of the forest for the trees – have fun, but pointing fingers will never do anything more than air-out grievance. Clearly, we all love Sedona – and one thing we all seem to AGREE on is that this matter as having an increasingly detrimental set of impacts (accept for those capitalizing on the income opportunity – at the quality of life expense of all others).
Bear says “The 2016 law reflects the state’s deeply conservative, predominantly Republican ideology, which prioritizes free-market principles and deregulation over community needs.”
Really? Let’s check the ACTUAL VOTE on Senate Bill 1350, which is the “2016 law” whose name Bear doesn’t mention because he doesn’t know the law or know Arizona history, or because he did zero research.
Voting in favor:
Sen. Lela Alston [D], Rep. John Christopher Ackerley [R], Rep. John M. Allen [R], Rep. Richard C. Andrade [D], Rep. Brenda Barton [R], Rep. Charlene R. Fernandez [D], Rep. Jennifer D. Benally [D], Rep. Reginald Bolding Jr. [D], Sen. Sonny Borrelli [R], Sen. Paul Boyer [R], Sen. Kate Brophy McGee [R], Rep. Mark A. Cardenas [D], Rep. Heather Carter [R], Rep. Ken Clark [D], Rep. Regina E. Cobb [R], Rep. Douglas “Doug” Coleman [R], Sen. Karen Elizabeth Fann [R], Sen. Edwin “Eddie” W. Farnsworth [R], Rep. Randall Friese [D], Sen. Rosanna Gabaldon [D], Sen. Sally Ann Gonzales [D], Sen. David Gowan [R], Sen. Rick Gray [R], Rep. Albert Hale [D], Rep. Matthew A. Kopec [D], Rep. Jonathan R. Larkin [D], Rep. Jay Lawrence [R], Sen. Vince Leach [R], Rep. Livingston, David Alan [R], Rep. Stefanie Mach, [D], Rep. Debbie McCune-Davis [D], Sen. Juan Jose Mendez [D], Sen. Javan D. Mesnard [R], Rep. Eric D. Meyer [D], Rep. Darin Mitchell [R], Rep. Steve B. Montenegro [R], Rep. Jill Norgaard [R], Rep. Justin Olson [R], Sen. Lisa A. Otondo [D], Sen. Warren H. Petersen [R], Rep. Celeste Plumlee [D], Rep. Franklin “Frank” M. Pratt [R], Sen. Rebecca Rios [D], Rep. Bob Robson [R], Rep. Macario Saldate IV [D], Sen. Thomas “T.J.” R. Shope [R], Rep. David Stevens [R], Rep. Bob Thorpe [R], Sen. Kelly J. Townsend [R], Rep. Ceci Velasquez [D], Rep. Jeff Weninger [R] and Rep. Bruce Wheeler [D].
That’s EVERY SINGLE Democrat except one who didn’t vote because he was absent that day: Rep. Diego Espinoza [D].
Rep. Tony Rivero [R] was also absent and didn’t vote.
Everyone who opposed it (let’s see how many Democrats you can find!): Rep. Russell “Rusty” Bowers [R], Rep. Noel W. Campbell [R], Rep. Mark W. Finchem [R], Sen. Anthony T. Kern [R], Rep. Phil Lovas [R] and Sen. Michelle R. Ugenti-Rita [R].
All Republicans, including election-denying Jan. 6 supporting “extremists” like Kern and Finchem.
And hmm, zero Democrats. Because they ALL VOTED FOR SB 1350!!!
The was at best a bipartisan bill, at worst, it’s Democratic Party-led bill that had Republicans largely supported, though there were six Republican defectors.
Check your facts before slamming Republicans as the enemy. Democrats supported this bill … blindly.
Thanks for posting this, CYF.
If there’s one theme to Mr. Howard’s “Chronicles” it’s deceit.
And it’s interesting, for the folks who do not wish to participate in STRs, there are several great options:
First, isn’t the City offering an easy path to attach long-term property restrictions on your parcels that will prevent their use as STRs? If you believe STRs are such an existential threat, it’s quite telling if you don’t leverage this option. Perhaps Mr. Howard can rally folks over to city hall to fill out the forms.
Second, you’ll can move into an HOA with STR restrictions or you can form one. Totally within your power.
But please stay away from me. I don’t want you to tell me what to do in my bedroom, and I don’t want you to tell me what to do with my bedroom.
Or take, say, my neighbor who is a single elderly woman with Parkinson’s and just beat cancer. She’s STRing part of her place so she can afford care. Unless the moral crusaders like Mr. Howard are going to leave their bar stools to buy her groceries or clean up after her… well, I’ll just leave it there since I have very unkind words for you that likely wouldn’t get past the censors.
Or take, say, the 4 homes within a block from me that are secondary homes. 3 are empty most of the year, and one is an STR while the owner is away. How about you leave them alone too.
Or take, say, the 3 homes that are STRs within a block from me which are owned by other Sedona residents so they can live their lives here as they wish. Yeah, leave them alone too.
I’m 100% certain that each of those owners will make better decisions about the use of their properties than you will.
Check Your Facts, you are correct; the bill was bi-partisan in terms of who voted for it. Of course, the real target for 1350 was the cities that had restrictions on overnight rentals in residential areas, which the Goldwater Institute saw as an infringement of property rights. Sedona was one of them that had restrictions.
I will go down with the ship on this one. The real reason that 1350 came into existence is that the Goldwater Institute, an extremely conservative, Republican think tank and perennial Arizona troublemaker, wrote the bill, made it happen, and found a state senator to submit it. And our conservative, let’s go along with the Goldwater Institute, government should be run like a business governor signed it.
The fact that both parties signed the bill is well known. The bill was not debated on the floor, which either means the Democrats agreed with the Goldwater Institute or were misled to think that this was really about retired folks renting out rooms to help make their lives easier. All evidence leads to the latter. Even the liberals were tricked into signing it.
Read this information from the Goldwater Institute for background.
https://www.goldwaterinstitute.org/gov-ducey-signs-bill-protecting-right-to-rent-out-home/
John Choi, AirBNB’s public policy manager continued to lean on legislators not to cap the number of homes that are short-term rentals.
Here is an article from 2019 demonstrating that the Goldwater Institute continued to have a great degree of control over the legislature regarding changing the laws on short-term rental.
https://news.azpm.org/p/housing/2022/9/2/212731-the-buzz-how-the-short-term-rental-market-is-changing-in-arizona/
The state legislature is controlled by the Republicans. and any serious attempt to change the 1350 to allow cities such as Sedona to cap it at a desirable percentage of their housing stock has been stymied by the industry lobbyist, and/or the conservatives led by the Goldwater Institute. At last count, 17% of Sedona’s housing is STR’s.
I will end with this: in many areas of life here in Arizona including issues like school funding, and this topic of short-term rentals, the Arizona Republican Party through the state legislature, and its governors have really thrown the state under the bus in so many ways.
If the government’s primary purpose is to provide services to improve the quality of life of its residents, then it’s obvious the Republican Party has a totally different agenda to benefit its “members” and that slice of society it gets its support from.
This dialogue opens the door for Bear Howard Chronicles to do a deep dive into everything in politics in the state of Arizona. More to come…
“either means the Democrats agreed with the Goldwater Institute or were misled to think that this was really about retired folks renting out rooms to help make their lives easier”
So the options are 1) Democrats supported wholly supported the Short-Term Rental law and Goldwater, or
2) all 30 or so of them are complete idiots?
So Democrats like Goldwater, or every Democratic lawmaker in Arizona is a moron, as you argue. Then it seems the Republicans deserve to run Arizona because the Democratic opposition totally sucks in this state. We got what we deserve then if the Dems happily get into bed with a “extremely conservative, Republican think tank and perennial Arizona troublemaker” or are the complete blubbering fools you declare them to be.
What a dumb “ship” to go down on. The HMS Titanic 2 has a prospective captain from Sedona.
HMShit Show Titanic
Featuring Major Bonespurs at the helm!
Same ship all MAGGOTS cruise upon daily huh? There’s an iceberg ahead for them too!
this is awesome article