Arizona vacation rentals could face new insurance requirements
Corrections & Clarifications: An earlier version of this article misstated some of the provisions in Senate Bill 1379. Changes to occupancy requirements were removed from the proposal prior to its passage.
Arizona lawmakers are giving bipartisan support to new rules on neighborhood properties used for short vacation stays, but cities that have fought with problem rentals say the measure falls short.
On Wednesday, lawmakers voted 27-3 in the Arizona Senate to support Senate Bill 1379, which allows municipalities to require them to have liability insurance.
The changes passed by the Arizona Senate on Wednesday are supported by vacation-rental companies Airbnb Inc. and Expedia Inc., but the League of Arizona Cities and Towns has asked lawmakers to allow municipalities to further restrict such rentals as municipalities in other states have done.
"We don't think it goes far enough," said Nick Ponder, a lobbyist for the League of Arizona Cities and Towns, during a February hearing on the bill.
“We don’t see substantive changes that address our real concerns, which is the ability of local governments to do zoning as it pertains to short-term rentals."
He said cities and towns across the country have implemented zoning regulations on short-term rentals to address residents' concerns.
Paradise Valley Mayor Jerry Bien-Willner also spoke that day, agreeing that the bill doesn't do enough.
But the rental platforms support the limited measures.
"We feel it is a reasonable bill that does address the concerns we've heard from policymakers," Airbnb spokesman Jonathan Paton said at a February hearing on the bill.
Cities, neighbors seek ways to rein in problems
The issue has simmered since 2016, when Gov. Doug Ducey signed a bill that prevented municipalities from imposing any restrictions on vacation rentals other than existing noise ordinances and other laws that hard-partying vacationers often ignored to the chagrin of neighbors who found themselves living next to rental properties year-round.
People who live next to houses rented to vacationers frequently complain of noise, rude and drunken behavior, strangers in their neighborhoods and a general displeasure with businesses operating in residential areas.
The state Legislature passed limited restrictions in 2019 targeting rental houses used for special events like weddings. But lawmakers lacked enough support to pass the larger measures that neighbors wanted.
Rental platforms such as Vrbo and Airbnb brought property owners to the Capitol last year to lobby lawmakers against approving any restrictions that would limit their ability to earn money from rental properties, which many had made a primary source of income.
As originally drafted, SB 1379 would have allowed municipalities to limit rental occupancy. But that portion of the bill was removed before the final vote.
A group called Arizonans for Responsible Tourism Recovery, which represents vacation-rental owners who support mild reforms, supports the bill.
“As a Scottsdale resident and vacation-rental owner, I’m grateful to the bipartisan group of legislators who struck an appropriate compromise today by approving SB 1379," spokesman John Hildebrand said in a prepared statement after Wednesday's vote.
"This legislation will protect neighborhoods from irresponsible hosts without pulling the rug out from under the vast majority of us who have followed the rules and support the state’s visitor industry.”
Parties targeted: Vrbo suspends 1-night rentals in Arizona
The group supports allowing municipalities to "crack down" on nuisance properties while letting property owners continue supplementing their income by serving as vacation-rental hosts.
The bill now needs a vote in the House before it's sent to the governor.