City of Lake Havasu officials have had a mixed reaction to the short-term rental bill signed by Gov. Doug Ducey last week, which gives cities a few more options for locally managing vacation rental properties. Mayor Cal Sheehy and City Manager Jess Knudson both said the bill includes some tools that could be helpful for Havasu, but it doesn’t align with the local autonomy the city has been pushing for for a few years. .
The new law was passed by the Legislature as Senate Bill 1168 in the 2022 session and was signed by Ducey on Wednesday. It will come into effect 90 days after the end of the session. The bill provides local governments with a variety of previously unavailable options for regulating short-term rental properties at the local level, including requiring a local regulatory permit or license, requiring a 24-hour local contact to handle complaints or emergencies, and mandatory notification of neighbors in the immediate vicinity of the short-term rental. The bill also caps the civil penalties that can be imposed on short-term rentals.
SB 1168 does not allow local governments to prohibit short-term rentals, or limit the length of a lease on a rental property.
“It gives us some good tools that cities can use to respond to some of the bad actors in the short-term rental industry,” Knudson said. “We’ve always said that it’s 1% of short-term rentals that cause 99% of the problems. It will be a small step towards being able to solve these short-term rental problems. It doesn’t go far enough, but it’s a small step in the right direction.
Senator JD Mesnard and Representative Steve Kaiser, both Republicans, co-sponsored the bill in the Legislative Assembly. Following the bill’s signing, Mesnard said it provides practical solutions to combat “bad apples” in the short-term rental industry while protecting the property rights of responsible hosts.
“This meaningful compromise will help end misguided efforts to over-regulate or outright ban short-term rentals in communities, which would threaten the state’s visitor economy and undermine Arizona’s balance sheet. when it comes to supporting property rights,” Mesnard said in a press release Thursday.
The bill was also backed by Airbnb, which is a major booking service for short-term rental properties.
“On behalf of the thousands of hosts across Arizona who depend on supplemental income from renting out their homes, we commend Senator Mesnard and Rep. Kaiser for their leadership and determination to work with all stakeholders on this project. of law,” said John Choi, director of public policy at Airbnb. a statement released Thursday. “SB 1168 is proof that elected officials and community stakeholders can come together to craft fair and sensible short-term rental rules that address community concerns and preserve the economic benefits of short-term rentals.”
The City of Lake Havasu has been pushing to return local control over vacation rental properties every year since that power was removed by the state legislature in 2016. Two years prior, in 2014, Havasu passed an ordinance on short term rentals which has established a “good neighbor”. Program” which encouraged communication between short-term rental properties and their neighbors. It also required rental properties to register with the city and provide 24-hour contact, among other things. City officials say the ordinance has worked very well for residents and the rental industry, but it was rendered unenforceable by new state statutes passed in 2016 and the city is pushing to reverse that. decision since.
Although the new law returns some control, both Sheehy and Knudson said Havasu will continue to push for more in the future.
“We’re not done yet. We advocate for full local control that allows us to manage short-term rentals as it makes sense for our community and allow other communities in the state to do the same,” Sheehy said. “So we will continue to advocate and develop legislation for consideration by the legislature that gives us that ability. There is really successful short-term rental management across the country and we can use some of these best practices to help manage it locally, or at least allow the legislation to have this conversation about how it works for our community. We are grateful for what was passed this year and signed by Governor Ducey, but we would still like the opportunity to use some of these best practices in use across the country to help manage it at the local level.
Knudson said the city’s end goal has always been local self-government.
“The ability of cities and towns to make those decisions as opposed to legislation that allows cities to take one step or another,” he said.
Although Havasu officials were hoping for more, Sheehy and Knudson said the recent changes give additional tools that could be included in the city’s ordinance when the law takes effect in late summer.
Knudson said city staff will review the bill to determine how the code can be changed under the new law with the goal of providing suggestions and options to city council within the next 30 to 60 days.
“We’re going to explore all the options that this bill allows us to do,” Sheehy said. “We will have these discussions with the city council. But certainly one of the areas that we have championed throughout this process has been the local registration process as well as neighbor notification. So I imagine those would be at the top of our list, but we’re going to explore all the avenues that the bill allows us to do.
But Knudson said both of these tools have caveats in this particular bill. He called the registration process “a step in the right direction” with a little more bite than the city has had in the past. But he said the bill is also very specific about what it would take for the city-issued license to be revoked and that Havasu hoped to have a little more leeway to make those decisions on his own. As for notifications, Knudson said the bill would notify neighbors immediately adjacent to the vacation rental property, but Havasu had pushed to allow notifications to all neighbors within 300 feet of the property.
Knudson said staff are also looking at what some other Arizona cities are doing with short-term rentals as they prepare for a possible update to their own ordinance.
“Some cities have gone further than legislation,” Knudson said. “We are looking very closely at Scottsdale and other communities to see what other tools we can incorporate into Lake Havasu City Code. The goal would be to update our ordinances when state law takes effect, but that will take some time.