Arizona lawmakers eye vacation rental regulations

The Arizona State Legislature will likely take another stab at returning some controls over short term rental properties to local governments during the 2022 State Legislative Session.

Short term rentals have been a hot topic in Lake Havasu City and throughout Arizona since 2016 when the State Legislature passed a law that stripped cities of any right to regulate vacation rentals. Since then, the legislature has debated several bills to loosen the moratorium on local regulations with varying degrees of success but Rep. Leo Biaisucci said it is clear that more needs to be done.

“It really was a mistake and it has turned into a bit of a disaster,” Biasiucci said of the 2016 legislation. “We are seeing now big corporations are coming in and hedge fund companies are buying 30 or 40 homes. Now you don’t have any rentals available and rental rates are skyrocketing. Nobody can really afford to live anywhere. So it is going to be important for us to try to reverse that and try to give the power back to the cities to handle this. Every city is different and so every city should be able to determine how they want to handle these things.”

Lake Havasu City officials already have a pretty good idea about what regulations they would like to see in Havasu. A couple years prior to the 2016 state statute, the Havasu City Council passed an ordinance that, among other things, required vacation rental properties to register with the city and provide a 24-hour contact, allowing any issues with rentals such as noise or trash to be resolved right away.

City officials, including Mayor Cal Sheehy and City Manager Jess Knudson, have said that they feel the ordinance worked well for everyone involved until the 2016 law rendered Havasu’s ordinance unenforceable. Since 2016 Havasu has been pushing for the state to return enough control to cities that its 2014 ordinance could be reinstated.

Biasiucci said there likely won’t be one huge fix proposed in the legislature in 2022 – it is an issue that he says will take some chipping away at. He said he likely will not introduce legislation regarding short term rentals himself, but he expects a legislator to run something aimed at returning local controls over the short term rental industry.

“We are all working together to push something through,” Biasiucci said. “We are going to try to do something that gives a little more control to the cities so they can handle the situation. The biggest problem is the party houses and there is nobody that is really held responsible for these homes. When a hedge fund in New York owns 50 of them there is no way to get a hold of anybody – from local cities, police, or whoever else. So I know that the bill will be tailored to figuring out how to give more control back to the cities instead of doing it all at the state level.”

Although Biasiucci said he isn’t sure exactly who will be running the bill yet, he said he will be supporting it, along with State Sen. Sonny Borrelli (R-Lake Havasu City).

Over the past few years, the number of short term rentals in Lake Havasu City appears to be increasing quickly. According to AirDNA, a company that provides data from both Airbnb and Vrbo, there were 1,573 active vacation rentals in Havasu during the third quarter of 2021 – the most recent quarter of available data. That number has increase each quarter since the beginning of 2020. For comparison, Havasu had 1,051 active rentals in the third quarter of 2020, 948 in the third quarter of 2019, and 724 short term rentals available during the third quarter of 2018.