To be or not AirBnB?: Effect of SB 1350 redefines affluent neighborhoods

It was a full house Wednesday, Aug. 7 at the Scottsdale Community Design Studio as local residents decried the influx of partygoers renting homes in what they say once were tranquil neighborhoods. [Independent Newsmedia/Arianna Grainey]

In 1980-something, iconic comedian and A-list movie star Eddie Murphy released a single, “Party All the Time,” which was met with confusion, exuberance and later identified as a musical hallmark of a brilliant film and comedy career that continues today.

In summer 2019, the party-all-the-time mantra has reached a fever pitch following the creation of Arizona Senate Bill 1350 — and adoption of what some call the ‘AirBnB’ bill — as short-term rental operations are sprouting in desirable neighborhoods to the confusion and frustration of private homeowners.

SB 1350, which then-Arizona Senate Majority Whip Debbie Lesko, R, sponsored, went into effect at the end of 2016 and restricts local cities and towns from regulating or restricting the use of vacation rentals or short-term rentals within municipal boundaries.

Scottsdale Assistant City Attorney Luis Santaella, listens as local residents discuss short-term rental concerns. [Independent Newsmedia/Arianna Grainey]

The City of Scottsdale has had regulations prohibiting any rental of a home for fewer than 30 days since the late 1950s, which many say was an effort to protect the tourism industry — specifically hotel room rates and occupancy.

An effect of the sharing economy, championed by the Arizona Legislature, appears to be local municipalities feeling the burn of party time encroaching upon tranquil evenings traditionally reserved for resort and commercial properties.

The Town of Paradise Valley and Scottsdale are no exception.

A new neighborhood dynamic

Scottsdale appears poised to develop rules on what can and cannot occur at a short-term rental property; however, Paradise Valley already has a dog in the fight.

“Short-term rental properties are governed by the same noise, trash and nuisance ordinances as any other residence,” said Paradise Valley Town Manager Jill Keimach.

“Most recently and effective is the town’s recent adoption of an Unruly Gathering Ordinance in response to our police officers having to make repeated calls to calm unruly parties or gatherings. In a community like Paradise Valley where we have limited government — and limited resources — it is important to make sure our resources are directed where they are most effective throughout the town, rather than continually responding to just a few ‘party houses’ in the community.”

Paradise Valley Town Manager Jill Keimach in action in the neighboring municipality. [File photo]

Paradise Valley Town Council unanimously approved the Unruly Gathering Ordinance in 2017.

“Looking forward, the town will be looking at ways to identify all of the short term rental properties in the town and require that each have an identified designated emergency point of contact, based on the changes made to ARS § 9-500.39,” Ms. Keimach said of new explorations considered. “This new law also requires licensing with the Department of Revenue and prohibits short-term rentals from being used for nonresidential purposes.”

Ms. Keimach reminds in all the world, there is only one Town of Paradise Valley.

“Our resorts continue to thrive in Paradise Valley since most visitors come here to enjoy the luxury, exceptional service, restaurants and entertainment areas our resorts provide, she said. “It is important, however, to ensure all rooms being rented through either a resort or the shared economy — AirBnB or VRBO — be held to the same standards to ensure the same tax regulations apply, the health and safety of visitors are consistent, and impacts to the surrounding neighborhood and town are minimized.”

— Jill Keimach, Paradise Valley town manager

The short-term rental market ought to be treated as other resort operations, Ms. Keimach contends.

“Resorts must post mandatory safety and rate information in each room, have designated fire egress, and undergo inspections to ensure compliance with commercial health and safety requirements while those important safety regulations do not currently apply to single-family, short-term rental properties,” she said.

But more efforts to bring the shared economy in-step with traditional metrics are emerging from the Arizona Legislature, Ms. Keimach explains.

“Fortunately, with two recent bills sponsored by Rep. John Kavanagh, all online reservation companies are required to be licensed for the purposes of collecting and remitting sales taxes … and those taxes are now clearly and fairly being allocated as they have in the past to local municipalities to cover enforcement and other service impacts,” she said.

“A second bill also sponsored by Rep. Kavanagh further regulates vacation rentals by allowing municipalities to get a local contact for our police officers to use in the case of a disturbance, nuisance or emergency. Both of these important bills were supported and signed by Gov. [Doug] Ducey and move us closer to ensuring all short-term room rentals in resorts and within the shared economy are treated similarly.”

Scottsdale Planning Development Area Director Raun Keagy outlines the short-term rental discussion Wednesday, Aug. 7. [Independent Newsmedia/Arianna Grainey]

The Scottsdale eruption

Numerous Scottsdale residents were in an uproar this week at the Community Design Studio, 7506 E. Indian School Road, sharing stories of neighborhoods overtaken by large, loud parties and lewd acts.

With a show of hands on Wednesday, Aug. 7, the majority of people supported a proposed nuisance ordinance to address the problems with long- and short-term rentals and holding property owners accountable for the actions of those residents and/or guests.

The draft outlined what constituted nuisance parties and unlawful gatherings and a series of notices and fines for repeat offenders. Residents were encouraged to comment in person at the public hearing, complete comment cards, and even submit comments online before the proposed ordinance goes before City Council this September.

Scottsdale residents one after one delivered reports on what is occurring in their neighborhoods Wednesday, Aug. 7 in Old Town. ([Independent Newsmedia/Arianna Grainey]

Many people commented that their weekend-long disturbances started as early as 9 a.m., throughout the day, and overnight after 2 a.m.

Representing both sides of the controversy, people spoke for and against homeowners renting their properties, but the consensus was that residents wanted their elected officials to take the lead in resolving the issue.

“My noise starts at 9 a.m. on the patios,” said a woman who routinely calls the police and endures retaliation by tenants throwing eggs and other food on her patio and shed.

For the 16 years Gary New has lived in his neighborhood, he said it was no problem until a little more than a year ago when groups of young adults between 20-40 years old would put their money together to rent a house for three to five days at a neighboring, five-bedroom home.

“They spend the entire time staying in the yard, making a lot of noise. They’re out by the pool at 9 a.m., hooting and hollering all day long. We have to call the police,” Mr. New said. “They are taking away from the character of a single-family neighborhood. It’s very demoralizing. We love our neighborhood and we don’t want to move.”

Mr. New described the rentals as hotels without a manager on site. In addition to the noise and disruptions, he said there were incidents of crime, citing a burglary that happened after some of the short-term tenants left; the house was robbed of TVs and items.

“We need some help from our state legislators. They are the ones who took the rights from the city,” he said, adding that legislators are unaware of the “reality” that the homes are problems and it is not what they anticipated.

“My neighborhood has lost its integrity. It’s not safe for our kids,” said Mary Grace Wargo. “Is Scottsdale the most livable city anymore? I beg to differ.”
She said she is trying to find a solution and questioned the low amount assessed for fees when people can collect $100 per person for parties. She suggested increasing the recommended fines to send a stark message.

Even with imposing fines, one resident noted aloud the fines were nothing compared to how much money the owners were making off renting their places to third-party operators.

Editor’s note: Managing Editor Terrance Thornton can be reached at

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