Imagine owning a multi-million dollar Paradise Valley home (which is the highest-priced town in all of Arizona) and dealing with the noise, litter, and other inconveniences of short-term rental tenants at a nearby house. Paradise Valley, AZ, has attempted to create its own rules governing short-term rentals but has been hit with fines because its rules were going against the state of Arizona's short-term rental (STR) laws.
Why would the state allow such disruptive rental practices? Arizona is truly a destination state, and the state and towns earn revenue from STRs. These owners usually have to pay a permit fee and can be fined, plus they have to pay taxes on the Paradise Valley homes and income.
I was surprised to hear about a commotion that occurred at a multi-million dollar Paradise Valley home where police were called because of a loud and unruly party being held. It appears this house was purchased for the sole purpose of listing it on Airbnb and other short-term rental sites. The same thing has happened to Scottsdale homes and STRs in other towns.
We live next to a 2nd home where the homeowners live in a different state. When they're not here during snowbird season they will rent their house out. For the most part, the short-term tenants didn't bother us. In fact, our little barky dogs might have bothered them. But one set of tenants was loud, had their DoorDash order sent to our house because they didn't use the correct address, and had multiple cars parked in the driveway and on the street. The homeowners actually had to drive back to their 2nd home to clean up after their cleaning service because there was so much disarray. I don't remember how many trash bags had to be used. It made them rethink renting their home out, and they definitely won't rent to those tenants again. I know you can rate tenants on the STR websites, so I hope they gave these tenants a bad rating.
At other STRs with different property values, there have been fist fights and shootings, drug use, sales, and overdoses, nudity outside of the house (people were changing clothes in front of a neighbor's window), excess garbage strewn about the home and street, terribly loud noise and music, multiple cars parked on the street, including being parked in front of neighbors' driveways, and anything else you can think of when tenants throw rowdy parties at a Paradise Valley home they don't own.
There was a Scottsdale resident who almost moved out of his own home because he got nervous when the weekend was coming. He wondered if he'd be able to get any sleep with the next set of tenants. And it isn't just losing sleep. He couldn't even sit in his own backyard because of the loud music and noise. So he complained a lot, in fact, he was almost a nuisance complainer. The good news is that the owners of the party Scottsdale home ended up selling it.
Some of the owners of these Scottsdale and Paradise Valley homes listed as short-term rentals have learned that it isn't always such an easy way to earn some money. I remember reading about STR owners' big complaint being that they weren't able to rent it out as much as they expected to. That means they didn't earn what they anticipated. Other regrets are having short-term tenants damage the home, inside and out, and having complaints registered against them by irate neighbors that have to live near their party house. These complaints can cause fines to be levied. For some of these owners, it just isn't worth the hassle for the money earned and they end up selling.
Lax Laws in Arizona on STRs
In 2016, Arizona laws regulating short-term rentals were lenient. These laws actually prevented towns from creating their own regulations. Because of these lax laws, local areas like Paradise Valley and Scottsdale had their hands tied when it came to homeowner complaints. These STRs put a toll on local police departments that were called for all kinds of complaints, noise being one of the top annoyances. The towns' police departments had more work because of these types of complaints, yet the towns could not create their own restrictions on these STRs.
Paradise Valley Fought Back
Paradise Valley kept pushing for regulations that would help curb these issues and keep them within the state laws. The Town of Paradise Valley took a closer look at local ordinances drafted with the aim of protecting public health and safety in terms of fire and building code enforcement, health/sanitation amenities, transport traffic control, waste management, and pollution control. They worked on enforcement of zoning ordinances such as noise control, maintenance of properties, welfare protection, and other issues created by STR's. STR owners were required to provide their contact information not just to the city but to the public as well.
Paradise Valley also enacted the following prohibitions for STRs:
- not acting as a sober living property
- no illegal drug selling
- not housing any sex offenders
- not operating as an adult-oriented business or allowing pornography
The legal counsel provided Paradise Vally to finally cause legislators at the State Capitol to permit a statewide solution, the town's skillful response to this discovery proved to be the catalyst for statewide action. This small town did not give up and worked hard for its Paradise Valley home owners.
VRBO and Airbnb have launched their Community Integrity Program
More good news is that two of the most popular rental sites have enacted their own rules. They have enacted regulations for both STR properties and potential renters of these homes. They are attempting to curb raucous gatherings and keeping bad tenants from setting up rentals through their sites.
The bottom line is, these websites can only do so much to vet bad owners and tenants. They want as many available properties as possible so they can make money from their services. Supposedly, they are trying to identify and ban properties that seem to be mainly party properties. They are using a third-party company to help them with this.
It sounds easy enough to ban bad tenants, but they can easily have a friend or family member sign up for them the next time. And most of these STR owners don't want constant complaints, fines, and have their property ruined, but it isn't as easy to vet a short-term tenant vs. a long-term renter.
Another issue most don't think about is how one of these homes can hurt Paradise Valley real estate property values on the street they are located on. I'm wondering if our real estate disclosures will have a new section on location to an STR (doubtful but you never know).
The new laws will hopefully help neighbors that live near these Scottsdale and Paradise Valley homes have peace of mind and the ability to get some sleep when these homes are rented out. You can download and read the SB 1168 summary here. You can also read a published article here.Posted by Judy Orr on