The troubles began on May 13, 2016, when Arizona’s then-Governor Doug Ducey signed SB1350. The new law stripped power from cities and municipalities. They could no longer prohibit short-term vacation rentals. They could no longer regulate them outside of basic safety concerns.

Proponents of the bill argued that the bill would divert money from national hotel chains directly into local economies. Homeowners could rent rooms to help with mortgage payments.

Arizona State Representative Bob Thorp and fellow lawmakers were led to believe the bill was to help homeowners, allowing them to make extra money renting out spare rooms. In 2019, he told an angry group of Sedona citizens, “We never anticipated that somebody would go into a neighborhood, purchase a home and turn it into a mini-hotel.”

Ducey’s SB1350 – dubbed “the Airbnb bill,” the law purporting to help homeowners make extra money – opened the doors to out-of-town investors. A new, largely unregulated investment opportunity was born in Arizona, and cities struggling with housing shortages could do nothing to rein in the consequences. Arizona, an outspoken advocate for state rights on the federal level, took away city rights on the state level. 

From 1995 to 2017, a Sedona ordinance prohibited short-term rentals less than 30 days. With SB1350, the state stripped the city’s right to enforce its law.

Vacation rentals purchased by out-of-town investors contradicts what Thorp claims he and fellow legislators were told before they cast their votes on SB1350. If the bill’s original intention was to help homeowners pay their mortgages and pump money into local economies, then the bill is at least partially flawed. 

Perhaps the Los Angeles City Council found a better solution to the problem. In December 2018, they took action to prevent large-scale investors from converting homes into vacation rental properties. The law restricts short-term rentals to primary residences. 

Arizona lawmakers have proposed a number of amendments, including section repeals to SB1350. The most recent came from Arizona State Representative Selina Bliss from Prescott. Her bill, HB 2047, would allow cities to limit the number of vacation rentals based on a percentage of total residentially zoned buildings.

Sedona, slightly larger than Page in population, has 6,426 housing units according to the U.S. Census bureau. AirDNA reported 3,230 active short-term rentals in Sedona for the first quarter of 2023, compared to 440 units in Page. In three years, short-term rentals in Sedona grew by 815 units compared to Page’s 20-unit growth. Of Page’s 440 vacation rentals, about 350 are homes and 50 are private rooms.

Ducey signed SB1168 in July 2022. The new law gives cities the authority to require permits and annual fees to operate short-term rentals. Cities can also levy fines or revoke permits for noise violations, property maintenance and unruly guests. Still, the bill doesn’t address the larger problems: the housing shortages for workers and the rising costs of home prices and monthly rentals resulting from the shortages.

Vacation rentals is a frequent topic at Page City Council meetings. Mayor Bill Diak told the Chronicle that City Attorney Josh Smith is working on an ordinance to utilize some of the authorities returned to cities by SB1168.

“VRBOs, unfortunately, are treated as a regular residential property, but it’s not to the city’s liking,” Diak said. “If you’re running a VRBO, it’s considered a residence, not a business. So that is a flaw in our state system that I have fought for the last four years, and I've got about another year and a half to continue to fight that process, to change that, because it is not right.”

Many cities in Arizona have already adopted new ordinances, including Sedona, Scottsdale, Prescott and Mesa. Cities may charge up to $250 for short-term rental permits, or the cost of issuing the permit, whichever is less. Cities can also require background checks and prohibit registered sex offenders from renting.