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The short-term rental market has exploded in Arizona, frustrating longtime residents

It was a bit like group therapy when these residents of Scottsdale met recently at an Old Town restaurant. 

Adeolu Adebayo says he dreads the weekend, not knowing what havoc might happen. Stephanie Nestlerode hears constant noise and sees a “constant rotation of strangers.” Cheryl Triplett has had people trying to enter her home at 4 a.m., and was attacked by guests who brought their dogs. Kristie Hudson’s neighboring backyard was full of “10 extremely drunk screaming adults that I can hear inside my home.” Her front yard is often filled with trash. She observed a drug deal in the alley. 

These longtime Scottsdale residents are fed up because they feel their neighborhoods are being taken over by short-term rentals and their transient visitors. Triplett says the noise and the nuisance never stops.

“We’ve suffered property damage with our landscape lights. The garbage has just been piled up and left for days. [We were] woken up in the middle of the night from women and men just, 'WOOOOO HOOOOO!' hooping and hollering at the top of their lungs.”

Triplett even claims her underage daughter and her friends were harassed by unruly and rude guests leering over her property wall. She regrets living here now. 

“If somebody had said that I would end up living next door and across the street from five short-term rentals, we never would have bought on our street," said Triplett.

Nestlerode has tried complaining about the partygoers near her home.

“I have been served two times, legally, for calling the police for interference with the short-term rentals. As they described, I don’t particularly feel qualified to be involved with them, because they’re so intoxicated, they throw trash over the property wall," said Nestlerode.

Adebayo had a similar experience when he tried to push back.

“When they knock over trash cans into, you know, my car, the property manager at the Airbnb sends us threats in response. So, the people who are in charge of taking care of these places are defending their property by threatening people who are getting in the way of their money,” Adebayo said. 

Hudson says she’s beginning to see the impacts, with young families leaving the area.

“I know of a young couple who did live in my neighborhood. It wasn’t that long ago [that] the wife got pregnant and they sold their house and moved away because they realized they didn’t want to raise a baby next door to a short-term rental that catered to bachelorette parties.” 

She bought her home before state law usurped local control of short-term rentals. While a homeowners association would protect her against transient neighbors, Hudson says it wasn’t an issue before things suddenly changed in 2016.  

“We purposely brought in Scottsdale in a non-HOA because we also wanted to paint our house a different color," said Hudson. "And the city of Scottsdale also protected us as far as short-term rentals because Scottsdale did not allow residential properties to be rented for less than 30 days, and then the state took that away.”

Specifically, Senate Bill 1350, the 2016 law that severely restricts how cities and towns in Arizona can regulate those rentals.

Last year, Gov. Doug Ducey signed another bill,  Senate Bill 1168, designed to mitigate the situation by giving local governments back some of the oversight they used to have, by allowing them to require licenses and police the more troublesome partygoers.  

But Kate Bauer of the Arizona Neighborhood Alliance, which has been fighting against what she calls the commoditization of housing, says it’s not enough. They want restrictions on the amount of short-term rentals that can be allowed in an area.

“Every year it gets a little bit higher as far as how many bills come to the floor to try and help support us on this for local control. But this year, none of them moved. None of the bills moved.”

While they’ve seen their housing prices increase in the short term, these residents fear short-term rentals will ultimately do long-term harm to their home value.

“When there are families who can’t afford housing, meanwhile there are houses that are vacant just on our street, that’s just wrong,” said Adebayo.    

"Basically your private property is no longer yours,” said Nestlerode.

Triplett feels it might be too late to get out. “We tried to sell our house and get out. But we overheard a couple with a child say they didn’t want to live next door to a short- term rental. And who can blame them!” 

What Arizona officials — and Airbnb — are doing to address the problem

Listen to Part II

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According to census figures and the short-term rental tracker AirDNA, there were more than 60,000 short-term rentals in Arizona, accounting for about 2% of the housing stock statewide.

However, some areas are much higher, like Sedona, where it’s estimated that more than 30% of homes are used for rental income.   

In Scottsdale, it’s about 5%, but with a much larger share in some of the most touristy areas, like Old Town.

Scottsdale’s Mayor David Ortega calls them unattended, mini-hotels and is pleading for more local control over the amount of short-term rentals that can operate in his city. 

“There should be a cap determined by the local community. Some legislators say ‘Oh, we’ll make it 10%’ — well, 10% is already double of what Scottsdale has already. That’s unacceptable,” said Ortega.   

However, Ortega’s hands are tied by the state thanks to that 2016 law that overrides their authority. Another law passed last year, gives some of that authority back, but only when it comes to enforcing safety rules and controlling unruly visitors.

“What council has done is we have passed an ordinance to hold the ownership liable for both to carry insurance, to fence pools, to have a contact individual.”   

But he says enforcement remains difficult.

“We look for compliance, then you know, 48 hours later those people are gone,” said Ortega.

State Sen. Christine Marsh calls it a nightmare for some communities in her district. Marsh is a Democrat who represents parts of Scottsdale, along with Paradise Valley and a chunk of north Phoenix where short-term rentals are also prevalent.

“I think a lot of the problem comes from when it’s investment homes with no residents on property.”

Marsh supported the 2022 measure, Senate Bill 1168, that tried to mitigate some of the problems associated with short-term rentals.  

“Thankfully, we did pass a bill that allowed a little bit of control back to municipalities, but not enough to really crack down.”

The League of Arizona Cities and Towns, a coalition designed to represent the interests of state’s local municipalities, worked with legislators on that bill.

Tom Savage is the League’s Legislative Director.

“Most importantly what that law did was allow cities to implement a regulatory license–and that was something that was lacking in the law which passed in 2016,” Savage said. 

Savage says that enables municipalities to go after the bad acting properties that are causing nuisance in neighborhoods that have repeatedly violated local ordinances. But he admits that doesn’t address a larger housing issue.

“Really, the proliferation has taken a lot of housing stock off the market that would have otherwise gone to permanent residents in our communities, and instead, they’re being used as de-facto boutique hotels. That issue has not been addressed," said Savage.

He says they want to go back to the Legislature to ask that cities be allowed to put their own density caps and/or zoning regulations to control the amount of short-term rentals in their communities.

That will take a lot of lobbying — and a lot of money, to compete against companies like Airbnb. 

Christopher Nulty is their director of Global Communications.

“You know, we’re particularly proud of the fact that we have done far more than any of our competitors to develop technology to make sure that we are preventing parties, to develop risk scoring of reservations and we’re gonna continue to do even more of that.”   

Nulty claims that only a small fraction of Airbnb reservations result in allegations of nuisance parties and those that are reported are taken very seriously.

As for capping the number of short-term rentals that can operate, that’s another story.

“When it comes to amount of STRs that make sense in a neighborhood, we want to know the historic context of how STRs have existed in that city previously and also just to make sure that we’re not limiting people’s ability, particularly to rent out their primary residences when they’re not home.”   

Meanwhile, the amount of homes being used for short-term rentals continues to grow exponentially in places like Scottsdale, where Mayor Ortega says it’s affecting the quality of life.

“Scottsdale has always had somewhat of a seasonal population, whether there’s a second home or baseball players coming in for spring training," said Ortega. "But those were generally one or two month stays, they weren’t one-night stands or weekend bashes. And that’s really hurt our community.”

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Phil Latzman is an award-winning digital journalist and broadcast professional with over 25 years of experience covering news and sports on a multitude of platforms.