Chandler proposes new rules for Airbnb rentals - SanTan Sun News SanTan Sun News

Chandler proposes new rules for Airbnb rentals

June 24th, 2020 development
Chandler proposes new rules for Airbnb rentals

By Kevin Reagan
Staff Writer

The city of Chandler is considering new regulations designed to better track short-term rental properties advertised on home-sharing platforms like Airbnb.

The proposed requirements would obligate owners of Chandler’s short-term rental properties to obtain a state tax license and register the homeowner’s name and contact information with the city. 

Homeowners would be obligated to appear at the property within one hour upon request from local law enforcement and short-term rentals would be prohibited from any nonresidential uses, according to a draft of new city codes.

Most of the proposed regulations conform to legislation passed last year that gave municipalities some more leeway in how they monitored and managed short-term rentals.

House Bill 2672 offered local and state governments more autonomy with how it could penalize short-term rentals that had become a nuisance to surrounding neighbors by becoming a hub for raucous, late-night gatherings.

These so-called “party houses” have earned a negative reputation across the Valley as rental homes that essentially operate as mini, revolving-door motels.

Ryan Peters, Chandler’s governmental relations manager, said cities have been finding it challenging to enforce any type of nuisance code with these rental “because the laws are typically enforced against people and not properties.”

Law enforcement can cite the tenant, he added, but that does little to prevent future disturbances since the rental might have a new occupant the following week.

Chandler’s proposed additions to its city enforcement codes are intended to add another layer of accountability by requiring a registration of all homeowners who rent out their properties for stays lasting less than 30 days.

“It provides us with a tool to address the bad actors,” Peters added.

Chandler currently has nearly 600 short-term rentals listed through Airbnb and VRBO, he said, and at least 100 already have a tax license issued through the Arizona Department of Revenue.

Peters said these 100 tax licenses have generated about $150,000 in revenue over the last two years.

If a homeowner is found to be in violation of the city’s proposed codes, they could be subject to a $500 fine and the Department of Revenue would be notified of the infraction. A homeowner who commits three code violations within a two-year period could be found guilty of a Class 1 misdemeanor.

The idea is to raise the stakes for homeowners, Peters added, so they have an incentive to discourage their tenants from causing any nuisance problems. 

Chandler City Council appears to be in agreement with the proposed code amendments as no member objected to the rules during a discussion on June 8. 

Some council members found the new regulations to not be too burdensome on the many short-term rental owners who aren’t a nuisance to their neighborhoods.

“This seems really modest,” said Chandler Councilman Matt Orlando. “I don’t think these are onerous, at least in my mind.”

The city will spend the next few weeks gathering feedback on the code changes and will ask the council to authorize them in the fall.

The new rules come at a time when the short-term rental industry is attempting to recover from the chaos that’s been recently caused by the COVID-19 pandemic.

Reservations made through websites like Airbnb suddenly started to diminish in March as tourism events started to shut down and countries began restricting the movement of travelers.    

But Airbnb said it’s begun to rebound from the economic slump and the website has started to see bookings return to pre-pandemic levels. Over the last 30 days, the company said Arizona’s occupancy rate for Airbnb properties has nearly doubled. 

The topic of short-term rentals has been a recurring one at the Arizona Legislature as Airbnb has become increasingly popular in recent years for vacationers seeking alternative options.

In 2016, Gov. Doug Ducey limited local control over these properties after he signed a bill that prohibited cities from banning the listing of short-term rentals within their communities.

As a result, Valley neighborhoods found little recourse from their local governments when dealing with a residence that had been turned into a party house.

Residents subsequently began showing up at the legislature and telling lawmakers how their communities were being disrupted by a steady stream of rowdy parties.

One of these disturbances ended up turning deadly last year in Chandler. In June 2019, a 26-year-old man was shot and killed during a party at an Airbnb rental near Ray Road and McClintock Drive.

The shooting came only a few weeks after Ducey signed the legislation that allows cities to amend code regulations for short-term rentals.

“Most short-term rental homeowners are good neighbors,” Ducey said in May 2019. “HB 2672 provides a straight-forward enforcement mechanism to penalize ‘party house’ operators for not upholding existing laws on their properties.”

Though the bill passed through the legislature with bipartisan support, Chandler’s elected representatives were split on their support for the new state regulations.

Republicans J.D. Mesnard and Jeff Weninger voted against HB 2672, while Chandler’s four Democratic lawmakers – Sean Bowie, Jennifer Pawlik, Mitzi Epstein, and Jennifer Jermaine – voted in favor of the bill.

Mesnard, who represents District 17, introduced new legislation this year that would have reclassified the tax status of short-term rentals as a class 1 property, which are assessed at a rate of 18 percent.

But the COVID-19 pandemic abruptly ended this year’s legislative session sooner than expected and didn’t give Mesnard’s bill a chance to move through the House of Representatives.

State Rep. John Kavanagh, R-Fountain Hills, also introduced new legislation this year that would have given cities greater authority to crack down on short-term rentals.

That bill failed to earn enough votes to pass through the House after some of Kavanagh’s fellow Republicans joined some Democrats in opposing more controls as a violation of property rights.

The city of Chandler expressed support for both bills before legislators adjourned in May.