The Scottsdale City Council

On July 1, the Scottsdale City Council voted unanimously to accept a list of recommendations from the city’s short-term rental working group aimed at addressing concerns about the negative impact of the rental properties on the community.

Following inaction by the Legislature this year, Scottsdale City Council is considering a number of new regulations and enforcement measures to combat longstanding problems involving short-term rentals.

The rental properties – often advertised through popular websites like Airbnb and VRBO – have been a source of complaints that the properties are essentially small hotels operating in residential neighborhoods and cause issues with noise, trash, parking, partying, lewd behavior and drinking and drug use.

A 2016 state law prohibits municipalities from banning or regulating short-term rentals specifically. 

In 2019, Council took some actions to curb partying and illicit activities at the properties with ordinances that levy heavy fines on property owners and renters if they host “nuisance” parties or unlawful gatherings. Violators can face fines and fees of up to $4,000 for repeated violations. 

The new ordinances complied with the 2016 law by applying to all residential properties, not just rentals. 

Even with those ordinances in place, however, complaints have persisted.

Records obtained by the Progress showed police issued 143 notices of violation of either the nuisance party or unlawful gathering ordinance between Oct. 24, 2019 and Feb. 1, 2021, resulting in fees of $62,750.

The city recorded 17 violations in November and December 2019 in the months after the ordinances went into effect and 16 violations during the same time frame in 2020.

The city can also fine property owners who fail to register a short-term rental, fail to have a transaction privilege license tax number or operate the rental for non-residential use like an event center.

Of 316 cases involving violations, “all of them have come into compliance without the need to issue a civil citation,” former Neighborhood Planning Services Director Raun Keagy told the Progress earlier this year.

Still, there is evidence only a fraction of active short-term rentals in Scottsdale are registered with the city.

Councilwoman Linda Milhaven, who served on the city’s short-term rental working group, said there are as many as 5,000 short term rentals in Scottsdale today.

In February, Mayor David Ortega said there was only an estimated 600 rentals registered with the city.

Lawmakers this year introduced three different bills addressing short-term rental issues, including one sponsored by Rep. John Kavanagh, R-Fountain Hills, that would have returned some regulatory powers to cities that were stripped away in 2016.

None of the bills passed.

So in March, Council formed a short-term rental working group tasked with creating recommendations for what could be done to prevent or minimize the adverse impact of short-term rentals. 

The group included Milhaven and Councilwoman Betty Janik. residents, hotel industry representatives and two Realtors, including one who operates a short-term rental property.

The group, which met six times this year, came back with an extensive list of recommendations on July 1 that Council unanimously accepted.

A central goal of the recommendations –  a mix of ordinance tweaks, increased enforcement and additional education for residents, property owners and renters – is to mitigate the negative impacts of short-term rentals without violating state law.

“I want to emphasize everybody thinks we can answer all the problems,” Janik said. “In reality, there are laws and ordinances that govern how we have to respond legally to all these situations.”

To do that, the group recommended several changes to improve enforcement of the existing party and unlawful gathering ordinances.

That includes improving communication between Scottsdale police and code enforcement, the two city departments charged with enforcing the ordinances, in order to identify repeat offenders.

“What we learned is if there is a problem property an officer may respond to a call for service and not understand that there’s a pattern here…and so having these folks work more directly will help us identify problems more promptly and quickly and address them more effectively,” Milhaven said.

Milhaven said the city has already implemented some changes, including giving police access to code enforcement’s complaint tracking system. 

Council also created a short-term rental response team of six police officers, one sergeant and code inspector. The new unit is still in development and staff will likely have to come back to council for funding.

The working group also recommended ways to increase compliance with the requirement that all short-term rental operators register properties with the city and provide contact info for use in the event an emergency or complaint. 

Milhaven said major booking sites Airbnb and VRBO – which represent up to 70 percent of STR bookings in Scottsdale, according to city staff – have agreed to cooperate with the city and have already notified operators about the registration requirements.

Both websites also agreed to remove repeat offenders if the city shares complaints with them, she said.

She said the city is also considering contracting with a software vendor to better track properties operating across all booking platforms in Scottsdale.

Milhaven said city staff is also going through registered properties to ensure they have a registered tax license so the city and state can collect taxes owed by those owners.

The city is also looking at increasing upping fines for violations of the nuisance and unlawful gathering ordinances to the maximums allowed under state law.

Those maximums range from $750 to $2,500 for property owners and $250 to $2,000 for occupants based on the number of previous violations.

Additionally, Council signaled a desire to recategorize violations of the ordinances to civil penalties that will be adjudicated through City Court in order to beef up the city’s ability to collect the fines.

Currently, violators are assessed a police service fee.

“So right now if someone gets a notice of violation it’s sort of like getting a bill from the city and we really don’t have a way to collect that efficiently,” Milhaven said.

All the changes to the city code will have to come back to Council at a later date for approval.

The city will also likely adopt changes requiring a one-hour response time by property owners to complaints with additional fines for delays.

Beyond those code changes, the working group recommended the city improve education for residents, property owners and renters to increase compliance.

That includes improving the city webpage for reporting complaints and creating guides and workshops for concerned residents.

And the city won’t stop fighting to reverse the 2016 law that many critics blame for the short-term rental law.

The final recommendation from the working group centered on continuing the lobbying effort at the legislature in an attempt to reverse the 2016 law and return regulatory power over short-term rentals back to cities.

“We really feel that these recommendations represent what Scottsdale can do now, and how to best help the citizens be more comfortable and more informed given this sort of horrible policy  we’re living due to the state stripping cities of their powers to regulate short-term rentals in 2016,” said resident Melissa Kovacs, who served on the rental working group. 

By wayne schutsky

Progress Managing Editor

 

F

ollowing inaction by the Legislature this year, Scottsdale City Council is considering a number of new regulations and enforcement measures to combat longstanding problems involving short-term rentals.

The rental properties – often advertised through popular websites like Airbnb and VRBO – have been a source of complaints that the properties are essentially small hotels operating in residential neighborhoods and cause issues with noise, trash, parking, partying, lewd behavior and drinking and drug use.

A 2016 state law prohibits municipalities from banning or regulating short-term rentals specifically. 

In 2019, Council took some actions to curb partying and illicit activities at the properties with ordinances that levy heavy fines on property owners and renters if they host “nuisance” parties or unlawful gatherings. Violators can face fines and fees of up to $4,000 for repeated violations. 

The new ordinances complied with the 2016 law by applying to all residential properties, not just rentals. 

Even with those ordinances in place, however, complaints have persisted.

Records obtained by the Progress showed police issued 143 notices of violation of either the nuisance party or unlawful gathering ordinance between Oct. 24, 2019 and Feb. 1, 2021, resulting in fees of $62,750.

The city recorded 17 violations in November and December 2019 in the months after the ordinances went into effect and 16 violations during the same time frame in 2020.

The city can also fine property owners who fail to register a short-term rental, fail to have a transaction privilege license tax number or operate the rental for non-residential use like an event center.

Of 316 cases involving violations, “all of them have come into compliance without the need to issue a civil citation,” former Neighborhood Planning Services Director Raun Keagy told the Progress earlier this year.

Still, there is evidence only a fraction of active short-term rentals in Scottsdale are registered with the city.

Councilwoman Linda Milhaven, who served on the city’s short-term rental working group, said there are as many as 5,000 short term rentals in Scottsdale today.

In February, Mayor David Ortega said there was only an estimated 600 rentals registered with the city.

Lawmakers this year introduced three different bills addressing short-term rental issues, including one sponsored by Rep. John Kavanagh, R-Fountain Hills, that would have returned some regulatory powers to cities that were stripped away in 2016.

None of the bills passed.

So in March, Council formed a short-term rental working group tasked with creating recommendations for what could be done to prevent or minimize the adverse impact of short-term rentals. 

The group included Milhaven and Councilwoman Betty Janik. residents, hotel industry representatives and two Realtors, including one who operates a short-term rental property.

The group, which met six times this year, came back with an extensive list of recommendations on July 1 that Council unanimously accepted.

A central goal of the recommendations –  a mix of ordinance tweaks, increased enforcement and additional education for residents, property owners and renters – is to mitigate the negative impacts of short-term rentals without violating state law.

“I want to emphasize everybody thinks we can answer all the problems,” Janik said. “In reality, there are laws and ordinances that govern how we have to respond legally to all these situations.”

To do that, the group recommended several changes to improve enforcement of the existing party and unlawful gathering ordinances.

That includes improving communication between Scottsdale police and code enforcement, the two city departments charged with enforcing the ordinances, in order to identify repeat offenders.

“What we learned is if there is a problem property an officer may respond to a call for service and not understand that there’s a pattern here…and so having these folks work more directly will help us identify problems more promptly and quickly and address them more effectively,” Milhaven said.

Milhaven said the city has already implemented some changes, including giving police access to code enforcement’s complaint tracking system. 

Council also created a short-term rental response team of six police officers, one sergeant and code inspector. The new unit is still in development and staff will likely have to come back to council for funding.

The working group also recommended ways to increase compliance with the requirement that all short-term rental operators register properties with the city and provide contact info for use in the event an emergency or complaint. 

Milhaven said major booking sites Airbnb and VRBO – which represent up to 70 percent of STR bookings in Scottsdale, according to city staff – have agreed to cooperate with the city and have already notified operators about the registration requirements.

Both websites also agreed to remove repeat offenders if the city shares complaints with them, she said.

She said the city is also considering contracting with a software vendor to better track properties operating across all booking platforms in Scottsdale.

Milhaven said city staff is also going through registered properties to ensure they have a registered tax license so the city and state can collect taxes owed by those owners.

The city is also looking at increasing upping fines for violations of the nuisance and unlawful gathering ordinances to the maximums allowed under state law.

Those maximums range from $750 to $2,500 for property owners and $250 to $2,000 for occupants based on the number of previous violations.

Additionally, Council signaled a desire to recategorize violations of the ordinances to civil penalties that will be adjudicated through City Court in order to beef up the city’s ability to collect the fines.

Currently, violators are assessed a police service fee.

“So right now if someone gets a notice of violation it’s sort of like getting a bill from the city and we really don’t have a way to collect that efficiently,” Milhaven said.

All the changes to the city code will have to come back to Council at a later date for approval.

The city will also likely adopt changes requiring a one-hour response time by property owners to complaints with additional fines for delays.

Beyond those code changes, the working group recommended the city improve education for residents, property owners and renters to increase compliance.

That includes improving the city webpage for reporting complaints and creating guides and workshops for concerned residents.

And the city won’t stop fighting to reverse the 2016 law that many critics blame for the short-term rental law.

The final recommendation from the working group centered on continuing the lobbying effort at the legislature in an attempt to reverse the 2016 law and return regulatory power over short-term rentals back to cities.

“We really feel that these recommendations represent what Scottsdale can do now, and how to best help the citizens be more comfortable and more informed given this sort of horrible policy  we’re living due to the state stripping cities of their powers to regulate short-term rentals in 2016,” said resident Melissa Kovacs, who served on the rental working group.