Linda Milhaven Solange Whitehead

Scottsdale Councilwomen Linda Milhaven, center, and Solange Whitehead identify their top priorities for the next two years during a City Council meeting on June 1.

Scottsdale City Council signaled its desire to tackle a number of long-standing community issues when it identified its top priorities for the next two years.

The Council met June 1 to narrow down its list of top objectives and unsurprisingly, short-term rentals shot to the top of the list.

Of the dozens of issues considered, addressing the short-term rental problem was the only unanimous selection.

Many residents have complained about short-term rentals like those listed on sites like Airbnb and VRBO for years, arguing they situate commercial hotel-style properties in the middle of residential neighbors and can contribute to problems with noise, partying, trash and drug use.

While it is difficult to account for every short- term rental in the city, it is estimated there are approximately 4,000 properties in Scottsdale.

The issue has been a hot topic since 2016, when the state passed a law prohibiting cities from banning short-term rentals or regulating them.

Multiple attempts to modify that law failed at the Legislature this year. In lieu of action by the state, the city has already taken some steps to address the problem without violating state law.

In 2019, Council passed two ordinances by levying heavy fines on property owners and renters who host nuisance parties or unlawful gatherings.

The ordinances apply to all residential properties in Scottsdale in order to comply with the 2016 state law but were widely seen as a reaction to complaints about short-term rentals. Violators can face police service fees of up to $4,000 for repeated violations.

But those penalties have not curbed the problem.

Records obtained by the Progress show police have issued 143 notices of violation 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.

More recently, the city convened a short-term rental working group led by Councilwoman Linda Milhaven that is bringing together residents and city staff in an attempt to find other solutions.

The group has met four times so far.

The city Business Services Department also assigned two staffers to review short-term rental registrations here.

Scottsdale Business Services Director Whitney Pitt said those efforts have already identified over 1,000 properties that do not have contact information on file with the city or are not licensed with the Arizona Department of Revenue as required by law.

Pitts said the city is contacting those property owners. Property owners that do not register may be reported by the city to the state Revenue Department.


Downtown Scottsdale issues

Multiple issues connected to the future of downtown Scottsdale were also identified by a majority of Council.

Specifically, a majority wants to revise and adopt a new Old Town Character Area Plan to more clearly identify zoning and reduce bonuses that allow for things like increased heights and densities in exchange for public benefits like parking or public art.

Council last adopted a new plan in 2018 and that document has since become a sore point for residents opposed to increased heights and density in downtown Scottsdale.

That plan and associated zoning changes, approved on a 7-0 vote in July 2018, increased maximum building heights in parts of downtown from 90 feet to 120 feet and expanded the areas where buildings as tall as 150 feet could be built.

Critics mobilized in recent years to nix the proposed Southbridge Two development via voter referendum and oppose other projects that seek to bring taller buildings to downtown Scottsdale.

Some of those critics – including Mayor David Ortega and Councilmembers Betty Janik and Tom Durham – were elected last November.

Shortly after taking office in January, Ortega requested Council revisit the downtown plan. On May 4, the Council voted 5-2 to approve his request.

In addition to revisiting heights downtown, some Council members also want to seriously consider a pilot program to temporarily turn some Old Town streets into walk-only zones one weekend per month.

The concept would fall in line with the goals of the existing Old Town Character Area Plan but would also mark a stark departure from the status quo.

“Revitalize the downtown portion of Scottsdale Road into a paseo/boulevard that facilitates circulation and access for all modes of travel, with a special emphasis on meeting pedestrian needs,” the plan states.

In 2018, the Progress explored the concept of shutting down some streets downtown to create a more walkable environment.

At the time, city officials said the idea of shutting down any street permanently to vehicular traffic was a non-starter.

“Those ideas exist, but we are not going to explore them,” then-Transportation Director Paul Basha said. “We are a very car-centric city and we have a very car-centric Old Town.”

 “All the streets will continue to have cars and they will continue to be two-way streets,” he added. “All the lanes that are there now will continue to be there. Scottsdale Road will have two lanes per direction.”


Ethics code revision

The city’s ethics code – another hot topic in 2020 – was also identified as Council priority moving forward.

Specifically, members would like to update and strengthen the ethics code for staff, elected and appointed officials and city vendors.

That code, first adopted in 2006, has rarely been invoked but made headlines last year following the prolonged ethics investigation into then-Councilman Guy Phillips.

The initial complaint, filed by resident Mike Norton in early 2020, alleged that a GoFundMe set up by a resident to benefit Phillips following a work accident and that payments made to Phillips’ wife to collect signatures for the Southbridge Two referendum were prohibited gifts under the city’s code and violated conflict of interest rules.

In accordance with city code, the City Attorney reviewed the complaint before forwarding it to a retired judge who serves as the city’s independent ethics officer. That judge then found cause to refer the case to an ethics panel made up of retired judges for further review.

It was the first time since the city adopted its ethics code over a decade ago that a complaint made it to a panel.

The panel cleared Phillips and his wife.

 But the panel also recommended the city revise its code to prevent bad actors from using GoFundMe or similar online anonymous fundraisers to buy votes in the future.

“The ambiguities in the governing Code sections could allow unscrupulous elected officials and their benefactors to disguise quid pro quo vote buying as personal gifts not made in the course of performing official duties,” it said. 

Council initially requested City Attorney Sherry Scott draft changes to the code to close the loophole, but ultimately rejected her proposal and voted 5-2 in June 2020 to keep the existing code.

Of the five Councilmembers who voted against changing the ethics code, only two – Councilwomen Kathy Littlefield and Solange Whitehead – are still on Council.

Milhaven supported most of the changes proposed by Scott.