Rep. Aaron Lieberman

Rep. Aaron Lieberman details why he believes the state should repeal outright a law that took control of vacation rentals away from cities and towns. With him is Raquel Mamani who detailed problems that short-term rentals are having in her neighborhood.

Calling the law a mistake, two House Democrats are leading the charge to repeal a 2016 measure that stripped cities and towns of their ability to regulate short-term and vacation rentals.

But a key Republican lawmaker, no fan of that 2016 law, said outright repeal is not politically realistic.

Rep. Aaron Lieberman, D-Paradise Valley, acknowledged Friday that the original measure passed with bipartisan support. The legislation was promoted to lawmakers as a way for people to get a little extra money by renting out a spare bedroom for special events.

But the reality, he said, has been quite different, with investors buying up homes solely to rent them out for weekends, creating de facto hotels.

“We bought in a residential neighborhood because we want to live with our neighbors, not with commercial enterprises that are showing up, literally neighborhood hotels that are showing up block after block,’’ Lieberman said.

Rep. Isela Blanc, D-Tempe, said there has been other fallout: a lack of affordable housing for people who actually live in those communities.

In August, the Scottsdale Progress reported that an investor had purchased an apartment complex in the Holiday Park neighborhood with plans to turn it into a fulltime Airbnb property. Holiday Park is historically affordable neighborhood south of downtown Scottsdale.

In Sedona, Blanc said, half the housing that is unoccupied is short-term rentals.

“Even larger communities such as Flagstaff are struggling with housing shortages being created by the short-term rental crisis here in our state,’’ Blanc said. The solution, she said, is to repeal the 2016 law.

“I don’t think that’s a big ask,’’ Blanc said.

“It’s not realistic,’’ said Rep. John Kavanagh, R-Fountain Hills.

Kavanagh, who represents much of Scottsdale, is no fan of the vacation rentals. In fact, he was the only state senator to vote against the proposal.

“I wouldn’t mind seeing it repealed,’’ he said. “But there’s not a snowball’s chance in hell of a repeal avoiding a veto.’’

That is based on comments made by Gov. Doug Ducey earlier this year when he signed Kavanagh-sponsored legislation to return some control of these rentals to local governments.

That law spells out that homes cannot be used for parties, restaurants, sales or other non-residential purposes and requires owners to provide a point of contact for police to call if there are problems. There also are fines for violations, potentially up to half the gross monthly proceeds after multiple violations.

In September, Scottsdale amended its own city ordinance to adopt the stricter regulations allowed under the new law.

The Scottsdale City Council also approved strict new rules to discourage nuisance parties and illegal gatherings – such as those with drug use or minors consuming alcohol – that carry stiff fees and fines.

The nuisance party rules apply to all properties in Scottsdale, not just short term rentals, to avoid conflicting with the 2016 law.

Ducey earlier this year told Capitol Media Services he has no interest in further rollbacks.

“We’re proud of the open-for-business reputation that Arizona has,’’ he said. And the governor is specifically opposed to the idea of local control on this issue.

“What we didn’t want is a patchwork of different laws throughout the state,’’ he said.

“We think that’s bad policy,’’ Ducey continued. “It’s not friendly to a growing economy.’’

So Kavanagh is now co-chair of a bipartisan committee seeking to craft something that can not only get legislative approval but also the governor’s signature.

Lieberman denied that the decision of he and Blanc to introduce HB 2001 with its outright repeal is little more than political public relations. He said he believes that if the bill gets to the House floor – meaning Republican leadership actually assigns it to a committee and it gets approved there – it would be approved.

Even assuming that happens, however, that still leaves the governor’s opposition. But Blanc said the effort is worthwhile.

“Arizonans are asking, that is why,’’ she said.

“Because Flagstaff, Page, Sedona, rural Arizona is demanding that we do this,’’ Blanc continued. “It is because constituents, people are demanding it.

Anyway, she said, repealing the 2016 law is a compromise because it still allows for control of these vacation rentals. The only difference is those decisions would be made by locally elected officials.

Greg Hague, a real estate broker, said repeal makes sense even if the new law prohibiting “party houses’’ does prove effective at curbing that kind of abuse.

“Is it right that businesses should be able to open up next door to me with people coming in and out every day?’’ he said.

“Even if they’re behaving themselves, it still changes the character of the neighborhood,’’ Hague said. “That is not what residential zoning is all about.’’

And if nothing else, he said Arizona is the only state in the nation that has an outright ban on local control of such rentals.

Kavanagh said he believes there are things that could get approved by the Legislature.

One, he said, would be some sort of occupancy limit based on the number of bedrooms in a home.

Such a rule could be difficult to enforce, though.

Scottsdale already limits occupancy at short-term rentals to six adults but residents at a town hall in August said the rule is routinely flouted and rarely enforced.

Raun Keagy, Scottsdale’s planning and development area director, said it is difficult for the city to prove renters are violating the rule.

“That’s a hard one for us to prove, because we go out and knock on the door or they can tell us whatever they want to tell us,” Keagy said.

Kavanagh also said that renters should be required to use available off-street parking, with limits on outdoor activity after 9:30 at night.

Politically trickier, he said, would be to enact a limit on the number of such rentals, a move that could address the concern about investors buying up all the available housing stock.

Kavanagh said there are precedents for that.

For example, the 2010 law legalizing marijuana for medical purposes has a limit on the number of dispensaries statewide, currently about 130. And even proposals for recreational marijuana being promoted for the 2020 ballot also have caps.

He also pointed out that the number of liquor stores also is capped in state law. 

-Wayne Schutsky contributed to this report.