PHOENIX — State lawmakers are moving to curb some abuses created when they agreed three years ago to let people rent out their homes to overnight guests.
House Bill 2672 would prohibit homeowners from allowing properties to be used for special events. Rep. John Kavanagh, R-Fountain Hills, said that will put an end to “party houses” where a home in a residential neighborhood suddenly becomes the site for dozens and dozens of guests.
But lawmakers balked at putting an actual limit on the number of people who can stay in a home.
More significant, the legislation still allows what Rep. Isela Blanc, D-Tempe, calls “money-grubbing capital investors” to buy up multiple homes and condos in a neighborhood solely to make them available on platforms like Airbnb.
Blanc said this practice not only alters the character of neighborhoods but dries up the supply of affordable housing for people who live in the community.
Kavanagh said he agrees with Blanc’s concern. But he feared putting in a provision to bar such sales would incur the wrath of investors and those who work with them, condemning the entire proposal to failure.
Rep. Jay Lawrence, R-Scottsdale, also a foe of what he said are abuses of vacation rentals for party houses, put a finer point on the politics.
“Let me point out that real estate agents are a very powerful entity within this body,” he said.
The industry has an ally in Gov. Doug Ducey, who signed the 2016 legislation in the first place.
That law overruled any existing or future city ordinances that limit short-term rentals, leaving cities with the power to regulate only things like noise and parking rules.
In a ceremonial bill signing that year engineered by Airbnb, Ducey touted the change as good for visitors seeking alternatives to hotels and resorts, and for homeowners who can make some money.
But even in 2016, Kavanagh was complaining that the law covers more than those renting out a bedroom or their home. There is no limit on the number of properties an investor could buy and days a home could be rented out to successive guests — all in the same residential area — potentially turning an area into a vacation rental zone.
Asked at the time whether that could change the character of neighborhoods, Ducey responded, “I’m not going to answer these hypotheticals.”
As to what Ducey thinks now, an aide said the governor does not comment on pending legislation.
But Kavanagh said these questions are no longer hypotheticals.
As originally written, his HB 2672 would have limited rentals to no more than two people per bedroom, plus an additional two. So for a four-bedroom home, the maximum guests would be 10.
Owners of bigger homes, objected, he said, who insisted there was space for more people to bed down.
Also gone is language that would have allowed local governments to limit the number of guests — people other than the renters — who could be on the property after 10 p.m.
The biggest element that survived prohibits vacation rentals from being used for non-residential purposes, like special events, retail operations, restaurants or banquet space. Kavanagh said that should eliminate the parties that create many of the neighbors’ complaints.