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4:10 PM Tue, Sept. 25th

Vacation rental issue not unique to Prescott area

PRESCOTT - A quick look at online sites such as Airbnb, VRBO and Homeaway confirms that Prescott has a strong presence in the short-term vacation rental industry.

A search on VRBO turns up 117 Prescott-area rentals, while Airbnb has 56, and Homeaway has 114.

Also apparent by searching the websites is that Prescott's offerings are miniscule in the whole scheme of things.

VRBO's website boasts over one million listings, while Airbnb advertises that more than a half-million people stayed in its listings on New Year's Eve 2014.

The Neighbors for Overnight Oversight Coalition's website (www.overnightoversight.com), with which the American Hotel & Lodging Association is involved, estimates that 12 million people booked a home or a room through a short-term online rental company in 2014.

In recent months, local governments have been grappling with how to regulate the growing number of vacation rentals.

In the City of Prescott, the current code does not allow short-term vacation rentals in residential areas, and officials have acknowledged that many of the existing rentals in the city are operating in violation of the code.

The city has largely allowed the rentals to continue operating, other than tracking down the known ones to require that they charge sales tax and bed tax.

In November 2014, the city's Unified Development Code Committee (UDC) discussed the issue, and asked city staffers to look into options for dealing with the issue.

Soon after that meeting, however, the city received a housing-discrimination complaint from the U.S. Housing and Urban Development on its 2013 ordinance on group homes - a matter that Prescott Planning Manager George Worley said has occupied much of the time of the Community Development Department.

Staff has yet to deal with the vacation-rental issue, Worley said this week, and he was uncertain when the matter would go back to the city's UDC.

Meanwhile, communities all over the country have been dealing with similar issues.

In Portland, Oregon, for instance, an ordinance went into effect in July 2014 making short-term rentals legal in single-family homes with a city permit, according to an article in the Portland Tribune. It added that by December 2014, few homeowners had bothered to get the permits.

Boulder, Colorado, on the other hand, mostly does not allow short-term rentals in residential areas, and recently sent out more than a dozen cease-and-desist letters to property owners who were renting out spaces in violation of the city codes, according to a news story on the ABC 7 News Denver's website.

The matter causes concerns for the lodging industry, which has been closely watching the short-term rental industry.

Margo Christensen, who serves as the vice president of marketing and public relations for Ponderosa Hotels (Residence Inn and Springhill Suites in Prescott) and also sits on the board of the Arizona Lodging and Tourism Association, says the issue has long been on the industry's national and state radar.

The "crux of the issue" for the lodging industry, Christensen said, is that the vacation rentals should have to follow the same safety and handicap-accessibility regulations that hotels and motels must follow.

"We are not at all opposed; we just want them to play by the same rules," Christensen said. "I think competition is good, but we all need to comply with the same requirements.

She mentioned features such as fire-sprinkler systems, handicap-accessible bathrooms, effective door locks, and elevators.

Christensen said the state and national lodging associations are working toward some type of legislation that would deal with the issue.

Other hotel owners in the area express less concern about the vacation rentals.

"I just feel like the more things we have going on here, the better it is for all of us - as long as they keep the safety of people in mind," said Nancy Hinson, owner of the Grand Highland Hotel on Whiskey Row.

Hotel St. Michael owner Lex Krieger - while noting that he has not been following the vacation rental issue closely - said he sees the short-term rentals as "very different" from hotels.

Prescott Tourism Director Don Prince pointed out that the growth in vacation rentals is part of the trend toward a "shared economy," which also includes ride-sharing services such as Uber and Lyft.

From the standpoint of tourism, Prince said, "the additional inventory is probably good." Even so, he allowed that non-compliance with safety regulations and tax requirements gives the private rentals "another unfair advantage."

Prince was uncertain of the effect vacation rentals are having on the city's bed tax, which hotel and motel customers must pay.

In December, city officials estimated that about 80 vacation homes in Prescott have sales tax licenses, and pay the city's 2 percent sales tax and 3 percent bed tax on their rentals.

The city's bed tax records for the past several years show that Prescott's hotel/motel revenues have been growing - up by 10.66 percent in 2013, and up 8.24 percent in 2014.

Follow Cindy Barks on Twitter @Cindy_Barks