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County hears pros, cons of vacation rentals: Review will continue on case-by-case basis

COTTONWOOD - Yavapai County officials agreed Wednesday, March 25, to continue to review controversial short-term vacation rental use permits on a case-by-case basis, after listening to citizens split on the issue.

The Yavapai County Board of Supervisors and its planning commission met in Cottonwood to discuss several issues. The short-term rental issue was one of the two that generated the most discussion and audience comments.

While Coconino County is working on an ordinance to govern short-term rentals, Yavapai County Supervisor Chip Davis pointed out that Arizona's Private Property Rights Protection Act could then come into play. Once a local government has an ordinance, it can't tighten property use restrictions without paying property owners for taking their rights.

Approximately 1,000 homeowners are illegally renting out their homes to visitors throughout Yavapai County, Yavapai County Land Use and Planning Division Manager Dave Williams estimated. The worst problems in unincorporated areas are located in rural Prescott and the Village of Oak Creek, he said.

"I've really struggled with this the past year," Williams said. "It's a neighborhood quality issue."

In unincorporated areas of this county, everyone needs use permits that often involve public hearings. People who rent their primary homes for at least 30 days at a time don't need county use permits.

The short-term vacation home rental business is booming because of Internet sites such as airbnb and FlipKey. Some property owners are making five figures annually, Williams said.

County Development Services staff members have sent cease-and-desist notices to about 40 property owners in just the past two months, Williams said. Some stopped when they got county letters and said they didn't know they were acting illegally, he said.

The county has issued 14 notices of violation to people who wouldn't stop, and five were found guilty by county hearing officers after continuing to refuse to stop renting their homes, Williams said.

"I know the vast majority of them know exactly what they are doing," said Tom Graham, who is involved in the lodging business in the Village of Oak Creek. "It's an epidemic."

The illegal short-term vacation rental homes are unfair to the legal lodging industry as well as neighbors, Graham said. Some homeowners with vacation rentals have insisted they are exempt from sales taxes, and others admitted collecting sales taxes and keeping them, he said.

They don't pay commercial property taxes either, he noted. They are supposed to report their use to the Yavapai County Assessor's Office, county staff said.

Five people in the audience spoke in favor of home vacation rentals, including three people involved in the practice. Three spoke against.

"We've prevented a lot of foreclosures," said Susannah Rehm of Foothills Property Management that operates in Sedona and the Verde Valley. People have been able to offset the cost of their dream homes until they can afford to move in, Rehm said.

Long-term rental tenants can cause problems too, said Daniel Nevarez, who also works at Foothills. He estimated he's heard only one complaint about short-term rentals after being involved in thousands of rentals over the past seven years.

Jerome resident Suzy Mound said short-term renters in her neighborhood are disruptive, with parties and too many cars.

"Every case is so different," said Suzy Heath, who was offering short-term rentals of two homes through FlipKey until she got a letter from the county. She said she'd be glad to register with the county and pay taxes. Nevarez said his clients would like that option, too.

They both urged county officials to continue to review short-term rentals on a case-by-case basis.

The supervisors recently granted one use permit for short-term rentals next to Prescott. The planning commission has recommended denial of another in the Mountain Club next to Prescott.

Follow Joanna Dodder on Twitter @joannadodder

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