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New vacation-rental rules set to go into effect Jan. 1

PRESCOTT – As of Jan. 1, 2017, owners of vacation rentals in Prescott will face an annual registration cost totaling about $135, along with a number of new rules of operation.

In two consecutive 4-2 votes Tuesday, Nov. 8, the Prescott City Council approved ordinances that will make short-term rentals legal in Prescott’s residential zones, at the same time as new regulations will go into effect.

Prescott City Attorney Jon Paladini told the council that the move to make vacation rentals legal in neighborhoods was “pretty much a perfunctory decision,” because the Arizona State Legislature approved a bill earlier this year prohibiting cities from banning the rentals.

Meanwhile, he said, the city had the option of imposing restrictions on the rentals to alleviate the impacts they might have in residential areas.

The city’s previous code was in conflict with the new state law by banning short-term rentals in residential zones.

City officials have noted that the ban was enforced largely on a complaint-driven basis, and an outside vendor has estimated that as many 220 of the vacation rentals already exist in Prescott.

After the first of 2017, many of those rentals will be subject to a new city ordinance that requires an annual registration, along with limitations on the occupancy in the homes.

Still, two changes that occurred during Tuesday’s meeting will lessen the impact of the new regulations for some of the rentals.

While the draft ordinance proposed limiting occupancy to two people, plus an additional two people per bedroom, Councilwoman Jean Wilcox suggested rewording that to exempt young children from the restriction.

Wilcox maintained that families should have the option of allowing their children to sleep in the same room without reaching the occupancy maximum.

Other council members agreed, and Paladini said the ordinance would reflect the change, noting that the occupancy limit would apply only to people 13 and older.

Wilcox also said the restrictions “seem unreasonable to me for an owner-occupied” home. The majority of council members agreed that rentals in which the owners reside should be exempt.

City Manager Michael Lamar said both of the changes would be positive moves. “I think it makes this a better ordinance,” he said.

The ordinances are set to go into effect Jan. 1 – the same time as the city’s new business license program.

Paladini said the rentals would be required to get an annual vacation rental registration, which he said has been estimated at about $100. That would be in addition to the $35 annual business license fee – bringing the approximate total to $135 per year. The rentals would also be required to have a one-time health and safety inspection, Paladini said, as well as collect sales and bed tax.

Councilmen Steve Blair and Jim Lamerson voiced opposition, and ultimately voted against both ordinances.

Lamerson referred to the regulations as an “over-reach in people’s freedom and right to use their private property,” while Blair said he had an issue with the state legislature’s move to allow the vacation rentals in some neighborhoods, when subdivisions with CC&Rs (covenants, conditions, and restrictions) would not face the same requirement.

Among other things, the ordinance would require owners to: obtain a registration certificate and pay an annual fee; provide name, address, and 24-hour telephone-number information for the owner and a local contact; provide the name and telephone number information for a local contact available to all property owners within 300 feet of the rental property; and provide the number of bedrooms in the rental.

Paladini the notification process likely would be done by the outside vendor with whom the city is currently negotiating. The vendor would also track the number of rentals in the city and provide a 24-hour hotline for complaints, he said.

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