Originally Published: October 12, 2016 6 a.m.
PRESCOTT – While the City of Prescott has no option other than to allow vacation rentals in its neighborhoods, it does have a choice on whether to impose regulations on those homes.
That was the message City Attorney Jon Paladini gave to the Prescott City Council this week during a study-session presentation on a draft ordinance.
City officials have pointed out that while the current Prescott code prohibits short-term rentals in residential zones, a new Arizona state law will prevent cities and towns from imposing such bans, effective Jan. 1, 2017.
No vote occurred at the Tuesday, Oct. 11 meeting, but a majority of council members appeared to lean toward stricter regulation of the dozens of vacation rentals that reportedly are already operating in Prescott (through online sites such as Airbnb, VRBO, and Homeaway).
If adopted, the changes would require the owner/operator of a vacation rental to obtain an annual registration certificate from the city, in addition to obtaining a business license and a sales tax (transaction privilege tax) license.
In order to obtain the certificate, the owner would have to provide the rental address, a 24-hour telephone number of a local contact, and the number of bedrooms in the property.
Paladini noted that the purpose of the ordinance would be to manage the “disruptive nature” of the vacation rentals in the neighborhoods. He added: “We tried to find that balance between no regulation, and something that probably wouldn’t pass state muster.”
The draft ordinance will go back to the council at a coming voting session, Mayor Harry Oberg said after the meeting, adding that the consensus of the council appeared to be in support of the regulations.
Despite the city’s existing ban, enforcement has been on a complaint-driven basis, and Planning Manager George Worley previously noted that the city has received relatively few complaints.
According to a preliminary analysis by an outside vendor, as many as 165 of the short-term rentals are currently operating in the city.
Discussion arose this week about the state’s decision to allow the vacation rentals virtually anywhere in the city.
Councilman Steve Blair, for instance, called the existence of short-term rentals in residential neighborhoods a “slap in the face” of permanent residents who have invested their life savings in their homes.
And local resident Ralph Hess questioned the “statewide interest” in requiring communities to allow the rentals in neighborhoods. He asked the council what the city is doing to “stem these pre-emptive actions by the state.”
Deputy City Manager Alison Zelms responded that through efforts at the legislature, cities and towns were able to get changes in the vacation-rental legislation. In addition, she said, the city works every year to try to maintain its local control.
Still, Zelms said Gov. Doug Ducey indicated in his January 2016 state-of-the-state address that one his key focuses would be allowing for various sharing-economy ventures. One of the results of that was the vacation rental legislation, she said.
While the council members voiced few specific objections to the ordinance, questions arose about how the city would enforce the new rules – especially in light of other restrictions, such as the sober-living home ordinance and the new business license, which also are going into effect Jan. 1.
Several council members mentioned that the city has just one code-enforcement officer, who already is swamped with existing duties.
Along with the new city regulations, the vacation rentals would be subject to other city and state regulations as well, such as the property maintenance code, disruptive property ordinance, and noise and nuisance laws.
Councilman Steve Sischka suggested that the proposed ordinance would have the effect of discouraging some owners from renting short-term. “A lot of this is going to self-limiting,” he said. “There are going to be a lot of people who don’t want to jump through these hoops. A lot of people are going to say, ‘I’ll pass.’”