Title
Public Hearing - Amend Phoenix City Code - Ordinance Adoption - Chapter 10, Article XVI - Short-Term Vacation Rental (Ordinance G-7156)
Description
Request to hold a public hearing on a proposed amendment to the City Code sections 10-193 through 10-197 and adding sections 10-198 through 206 to Chapter 10, Article XVI related to Short-Term Vacation Rentals to incorporate Arizona Revised Statute (A.R.S.) 9-500.39 requirements for obtaining a Short-Term Rental (STR) Permit.
Report
Summary
In 2016, the Arizona Legislature removed the ability of local jurisdictions to regulate short-term rental units and required that the use be treated the same as any long-term residential use of a property. Due to significant negative impacts based upon the experience of residents living around these short-term rental uses, the Arizona Legislature enacted A.R.S. 9-500.39 authorizing municipalities to create provisions for registrations of short-term vacation rentals. The City of Phoenix adopted Short-Term Vacation Rental Ordinance (G-6653) to implement the requirement for STR owners, or designees, to register each STR rental property with the City of Phoenix, so that responsible party contact information was available if there were problems resulting from a particular short-term rental unit.
In 2022, the Arizona Legislature approved Senate Bill 1168 (SB1168) amending A.R.S. 9-500.39, which authorized cities and towns to create a very limited permit/license process to help gather better data regarding short-term rentals with minimal modifications to the ability to regulate these types of uses. The proposed amendment establishes a STR permit application process and owners/designees are required to comply with the new application process. Under the new enhanced penalty structure, any owner who operates a STR without a permit is subject to a civil sanction of up to $1,000 per month. As part of SB1168, STR owners/designees must also meet specific operating requirements outlined in the proposed ordinance (Attachment A) prior to the issuance of a permit/license as a condition for operating a short-term rental property. SB1168 limits the permit fees that can be charged to cover staff administrative costs to review permits, administer the program and for enforcement. It also requires that the City approve or deny a permit (based on state established criteria) within seven (7) days or the permit is deemed approved.
Summary of Short-term Rental Requirements
Owner/Designees of short-term rentals must meet to the following requirements:
- Apply for a STR permit/license.
- Meet all permit/license operating requirements.
- Register for a Transaction Privilege License and register with Maricopa County Assessor's Office for taxing purposes.
- Provide the name, address, telephone number and email address of the owner, emergency contact and designee (if applicable).
- Provide notice to neighbors of intent to operate a STR.
- Maintain $500,000 liability insurance.
- Conduct background checks on renters.
- Owner's/Operator's may appeal a denial, non-renewal or suspension of a permit/license.
City is subject to the following:
- Permit/license must be approved or denied within seven days.
- Charge a permit/license fee and renewal fee up to $250.
- Impose civil penalties.
- May suspend a permit/license if an owner is found guilty of three minor violations or one significant violation within one year related to the operation of the STR.
Staff recommends approval of the proposed amendment to the City Code sections 10-193 through 10-197 and adding sections 10-198 through 206 to Chapter 10, Article XVI related to Short-Term Vacation Rentals to incorporate Arizona Revised Statute (A.R.S.) 9-500.39 requirements for obtaining a STR Permit.
Concurrence/Previous Council Action
The Transportation, Infrastructure and Planning Subcommittee heard this item on June 21, 2023, and recommended approval by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Alan Stephenson and the Planning and Development Department.