Short-term rentals will soon be required to register with the city to stay in business in Scottsdale.
Armed with a recently enacted state law, City Council is set to vote on an ordinance on Oct. 25 that would go into effect Christmas Eve requiring the name, address, phone number and email address for the owner or owner’s agent, the rental’s rental address and proof of compliance with transaction privilege tax license requirements.
The city could deny a license on very narrow grounds, such as the applicant’s failure to provide required information or providing false information. The city could also deny a license if the owner or designee is a registered sex offender or has committed a felony with a deadly weapon or one resulting in death or serious injury.
Prior to the first rental, the owner must inform adjacent single-family homeowners or units on the same building floor in a multi-family setting.
In order to suspend a license, “We have to go to court three times to find a property in violation of an ordinance that was established to protect public health and safety, such as for a nuisance party,” Scottsdale Assistant City Manager Brent Stockwell said.
The city could also levy fines if the owner does not verify renters are not sex offenders, does not display the city regulatory licensing number on advertisements or doesn’t respond to emergencies to within one hour of notification.
Suspensions are for one year but can be shortened to six months if the owner has taken “substantial and significant steps to prevent the re-occurrence of the actions that led to the suspension,” according to the proposed ordinance.
“It’s not trying to be punitive here, it’s trying to create a situation where we can have the right actions happen in our community most of the time,” Stockwell said.
There are also extreme violations that would only need one verified instance to allow for a suspension.
Those include a violation resulting in a felony by the owner, serious injury or death due to reckless conduct, allowing adult-oriented businesses or maintaining a sober living home.
“Those one-strike-and-you’re-out things are for very serious things that the owner knowingly and kind of willingly did it and was found responsible for,” Stockwell said.
The license will cost $250.
SB 1168, which paved the way for the ordinance, “says a city may set a fee not to exceed the actual cost of issuing the license or $250, whichever is less,” Stockwell said, explaining:
“Our city treasurer’s office went through an extensive process and is recommending setting the fee at $250 because it is lower than the actual anticipated cost to the city to actually issue the license.
“In estimating the cost we considered the cost of additional licensing, the licensing system we use, the centralized data base we have to create, the city incurred credit card fees, digital equipment, such as computer servers and the staffing cost to review.”
The city can still track short-term rental properties that do not register for a license through their online advertisements, Stockwell warned.
Under the proposed ordinance, properties that operate without a license can be cited and receive a $1,000 fine and an administrative penalty of $1,000 for each month they fail to apply for a license.
Based on a question from Councilman Tom Durham, Stockwell noted that every person staying in a short-term rental will have to be vetted to ensure compliance with the sex-offender ban.
Durham said that also would help ensure there aren’t more than the allowable number of people staying in the home.
Councilwoman Linda Milhaven said she saw a need for additional outreach as well as clarification of some key portions of the ordinance before it is passed.
“For example, for the sex offender (stipulation),” she explained, “it says the review should be done within 24 hours of the booking date. Is that the date they make the reservation, is that the date they get the deposit, or is the booking date the date of the stay? It could be interpreted as any of the three.”
Councilwoman Solange Whitehead said she was disappointed the ordinance does not do enough to help neighborhoods or conscientious short-term rental owners by getting rid of the “bad actors.”
But something has to be done, she said.
“Clearly, without laws and without penalties and without doing something different, we’re not going to get compliance,” Whitehead said.
She also referred to Durham’s question about requiring everybody staying in the home to be listed.
“When you rent a home, a single-family home or a condominium long-term, absolutely you require a list of every single person who will occupy that premise so I would like to definitely see that,” she said.
Councilwoman Betty Janik wanted to see casitas added to the short-term rental category but Stockwell said that cannot happen because that would effectively turn a single-family residence into a multi-family designation.
City resident David Mason applauded the ordinance.
“It protects residents and its provisions help toward managing the growth of short-term rentals already threatening the meaning and character of Scottsdale,” Mason said.
He encouraged things like penalizing the property instead of the owner so a change of ownership does not wipe out the complaints against a particular property.
He also suggested multiple legal violations discovered during a police officer’s visit to a property should be counted as individual violations instead of one.
However, SB 1168 says all violations identified in a single trip count as one violation.
Several people also expressed concern about the proposed ordinance.
Not everyone was happy with the proposed ordinance.
Peter South is the owner of itrip Vacations, which manages short-term rentals. He is also a short-term rental owner and a member of the Arizona Responsible Tourism Board.
“Some of these regulations are great but I want to point out a few that are a real undue burden on owners around town,” South said. “(One) of them is background checks. I mean this is a real difficult requirement from both a technology and a privacy rights issue.
“I’m also concerned about the violation system, we are all for getting rid of bad houses but we’re concerned that frustrated neighbors might call the police and harass the people coming to this town. That poses a real risk to this town and having harassing of local businessmen. That’s who we are, we’re local business owners.”
He also raised concerns with the requirement that there can be no more than six adults and their related, dependent children in a single home.
“People come to these houses because they want multi-family experiences, whether it’s reunions or weddings or kids’ sports. They want to be under one roof,” South said.
The proposed ordinance can be viewed by going to scottsdaleaz.gov and searching for short-term rentals. Feedback can also be left there.
