District 4 Phoenix resident Jillian Iovino has operated a short-term rentals out of a single-family home next to her home, which she bought from a neighbor. She has rented out two of the four apartments on the property on Airbnb for two years and has used the remaining ones to house friends and family.
Since she only owned one rental property, Iovino was not concerned about the regulation of her short-term rental or STR under Ordinance G-175, which defines the requirements and restrictions for STRs.
“I was kind of like, oh, ours is a little bit more true to like the original design of Airbnb than where it has kind of gone,” Iovino said. “So I thought oh it’s probably not going to impact me as much as maybe some people who have like 50 properties.”
Short-term rentals are one-to-four-people houses used for lodging lasting no more than 30 days. The STR ordinance was passed unanimously by all nine Phoenix City Council members on Wednesday during the council’s formal meeting at 200 W. Jefferson St.
The ordinance will be enacted on Nov. 6, 2023. Iovino and the other 3,900 registered STR owners have until Jan. 15, 2024, to adjust to new regulations before they are enforced.
The regulation of short-term rentals in Phoenix began in 2022 when Senate Bill 1168 was passed requiring each city in Arizona to create a permit system for STRs after complaints about unregistered rentals were raised.
Ordinance G-7156 is Phoenix’s response to SB 1168. The proposal defines where a STR can be operated, the required rental permit and the consequences for permit violations.
The permit, which lasts a year, can be acquired by filling out an application, including a fee of up to $250, with the rental’s information and sending it to the Planning and Development Department where the current director, Josh Bednarek, will respond to it within seven days.
An applicant must prove that the rental property is insured for $500,000 before the permit can be approved. The applicant must also send a letter of intent to all neighborhood residents, homeowners associations or other neighborhood associations to make them aware of the short-term rental.
The ordinance states vacation rental websites like Airbnb are required to verify that Phoenix renters are following permit guidelines.
Unverified listings are a concern for many Phoenix residents including Councilmember Debra Stark (Dist. 3) who added the verified listing amendment to the ordinance before it passed.
“They actually are doing this [verified listings] in other states and other cities like Chicago, Boston, Denver,” Councilmember Stark said. “So I think it is nothing new to the platforms.”
Neighborhood alliances are also concerned about the increase in STRs and their effect on the affordable housing available for residents. Co-founder of the Arizona Neighborhood Alliance Kate Bauer said the proliferation of STRs is causing rental prices to spike out-of-control.
“I don’t really have much of an issue with them, except for the fact that I see them as a real problem,” Bauer said. “I see a direct line between them and homelessness. I think they’re a real burden to housing availability and affordability.”
Susan Edwards, Chair of Neighborhoods Connect and the President of Arizona Neighborhood Alliance shared a personal connection to Bauer’s worries with the Sudanese students she mentors and houses.
“This is a huge story,” Edwards said. “I’ve got two college students living in my house because there is no way to live and it’s only getting worse.”
Complaints received by Phoenix Police or the Neighborhood Services Department are directed to the Planning and Development Department.
A rental owner can violate the permit by having a felony offense occur at the rental location, housing a sex offender, completing or attempting a felony act, or holding a special event at the rental.
The violation fees can range from $500 to $3,500, depending on the number of existing violations. If an owner obtains three violations within 12 months their permit can be suspended.
The Planning and Development Department clarified at the city council meeting that it is difficult to get a suspension because of the four- to six-month hearing process required for each violation.
Iovino considered her property, as of September 2023, to be a casita, which falls under the category of accessory dwelling units or units located on the same property as a single-family dwelling unit and is prohibited from use as a STR.
Since Iovino’s property is listed as a casita, there is a chance she may need to shift around her lifestyle. However, Iovino is sure that she will not be affected by the new ordinance.
“We’ll have to change things up a bit,” Iovino said. “But my property I’m not too concerned because I think it probably can qualify. I don’t know, I have not read the ordinance yet, but from what I’ve heard I think we’ll probably be okay.”