By Christina Sandefur
May 8, 2018

Last month, I wrote about an important investigation by the Arizona Attorney General’s Office into the city of Sedona’s violation of an important state property rights protection. This week, the AG released a formal opinion that the city is unlawfully discriminating against short-term rentals by requiring homeowners to apply for a business license before they can offer their homes as short-term rentals, even though homeowners who offer their homes as long-term rentals don’t have to ask for government permission.

Arizona’s Home-Sharing Act, passed in 2016 and based on Goldwater Institute model legislation, prevents cities from imposing extreme and arbitrary rules against “home-sharing”—allowing overnight guests to rent one’s home for a short period of time. Instead, the law requires cities to treat home-sharing the same as all other residential occupancies, without regard to the duration of the rental. The Act ensures that cities stay focused on their most vital jobs—protecting quiet, clean, and safe neighborhoods—without needlessly and arbitrarily discriminating against homeowners who offer their homes as short-term rentals.

The AG opinion on Sedona’s discriminatory rule came about after Representative Darin Mitchell made a request for an investigation under SB 1487, a provision that allows the state to withhold shared monies from municipalities that violate state law. By the time Rep. Mitchell’s request reached the AG, the Goldwater Institute had already sent two letters to Sedona officials, warning them that under Arizona’s Home-Sharing Act, cities can’t impose rules on short-term rentals that are not also imposed on long-term rentals. But the city refused to back down.

Now, the city has 30 days to fix the violation or the state can start withholding funds.

When people have raucous parties, trespass on others’ property, or clog up the streets with parked cars, they should be held accountable, regardless of whether they’re overnight guests, renting the home for months, or full-time residents. But it makes no sense to draw arbitrary lines based on those durations, imposing unfair and discriminatory regulations on an entire class of homeowners, especially if they’re not causing any disruptions.

The AG opinion is great news for Sedona homeowners, who, after fighting hard to protect their property rights at the legislature, will finally be treated fairly. And it serves as a reminder to cities throughout the Grand Canyon State to focus on keeping communities safe rather than punishing responsible homeowners for sharing their homes with overnight guests.

Christina Sandefur is the executive vice president at the Goldwater Institute.

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