Thelife- There are about 5,000 short-term rentals in Scottsdale, Arizona, a local CBS affiliate reported.
- Rental owners face a new regulation as they prepare for a flood of Super Bowl and PGA Tour fans.
The desert destination Scottsdale, Arizona, 30 minutes from downtown Phoenix, is putting its foot down on the thousands of short-term rentals dominating the local real-estate market.
Starting this month, the city is requiring Airbnb and Vrbo hosts to apply for an operating license and pay a $250 annual fee.
The regulation is a warning to the industry that has flourished under a 2016 Arizona law that banned local caps on short-term rentals. A 2022 state law allowing cities to require licenses made the move possible for Scottsdale, which had been hamstrung in its efforts to expand oversight of the market.
"It's the only thing we can do right now," Solange Whitehead, a Scottsdale councilwoman, told Insider.
The regulation is about to be tested in a big way.
Scottsdale will be flooded with visitors next month, when both the Super Bowl and the PGA Tour's Waste Management Phoenix Open will take place locally over the course of a single week. Over 500,000 people visited Scottsdale in 2015, the last time Arizona hosted the Super Bowl, according to Arizona PBS.
Airbnbs touting their proximity to the major sporting events can go for $850 a night.
Scottsdale is joining the dozens of cities across America attempting to control their number of short-term rentals, which reached a record high in US supply last year. The popular vacation town of Sedona, a two-hour drive north of Scottsdale, offered hosts $10,000 to delist and sign yearlong leases with locals instead, but only three have applied.
Short-term-rental hosts have shown a similar lack of enthusiasm for Scottsdale's new program.
Only one-third of the estimated 5,000 hosts in the city have applied for the requisite license, according to a local CBS affiliate. Effective this month, hosts found operating without a license face a $1,000 fine for their first infraction.
In resisting regulations, the hosts are upsetting locals who complain that short-term rentals have a detrimental effect on the city by reducing available housing for residents and the sense of community.
"There are relatively few areas where there are majority homeowners or residents left," Susan Edwards, a local resident, told Phoenix's CBS affiliate.
"It's destroying neighborhoods in Scottsdale," Edwards added.
The expansion of vacation pads has been a 'slow-cooked lobster'
Indeed, the explosion of short-term rentals in Scottsdale is "out of control," Whitehead, the councilwoman, said. She likened the simmering tensions over the issue to a "slow-cooked lobster."
"We have people in cul-de-sacs that no longer have neighbors," Whitehead said.
When one Scottsdale local confronted a neighboring short-term host over "horrible parties and lewd behaviors," the host responded that maybe it was time for the neighbor to move out, she said.
The $250 annual fee for hosts is a nominal amount and designed to fund basic visibility for the city on how many vacation rentals are operating, Whitehead said. The city has to rely on a third-party site for the same function, she added.
The councilwoman has no intention of trying to ban short-term stays, she said. But she said there could be greater control over the properties in the face of recent safety incidents and the rising cost of housing. The median home in Scottsdale is valued at $800,000, nearly double the 2017 median, according to Zillow.
"There is a place for it. We just need regulations that protect everybody," she told Insider.