Scottsdale Super Bowl Rentals Illegal

Short-term stay rentals (less than 30 days), such as vacation rentals and Bed & Breakfast boutique hotels, are not allowed in Single-Family Residential districts. City of Scottsdale website.

Short-term stay rentals in Scottsdale have always been a wink-wink proposition. I’m aware of at least two Peaceful Valley homeowners who intend to rent their homes out on a short-term basis for the Super Bowl. If you read anything on ScottsdaleTrails, you know how much I abhor the millions of dollars in taxpayer-funded subsidies the Super Bowl Host Committee has gotten courtesy of the Scottsdale City Council. Every one of the people on that committee has more money than most of us. So I don’t blame our taxpaying neighbors for wanting to cash in, too. However, in doing so they may be committing a crime that could earn them a citation and fine from Scottsdale Code Enforcement or the police.

There are several good reasons for this ordinance. First, while I don’t care so much about you getting your house trashed (see below), the city doesn’t want said trashing to spill over onto your neighbors in the form of noise, traffic, and property damage. And the trashing of your property becomes a blight on the neighborhood until you get it fixed.

Second, this is an R-1 neighborhood. That translates into “Residential, 1 dwelling unit per lot.” A short-term stay rental is, by definition NOT a residential use. It’s a transient use, like a hotel or motel. Transient uses belong by-definition in multi-family zoning districts or commercial districts.

Third, hotels and motels pay a lot of money for the privilege of having their business licenses, and they have to undergo a lot of inspections to be certified fit for transient lodging.

Fourth, you are legally required to pay both rental tax AND a surcharge for transient tax (aka “bed tax”) if you are operating a short-term stay rental. So if you don’t collect, report, and pay that tax, you are also committing tax fraud.

Even if you don’t care about the legalities or about the impact on your neighbors, you have no practical recourse against damage from a short-term stay tenant. By the time you figure out your home has been damaged, the tenant is long-gone, most likely to another state. Good luck filing that lawsuit…if you can afford an attorney to fight over several thousand dollars’ worth of damage.

It happens every year, and this year’s first newsworthy trashing happened even before Super Bowl. Lesley McGee ostensibly rented her expensive North Scottsdale home out to a young woman who professed to be hosting a dinner party for her mother. However, McGee unwittingly made herself the victim of a “mansion party,” which left her with $7500 in repair bills and the ire of her neighbors.

You could also be subject to fines from your HOA, most of which specifically prohibit short-term stay rentals. And if you are a Realtor (like, ironically, Lesley McGee) who has given someone advice about, or participated in the rental and/or management of an illegal short-term stay rental in a single-family district, you could be subject to sanctions from your association of Realtors.

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5 Comments

  1. I am so sorry for transpired at that lady’s home.
    Not surprised, though.

    Our Council majority and Mayor, former City Manager and City Attorney would not let the Housing Board (no longer exists), Neighborhood Enhancement Commission (gone, too) or the newly organized Neighborhood Advisory Commission deal with these issues. When we put forth work plans that included dealing with these issues, they were stone cold silent.

    If you live in one of the apartments that was flipped to condos back in 2006 to 2008, and there are over 3,000 of those in this city, you have no protections from those condo owners renting out to folks overnight or for short term opportunities like we see here with both the Super Bowl and the golf tournament. Some create their own nightly events to rent a place to stay

    We have one resident who brought the issue of the condos to the attention of the city and how the renters trashed the unit and how the owner did not do the property maintenance and it is bringing the whole complex down.

    As for single family housing we have very few requirements that owners must follow if they rent their property out for a short period. Do we even have policies that require sales tax to be paid on those rentals? Hotels must pay and folks living/staying in apartments must pay.

    We tried, but we were blocked in every way for a variety of excuses. And then there was stone cold silence from the City Council.

  2. I recently had a discussion with another friend about this issue, and took a few minutes to look up the applicable city code. I post the results here just for future reference.

    It’s a tricky situation. Basically, “property uses” are “permitted” by reference in the zoning district code. If it isn’t specifically “permitted,” it is by definition “not permitted.”

    Here’s the code area that covers this. OK this is a mouthful: Scottsdale Revised Code [SRC] Appendix B, “Basic Zoning Ordinance” (Number 455), Article 5, Section 5.502, “Use Regulations” for Single-Family Residential R1-7 districts, refers to the same section for R1-43 districts (also single-family but larger lots). That is Section 5.102, which contains a list of “Permitted Uses,” which does NOT include “transient lodging,” defined elsewhere as less than 30 days.

    Here’s a link to 5.102 (if you care that much): https://www.municode.com/library/az/scottsdale/codes/code_of_ordinances?nodeId=VOLII_APXBBAZOOR_ARTVDIRE_S5.102USRE

  3. So what’s the bottom line….? To register or not when using a vacation home as a short-term rental on occasion . . . .

    1. It looks like the new law doesn’t require rental registration. So you can expect that folks who have conventional (long-term) rentals are now going to start ignoring the registration requirement, too, and file suit when the state tries to enforce it.

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