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.