AG Brnovich Weighs In On PV STR Rules: The Good and the Bad

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The issue of short-term rentals (STRs) is not a new topic here at the Arizona Progress Gazette, and regular readers will note that Paradise Valley’s rules to make business more difficult for STR operators had received a request for investigation from Sen. Warren Peterson (himself the owner of a STR property), which elicited a formal statement from the PV Town Attorney.

Well the official word from the AG Brnovich’s office is in, and…it’s a mixed bag.

The good? In the AG’s opinion, most of the rules implemented by PV do NOT violate state law. Demanding evidence of registration with the Assessor and of a privilege tax license are compliant, as are liability insurance and landline requirements. The STR industry will have less of a laissez-faire ethos going forward, hopefully dissuading new potential entrants.

The bad, at least from the perspective of the average resident of the town? A number of the more extensive requirements that were to be asked of STR operators will be considered in violation of the law if they exceed regulations currently in state law. The more onerous regulations, such as a requirement for the owner to meet with potential renters first and to verbally disclose rules and regulations to the renters, would clearly be in violation, as would some of the less onerous regulations.

The town will need to retract or amend the regulations in a timely manner, and if it doesn’t the Attorney General will refer the case to the State Treasurer, who would then be required to withhold shared tax revenue, obviously an outcome that is not worth sticking to their proverbial guns. What started as regulations that would likely cut the legs out of the STR industry in Paradise Valley turned into mild nuisances with higher costs to operate.

And while we are not attorneys nor legal experts, this seems like a reasonable judgment by the AG’s office, even if it dampens the impact of an ordinance that most residents would likely have desired. While requiring STR operators to meet in person with their renters would have likely had the preferred impact of hurting the industry, it is certainly far above and beyond what nearly every AirBnber or VRBOer has personally encountered. We can’t reasonably expect town ordinances to outrank state law. It was a home run swing that turned into a blooper single.

So while we hoped that the Attorney General would have sided with Paradise Valley and canceled out the concerns of the obviously conflicted AZ Senator, we must acknowledge that it seems like a reasonable judgment. We can still hope that the incremental improvement in regulation will improve the more detrimental aspects that STRs can introduce into neighborhoods, even though it won’t end them.