Arizona Mayors Call for Short-Term Rental Conversation as Housing Affordability Crisis Deepens

Rural Arizona Mayors Demand State Action on Short-Term Rental Impact

Across rural Arizona, tourism communities are facing a housing crisis as investors purchase entire neighborhoods and convert homes into short-term rentals. Ten mayors from Arizona communities have signed a letter calling on state leaders to continue the conversation about short-term rental regulation and housing availability.

The letter, co-authored by Holli Ploog, Mayor of the City of Sedona, and Cathey Rusing, Mayor of Prescott, was signed by mayors from Clarkdale, Chino Valley, Flagstaff, Lake Havasu City, Williams, Jerome, Cottonwood, Bisbee, and Jerome.

Across rural Arizona, tourism is our lifeblood. Visitors fuel small businesses, sustain restaurants, and support the tax base that keeps our communities thriving, according to the letter.

The mayors acknowledged that Representative Selina Bliss brought stakeholders, including Airbnb, to the table to begin a conversation about short-term rental challenges. HB 2429 did not ultimately advance, but the effort created space for dialogue and demonstrated that progress is possible when people engage in good faith.

The original intent behind Arizona's short-term rental laws was designed to help homeowners earn supplemental income. For retirees on fixed incomes, renting an extra room provided financial flexibility and security. The goal was to empower residents, not incentivize the bulk acquisition of single-family homes by corporations or investors.

In many communities today, the reality looks very different, according to the letter. Entire streets are increasingly owned not by local families but by remote investors whose primary connection to our towns is financial.

As owner-occupied homes shift to investor-controlled properties, long-term housing availability shrinks and prices rise in already limited markets. Many residents describe this shift as neighborless neighbors. Homes are occupied but not lived in. There is activity but no continuity. Over time, the sense of community that defines these towns begins to fade.

The mayors pointed out a critical paradox. Police officers cannot afford to live where they patrol. Teachers commute long distances. Hospitality workers, the backbone of the tourism industry, are priced out of the communities they serve. A healthy economy requires residents who can plant roots, volunteer in schools, join civic organizations, and invest in their neighborhoods.

This issue is not about banning short-term rentals. It is about restoring balance and local empowerment, according to the letter.

The letter emphasized that rural communities vary widely in size, infrastructure capacity, and housing supply. Local leaders are best positioned to understand how many short-term rentals their housing markets can sustain without displacing essential workers or weakening neighborhood stability.

The mayors noted that Representative Bliss's efforts showed collaboration is possible. That progress should not stop here. The conversation she started must continue, with a broader focus on both safety and housing availability.

The letter concluded with a call to action. Rural Arizona is ready to be part of the solution. The mayors asked state leaders to continue this conversation and work with local communities to ensure growth does not come at the expense of the people who call these places home.

The cost of delay will not be measured in policy debates, but in the continued loss of housing, neighbors, and the stability our communities depend on, according to the letter.

Governor's Fee Proposal Adds to Debate

Governor Katie Hobbs has proposed a $3.50 nightly fee on short-term rentals to fund the Arizona Affordability Fund. The initiative, announced during her State of the State address on January 12, would help working-class families pay utility bills, weatherize homes to lower energy costs, and build more affordable housing.

The governor introduced the plan with an initial $20 million investment but is seeking a long-term funding source. She characterized the fee as a modest ask for tourists to support the state's workforce.

By asking vacationers to kick in $3.50, less than a cup of coffee, we can deliver major change for the working people in our state who are struggling to get by, the governor said during her State of the State address.

The proposal has ignited debate between housing advocates and rental hosts. Christopher Groesbeck with the Tempe Coalition for Affordable Housing celebrated the initiative as a promise that the state is not just here for a year but for the long term.

Rental hosts expressed concern about why the fee singles out their industry. John Hildebrand, a rental host and board member of Arizonans for Responsible Tourism, noted that short-term rentals already pay state and local taxes, including bed and transient occupancy taxes.

To go ahead and tax short-term rentals another $3.50 on top of already being very taxed just seems like we're getting attacked, Hildebrand said. It is weird that they would only single out short-term rentals for a tax like this when they're not going after the hotels.

Airbnb released a statement saying the proposal is a new tax on over 1.2 million Arizonans who stayed in a short-term rental in Arizona last year. Airbnb Policy Lead Lauren Bouton said the proposal will make travel more expensive and hurt everyday Arizonans who use hosting as a way to support their families.

The proposal also grants an unfair advantage to corporate hotel execs on the backs of everyday Arizona hosts, according to Airbnb. At best, this proposal is misguided and at its worst, it would hurt Arizona families' pocketbooks.

The start of the regular legislative session marks the beginning of formal discussions on the measure, which will determine whether the governor's affordability fund proposal becomes law.