A new law in Arizona would protect Airbnb and similar sites

In enacted, the law would require sites that host short-term rentals to collect taxes from hosts.

Yuya Shino/Reuters/File
A man walks past a logo of Airbnb after a news conference in Tokyo, Japan

While some cities continue to battle personal lodging rental service Airbnb, the company's business seems to be safe in Arizona, after the state Senate overwhelmingly passed a bill that prevents cities, town, and counties from banning short term rentals.

Citing increased income opportunities and affordable accommodations, legislators approved the bill, SB 1350, dismissing a warning of an official from Yavapai County saying that nearly 1,000 people were illegally renting out their homes. A report by Airbnb revealed that 5,000 Arizonans hosted 131,000 guests in the past year, earning each individual roughly $4,000 between January 2015 to January 2016.

But the bill would mean changes for Airbnb hosts in the state. If enacted, it would allow towns and counties to impose "narrow" regulations on such properties and to collect taxes on these rentals, according to the Institute for Justice.

Arizona Gov. Doug Ducey has been on the forefront of championing the so called “sharing economy,” saying his state needs to “modernize.”

"Arizona should be to the sharing economy what Texas is to oil and what Silicon Valley used to be to the tech industry,'' said Ducey in his State of the State address, according to Forbes.

Yet not everyone is on board. State Sen. John Kavanagh (R) of Fountain Hills, the only member who opposed the bill, is against short-term rentals.

"I didn't move into a neighborhood to have the house next door to me turned into a weekly rental property,'' he said, adding that he isn’t opposed to long-term rentals.

“We had a problem in Fountain Hills where people were renting houses and they were allowing individuals through services like this to rent them for the weekend when there are big golf or other events in town,” Kavanagh said, according to Arizona Capital Times. “And a whole bunch of people come and they party at the house, they arrive on Friday and they leave on Sunday.”

Though many places have formally legalized services like Airbnb – from San Fransisco, to New Jersey to Philadelphia – in exchange for tax revenues, a significant number of city officials generally hold a skeptical view towards the company and its competitors, often blaming them for exacerbating the shortage of housing, especially in large cities such as New York and San Francisco.  

“Short-term rentals are really taking over a significant portion of the rental housing market in our community,” said Steve Clare, executive director of Venice Community Housing, an organization based in Los Angeles, according to the Los Angeles Times. "It's going to further escalate rents, and take affordable housing out of Venice."

“We have the worst housing crunch this city has suffered since the 1906 earthquake – we cannot build housing fast enough,” said Dale A. Carlson, a media consultant in San Francisco who wrote a measure designed to limit the short-term rental homes to 75 night per year.

Others want the short-rentals to have similar regulations to hotels, citing claims that renters aren’t following the law. In New York where it is unlawful to rent an apartment for less than 30 days, officials have accused renters of violating these laws.

The Los Angeles Times reported on a study that surveyed 12 major cities across the country, including San Diego and San Francisco. The study found that a significant portion of Airbnb's revenue comes from properties rented out year-round. And nearly one in five Airbnb landlords in large cities rent out multiple properties.

“When you have a limited supply of apartments, and unlimited demand for those apartments, turning some apartments into hotels makes the remaining ones even more expensive," wrote Nicole Gelinas, a contributing editor to the Manhattan Institute’s City Journal, in a New York Times op-ed. “Sure, the city should build more apartments. But absent effective law enforcement, there’s no guarantee that Airbnb users won’t turn those into hotel rooms, too.

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