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Homeowner’s associations have more tools to deal with short-term rentals

Homeowner’s associations that have approved sets of conditions, convenants and restrictions — commonly called CC&Rs — have the ability to not necessarily prevent owners from renting out all or part of properties overnight or for short periods, but to at least mitigate the consequences of misuse of rental property. VVN/Vyto Starinskas

Homeowner’s associations that have approved sets of conditions, convenants and restrictions — commonly called CC&Rs — have the ability to not necessarily prevent owners from renting out all or part of properties overnight or for short periods, but to at least mitigate the consequences of misuse of rental property. VVN/Vyto Starinskas

Homeowner’s associations — and the residents who live in neighborhoods that have them — enjoy some unique protections from a state law enacted in 2016 that protect the vacation rental home industry from local government intrusion.

However, homeowner’s associations and property owner’s associations still have to deal with the massive spike in popularity of short-term rentals over the past 10 years; they just have a few more tools to work with.

Senate Bill 1350, passed with bipartisan support and signed into law by Gov. Doug Ducey in 2016, prevents local Arizona governments from creating or enforcing laws or restrictions that specifically address short-term rentals. Cities and counties are left to rely on traditional business, dwelling and building codes and statutes.

Homeowner’s associations that have approved sets of conditions, convenants and restrictions — commonly called CC&Rs — have the ability to not necessarily prevent owners from renting out all or part of properties overnight or for short periods, but to at least mitigate the consequences of misuse of rental property.

In fact, even associations that don’t have CC&Rs, or don’t invoke them often, still have more capability to deal with issues that might come up with rentals.

The Verde Village Property Owners Association established CC&Rs years ago, but as its eight units of residences now have a total of more than 13,000 residents, the CC&Rs are no longer enforced, according to the VVPOA website.

VVPOA Board member Peggy Barksdale said short-term rentals have not created any major issues in Verde Village, to her knowledge.

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"Even though we haven’t had issues within our properties, the transient nature of the population affects all of Sedona." Gwen Hanna, president of VOCA

“I think that’s on the back burner,” Barksdale said. “I guess we could get together and discuss issues, if we were having those. But most of the issues caused by short-term rentals in other places, like loud, huge parties or tons of traffic and visitors, haven’t been issues in the village.”

Barksdale said the building modifications some owners are making in order to host short-term renters, such as what seems to be happening on a large scale in Sedona, are permitted through Yavapai County, so the VVPOA might not even be aware of such remodeling.

“It’s certainly not something being done often,” Barksdale said.

The VVPOA charges dues of $40 per month. One of its main annual events is a quarterly community cleanup along major streets in the village area, such as State Road 260.

A search done Friday on one of the most popular short-term rental websites, airbnb.com, turned up about 18 units for rent in Verde Village, including four on East Del Rio Drive alone. However, Cottonwood and Camp Verde are in much different short-term rental situations from Sedona, and, to a lesser extent, the Village of Oak Creek, due in part to the massive reach of the Village of Oakcreek Association.

According to AirDNA MarketMinder, a site that tracks services like AirBnB and HomeAway, Sedona is in a much more unique situation than most municipalities when it comes to tourism.

The site lists total rentals for the past 13 completed quarters, ending with the second quarter of 2019, which finished June 30. Cottonwood’s rentals have tripled in that time, going from 48 units available in the second quarter of 2016 to 148 in 2019.

Camp Verde went from only 12 rentals listed in 2016 to only 59 in the first quarter of 2019, and there were only 50 posted in this year’s second quarter.

Sedona, on the other hand, was already at 399 active rentals in the second quarter of 2016, and had 2,591 active rentals on the two major sites, AirBnb and HomeAway, as of June 30.

That’s a growth rate of more than 600 percent over three years. Short-term rentals aren’t going away anytime soon, no matter what regulations are in place.

Gwen Hanna, president of the VOCA, said being along the south edge of Sedona, essentially still amid the beauty of the red rocks that make the area a destination location, make it tough to keep the “flavor of Sedona.”

She said while timeshares have certainly had an impact on Sedona’s number of visitors, short-term rentals have an effect on the sense of community.

VOCA began discussing a rental amendment in 2016, almost at the same time SB 1350 was being debated in the state legislature, and passed it on Nov. 10 of that year, amending its governing documents to prohibit rentals for time spans shorter than 30 days.

VOCA has full jurisdiction over many types of regulations for its 2,344 members and 45 percent of all the residences in the Village of Oak Creek, commercial structures, a golf course and a hotel.

“Not everyone was in favor of the change at that time; some owners were upset,” Hanna said. “But the majority felt it would be best to keep a sense of community by having only residents and their guests here.”

While VOCA doesn’t “police” residents to see if there seem to be overnight rentals, nor does the board wish to start doing so, there doesn’t seem to be the types of complaints in association neighborhoods similar to what the City of Sedona faces. Sedona’s issues include trash and parking issues, noise, trespassing, fire pit and barbecue concerns and questionable modifications to structures in order to capitalize on short-term rental income.

Hanna said she thinks SB 1350 has had unintended consequences.

“Even though we haven’t had issues within our properties, the transient nature of the population affects all of Sedona,” Hanna said. “We know Branson (Mo.) has exploded in a similar way, and we want to preserve the things that make us want to live here in the first place.”

Hanna said there would be no way to know what’s happening with each unit, even if the board wanted to enforce the rule. She said if there are rentals in association properties, it’s happening relatively quietly, as VOCA isn’t receiving the large scale of complaints Sedona is fielding.

Friday’s search of airbnb.com showed more than 300 units available for rent in the Village of Oak Creek and another 300-plus within Sedona “proper,” including West Sedona. Hotels and other establishments list rentals on airbnb, as well as individuals.

Verde Santa Fe, a planned community near Cottonwood, has a similar 30-day rule in a draft of revised CC&Rs on its website, vsfneighbors.com. Board President Joe Steiner, after consulting with the rest of the board, said VSF has no comment for this story, saying only “This is a private situation.”

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