Understanding Short Term Rental Laws in Scottsdale
Owning a vacation rental in Scottsdale can be a great investment, but it is important to follow local laws. Short term rental laws in Scottsdale require property owners to obtain a license and meet specific guidelines. These laws help ensure the safety of guests, protect neighborhood quality, and maintain compliance with state and local regulations. However, growing opposition from local residents is pushing for stricter regulations. The “Homes Not Hotels” movement has gained traction as homeowners voice concerns over noise, crime, and the impact of short term rentals on housing availability.
Licensing Requirements for Short Term Rentals
How to Get a Short Term Rental License
All short term rental properties in Scottsdale must have an annual license. This process includes:
- Obtaining a Transaction Privilege Sales Tax (TPT) license from the Arizona Department of Revenue. This license ensures that all rental operators pay the required state taxes on their earnings.
- Applying for a Scottsdale short term rental license. The application requires submitting details such as property address, owner contact information, proof of tax registration, and emergency contact details.
- Notifying neighbors about the rental. Property owners must inform adjacent and nearby properties about their rental and provide emergency contact details.
- Maintaining liability insurance of at least $500,000. This insurance helps protect both owners and guests in case of unexpected incidents.
- Registering the property with Maricopa County. This step ensures compliance with Arizona’s rental property registration requirements and helps local authorities track rental activity.
Without completing these steps, owners cannot legally rent out their properties for short term stays in Scottsdale.
Costs and Renewal
The city charges a $250 annual licensing fee for each rental property. Funds collected from this fee go directly toward enforcement and regulation of short term rentals. Property owners must renew the license annually and update any changes in emergency contact information or property details to remain compliant.
Rules and Restrictions for Short Term Rentals
Occupancy and Use
Scottsdale limits the number of adults in a short term rental to six, plus their dependent children. This rule prevents excessive crowding and helps reduce noise disturbances in residential neighborhoods. Rentals cannot be used for commercial events such as weddings, corporate gatherings, or large parties. Advertising a rental for such purposes can result in fines and penalties from the city.
Noise and Nuisance Laws
Scottsdale has strict noise ordinances in place to preserve the quality of life in residential areas. A nuisance party is defined as an event that creates substantial neighborhood disturbances, including excessive noise, public drunkenness, traffic congestion, and littering. Property owners can be held accountable for repeated violations under Scottsdale’s Nuisance Party and Unlawful Gatherings Ordinance.
In the past year, Scottsdale police have significantly increased enforcement efforts, issuing 738 charges related to short term rental properties—an increase of 30% compared to the previous year. Over Labor Day weekend alone, 21 calls were made regarding loud music and disruptive parties at rental properties, resulting in multiple citations.
Crime and Safety Concerns
Residents have raised concerns about rising crime in neighborhoods with high concentrations of short term rentals. Reports of theft, illegal drug use, and escort services operating out of vacation rentals have led many to push for stricter oversight. Some homeowners say they no longer feel safe, as they do not know who is staying in nearby rental properties.
Emergency Contact Requirements
Each rental must have a designated emergency contact available 24/7. This individual is responsible for responding to complaints and issues raised by neighbors or city authorities. This can be the host or a property manager. Scottsdale maintains an online Short-Term Rental Resource Center where residents can find emergency contact details for rental properties. Owners must ensure this contact information remains up to date.
Pool Barrier Requirements for Short Term Rentals
Ensuring Pool Safety Compliance
Short-term rental properties that have a swimming pool, hot tub, or spa must comply with Scottsdale’s Pool Barrier Requirements to enhance guest safety and prevent drownings. These requirements include:
- A primary 60-inch perimeter fence surrounding the property to prevent public access, such as a backyard block wall.
- Self-closing and self-latching gates with latches at least 54 inches high to prevent unauthorized entry.
- Locked vehicle gates to ensure that all access points remain secure.
- A secondary barrier to restrict access to the pool area, which can be either:
- A separate pool fence with a self-latching gate.
- An alarm system on all doors and windows leading to the pool area, providing an audible alert when opened.
- Hot tubs or spas located outside the pool barrier must have a lockable cover to prevent unsupervised access.
These safety measures are governed by Scottsdale Revised Code §18-175(g), §31-16, and Chapter 31, Article XIII – International Swimming Pool and Spa Code. Property owners must ensure their rental properties meet these standards to maintain compliance and protect guests.
For further information or clarification, property owners can contact Inspection Services at 480-312-2500 or visit Scottsdale’s official website for short-term rental regulations.
How to Stay Compliant
Displaying Required Notices
Property owners must post a short term rental notice inside the home. This notice must be prominently displayed near the front door and any backyard access points. It must include emergency contact details, the short term rental license number, and important safety information such as fire extinguisher locations and waste disposal rules.
Tax Obligations
Scottsdale short term rentals are subject to the Transaction Privilege Sales Tax (TPT) and Transient Tax (commonly referred to as a bed tax). In Fiscal Year 2023/24, short term rentals contributed approximately $15.6 million in tax revenue, which was a 7% increase from the previous year. However, this still falls short of the $43.7 million generated by motels and resorts during the same period.
HOA Considerations for Short Term Rentals
Homeowner Association Rules
While short term rentals are legal in Scottsdale, some homeowner associations (HOAs) have specific rules that prohibit or restrict them. HOAs operate under private agreements that may limit rental durations, require board approval, or completely ban short term rentals. Property owners should review their HOA’s governing documents, including CC&Rs (Covenants, Conditions, and Restrictions), to ensure compliance before listing their property.
Navigating HOA Restrictions
If an HOA has restrictions against short term rentals, owners may face fines or legal action for violating community rules. Some HOAs require properties to be rented for a minimum of 30 days to prevent transient guest turnover. Before investing in a short term rental, it is advisable to check HOA policies and speak with the association board to clarify any uncertainties.
How HOAs Enforce Rules
HOAs have the authority to enforce restrictions through fines, legal notices, or revoking community privileges. Neighbors within HOA communities may also report violations, leading to increased scrutiny. It is important to respect these rules to maintain good relationships with the HOA and community members.
The Future of Short Term Rentals in Scottsdale
Declining Short Term Rental Stays
Data shows that short term rental stays in Scottsdale have dropped by 5.7% over the past year, from 274,300 stays in FY 2022/23 to 258,700 in FY 2023/24. Additionally, the number of licensed short term rental properties decreased by 20%, from 3,852 in June 2023 to 3,060 in June 2024. While demand has slightly declined, short term rentals still play a role in Scottsdale’s tourism economy.
Push for Stricter Regulations
Many residents, backed by the “Homes Not Hotels” movement, are advocating for local control over short term rental regulations. They are pressuring legislators to return zoning authority to Scottsdale, allowing the city to enforce stricter occupancy limits and property use restrictions. Currently, state law prevents Scottsdale from banning short term rentals outright, but city officials continue to lobby for more regulatory power.
Ensuring Compliance and Success
Understanding short term rental laws in Scottsdale is essential for operating a legal and profitable vacation rental. While the city enforces licensing requirements and noise regulations, homeowners must also navigate local opposition and changing market trends. Staying informed about new policies, maintaining compliance, and fostering positive relationships with neighbors can help rental owners succeed in Scottsdale’s evolving short term rental landscape.