Question:
About two decades ago, we made the decision to retire and purchased a modest home in Sedona for $188,000. It was conveniently situated near Oak Creek. During the summer, Sedona buzzed with tourists, but the rest of the year, it was a peaceful community. People knew each other well, and even the occasional snowstorm added a certain charm. Now, we’re back in Oklahoma, living with our son and his family. We ended up selling our homes to short-term rental investors for around $1.2 million. While we often reminisce about the Sedona we knew, the current state of the town, filled with short-term rentals, is something we’re glad to be away from. What happened?
Answer:
The short-term rental market really took off in Sedona, essentially starting there. In response to the influx, the city implemented an ordinance to regulate these rentals back in 2008. This was part of a trend seen in other towns too. After the Arizona Court of Appeals confirmed the validity of Sedona’s ordinance in 2012, companies like Airbnb began to push back. Then, in 2016, the Arizona Legislature moved to limit the ability of towns and cities to impose strict regulations on short-term rentals, catching many local governments off guard.
Unfortunately, the rise of short-term rentals has had a negative impact, particularly on Sedona’s sense of community. Take, for instance, an area that used to have 28 upscale homes around a common area. Neighbors would gather for barbecues or birthday celebrations on weekends, while on weekdays, kids would carpool to school events or Little League games. But just two years after the new state law was put into place, 17 of those homes were sold to investors, netting significant profits.
The remaining 11 homeowners reached out to discuss ways to preserve their community. We suggested forming a homeowners’ association (HOA) with rules to prohibit short-term rentals in those 11 homes. Yet, the community had already suffered too much damage. The HOA never came to fruition, and before long, those remaining homes were also sold off to short-term rental investors. What was once a close-knit community has now turned into something resembling a large motel complex.
