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A lawsuit filed by the Goldwater Institute against the City of Sedona, its mayor and city manager for refusing to give a short-term rental permit to the owner of a mobile home park was dismissed.
At the center of the dispute was a 2016 law that barred cities and municipalities from banning short-term rentals. Groups like Airbnb and Vrbo have taken heat from locals and lawmakers since the 2016 law’s passage as the state’s affordable housing stockpile has rapidly decreased.
Sedona has seen major impacts from the short-term rental industry, with effects felt sharply by the service industry workers employed by the hospitality industry that dominates the local economy. The resulting lack of housing for those workers led city leaders to embrace controversial ideas such as allowing a space for people to sleep in their cars in the city legally.
The city contested that the mobile home park was not eligible for a short-term rental permit, as the 2016 law restricts the city from permitting short-term rentals in single-family homes, not mobile home parks, which are not mentioned in the law.
The law that prohibits municipalities from enacting regulations on short-term rentals except in specific circumstances was touted by Gov. Doug Ducey and other lawmakers at the time as boosting the short-term rental market, though Ducey has said since that lawmakers should “revisit” the regulations after a string of complaints from cities and towns that found themselves with no way to go after bad actors.
The bill was model legislation from the American Legislative Exchange Council, an organization that connects corporations with state legislators — almost exclusively Republicans — so they can craft pro-industry legislation. In many instances, the result is legislation that is simultaneously pushed in statehouses across the country.
That was the case with the 2016 short-term rental regulation law, which shares almost identical language with bills being pushed in other areas that year.
ALEC has a strong presence in Arizona, with many GOP members of both the House and Senate Republican caucus having ties to the group.
A number of short-term rental-related bills have been introduced at the legislature this session, but it is unclear if they will have a path to becoming law, as they will face stiff opposition from Republican leadership who have previously said they would block regulations and own short-term rentals themselves.
The Goldwater Institute intends to appeal the ruling by Yavapai County Superior Judge Linda Wallace.
The city of Sedona did not respond to a request for comment for this story.
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